Blog Description http://everythingshale.com Wed, 11 January 2017 13:53:11 Wed, 11 January 2017 13:53:11 http://everythingshale.com/news/2017/january/11/drillers-could-double-project-investment-decisions-in-2017-wood-mac-says/ Energy research firm Wood Mackenzie believes drillers will double the number of final investment decisions this year compared to last year, meaning the industry may pull the trigger on 20 large multiyear projects in 2017. That's still only half the annual average number of large projects launched each year from 2010 to 2014, when the industry began a string of expensive so-called mega-projects. But this year, oil companies will likely focus on smaller, more efficient projects close to existing infrastructure, said Julie Wilson, a Wood Mackenzie researcher in Houston. After the collapse of oil prices, companies scrambled to curb costs and reduce the time it takes to drill deep oil and gas wells. Drillers could spend $7 per barrel in capital expenditures this year on these smaller projects this year, compared to $17 a barrel before the bust, pushing rates of return up from 9 percent to 16 percent over the same period, Wood Mackenzie estimates. Though companies may sign off on some deep-water projects in the Gulf of Mexico, Guyana and Brazil this year, half of these 40 large projects aren't profitable enough to launch even at $60 a barrel oil. There are still a lot of deep water projects that struggle to make the 15 percent hurdle rate,†in terms of rates of return, Wilson said. There's still a lot of work to be done on those.†These projects often face strict local content rules in places like Brazil and Nigeria requiring them to use locally supplied labor and materials. Still, as oil prices rise, drillers could face investor pressure to begin planning how they'll churn out oil in the future, after a two-year bust that whittled away at oil production rates and reserves. You've got to keep investing just to stand still,†said Jamie Webster, a fellow at the Center on Global Energy Policy at Columbia University. The constraint is how good they feel about the market, and do they feel ready to pull the trigger.†In the U.S. shale patch, Wood Mackenzie expects producers to increase spending 23 percent to $61 billion this year, the first annual spending increase since crude crashed in 2014. That could bring another 240 land drilling rigs to the market and lift oil production by half a million barrels a day by the end of the year, compared to the end of last year. A lot of the action is expected to take place in West Texas' Permian Basin, where companies spent $20 billion in a merger and acquisition land grab last year. Shale drillers have become more efficient since the oil bust began, reducing break even prices for oil fields by 25 percent from $65 a barrel to $49 a barrel, on average. Even though cost inflation looms, there's still running room for more efficiencies,†said Jeanie Harrison, an analyst at Wood Mackenzie. In the Wolfcamp Shale in West Texas, for example, the firm believes drilling could speed up another 20 to 30 percent, she said. http://everythingshale.com/news/2017/january/11/drillers-could-double-project-investment-decisions-in-2017-wood-mac-says/ http://everythingshale.com/news/2017/january/11/drillers-could-double-project-investment-decisions-in-2017-wood-mac-says/ Wed, 11 January 2017 13:53:11 http://everythingshale.com/news/2017/january/11/can-mexican-reform-boost-the-price-of-natural-gas/ The commission is trying to buy gas in bulk, then build the pipelines through Texas to get it to Mexico, and Irvin's been cutting the deals. Two pipelines are already on their way: Dallas-based Energy Transfer Partners is building a 42-inch diameter pipeline that stretches 148 miles from West Texas' Permian Basin to the Rio Grande, and should pipe 1.4 billion cubic feet of gas per day to Mexico. RELATED: Tear down that wall And Houston’s Spectra Energy is part of a joint venture to build a $3.6 billion pipeline system from Corpus Christi to the border at Brownsville, and underwater in the Gulf of Mexico through to the Mexican port city of Tuxpan. It is expected to transport up to 2.6 billion cubic feet of natural gas a day. The goal is to build enough pipe to send 8 to 10 billion cubic feet per day, Irvin said. Mexico has historically used fuel oil to make electricity. Natural gas is cheaper, cleaner and more reliable, Irvin said. Mexico is very interested in doing business,†Irvin said. And such demand may help boost the price of natural gas. Despite the campaign threats, Irvin just can't imagine President-elect Donald Trump would willingly disrupt that relationship. There are far too many positives associated with this for the new administration to interfere with it,†Irvin said. http://everythingshale.com/news/2017/january/11/can-mexican-reform-boost-the-price-of-natural-gas/ http://everythingshale.com/news/2017/january/11/can-mexican-reform-boost-the-price-of-natural-gas/ Wed, 11 January 2017 12:10:40 http://everythingshale.com/news/2017/january/11/will-the-steel-market-bears-bite-back-in-2017/ Consensus forecasts suggest iron ore delivered into China will average around $55-$60/dry mt this year, following the surprise upside seen in 2016 when prices finished up over 80% and averaged at $58.45/dmt CFR. Last year prices were bolstered by higher than anticipated Chinese demand and lower than expected supply growth from majors, as well as buoyant sentiment from firm steel and iron ore futures trade at various times in the year. The cost-push from coking coal also filtered into iron ore, particularly higher grades, as mills looked to maximize direct charge material and reduce sintering/coke usage. Higher input costs translated into firmer steel prices, which perpetuated raw materials strength. As a result some see iron ore prices rising further in 2017. The Metallurgical Mines Association (MMAC) of China forecast average seaborne prices will move above $60/dmt CFR on marginally better demand and relatively stable production – domestic concentrate supply will fall around 10 million mt, according to MMAC. Citigroup forecast an average iron ore price of $56/mt CFR in 2017 and $48/mt next year, while Morgan Stanley forecast $58/mt CFR both this year and next. Goldman Sachs sees iron ore prices above $60/mt CFR in the first half of 2017, before falling to $55/mt by the end of the year. This year Chinese steel output could come under pressure as ongoing trade measures further close the export valve amid a continued contraction in domestic consumption.  While exports moderated last year, this was primarily on square bar as mills in Turkey and elsewhere opted to use scrap, with electric arc furnace-based production much more competitive than the integrated route. With Southeast Asia now looking to reduce Chinese imports, following actions in the US, Europe and elsewhere, exports could fall across the board. The stronger dollar could also impact emerging market demand and Chinese exports, although it may just make Chinese steel cheaper in dollar-denominated terms depending on the yuan’s performance. Nevertheless, China’s exports are only 10% of its output, so it is fair to say production and capacity will be more determined by domestic demand and consumption than external trade barriers. On the domestic demand-front, many in China suggest they are seeing a pipeline of infrastructure investment pretty much unchanged from last year. However, the property picture does not look so rosy, with a number of local governments recently moving to constrain price growth and restricting funds to developers, which could mean lower sales growth/steel demand by the end of H1. Beijing’s sharper environmental focus – if it continues – could also constrain steelmaking. At present, the government appears to be targeting induction furnaces, with media reports suggesting it is setting their complete elimination as the cornerstone of its structural reforms. S&P Global Platts is forecasting no change to Chinese steel production this year, with it remaining around 813 million mt, and a decline of around 1% in domestic demand. Any fall in blast furnace-based steel output could weaken coal and ore buying, hitting prices at a time of rising supply; given the recent bull-run mining minnows in Australia and elsewhere are looking to restart/increase production, while more ore from Roy Hill is likely to come to market. BHP and Vale’s Samarco mine could restart this year, while Vale will bring on additional supply from its S11D mine in northern Brazil. S11D will have a nominal capacity of 75 million mt/year and be at the lower end of the cost-curve, with C1 cash costs below $10/mt. Coking coal prices are likely to continue trending lower, and have already shed over $100/mt from the $310/mt FOB Australia peak seen in November. Receding raw materials will likely see Chinese mill margins contract – since the global financial crisis of 2008 higher costs have been the main source of steel price strength – and export offers fall into markets still open to Chinese product. The post Will the steel market bears bite back in 2017? appeared first on The Barrel Blog . http://everythingshale.com/news/2017/january/11/will-the-steel-market-bears-bite-back-in-2017/ http://everythingshale.com/news/2017/january/11/will-the-steel-market-bears-bite-back-in-2017/ Wed, 11 January 2017 09:52:46 http://everythingshale.com/news/2017/january/10/five-things-to-know-about-exxonknew-fakenews-ahead-of-tillerson-s-confirmation-hearing/ Activists have built their entire #ExxonKnew campaign on manufactured claims that have been repeatedly debunked. Now with the confirmation of former Exxon President and CEO Rex Tillerson set for tomorrow, even Bloomberg Government said in a post today that “ #ExxonKnew has quietly faded .” “Look for climate change to come up in Tillerson’s hearing, but not #ExxonKnew. Instead, Democrats will be asking how he squares his moderate views with Trump and the rest of Trump’s advisers. The question is likely to be: What does Exxon know that Donald Trump doesn’t?” So without the facts on their side, and grappling with being essentially ignored, ExxonKnew activists have resorted to what they know best: generating fake news. Here are the top five things to know regarding the latest bogus claims they’ve been pushing ahead of the hearing. #1. Activists rehash #FakeNews story claiming Exxon funds “denier” groups; meanwhile Senate Democrats got $9 million from the #ExxonKnew campaign NextGen Climate, the group spearheaded by billionaire #ExxonKnew activist Tom Steyer, had a story placed in the Huffington Post this week that rehashes the tired claim that ExxonMobil has given $6.5 million to “climate denier groups.” First, these groups included in NextGen’s list of “deniers” are the same groups targeted by the U.S. Virgin Island Attorney General’s subpoena, which was retracted last year. They are also the same groups featured in a report  released last year by the Rockefeller-funded Yale School of Forestry and Environmental Studies, which bizarrely accused a number of organizations that support policies to reduce emissions (including a carbon tax) of being science deniers. For more on that, click here . Meanwhile, Daily Caller reported today that NextGen and other groups in the #ExxonKnew campaign have funded Democrats on the Foreign Relations Committee (which will be holding the Tillerson hearing) to the tune of over $9 million:  “The League of Conservation Voters (LCV), NextGen Climate Action (NextGen) and Environment America (EA) gave more than $9.3 million — in the form of individual campaign donations and independent expenditures — to eight of the nine Democratic lawmakers on the committee. In total, LCV, NextGen and EA gave eight of the nine foreign relations committee Democrats $9,341,329 through individual donations and super PACs, according to a Daily Caller News Foundation examination of  campaign finance data  compiled by the Center for Responsive Politics.” […] Here is a breakdown of how much support each Democratic foreign relations committee member got from EA, LCV and NextGen: NH Sen. Jeanne Shaheen — $4.3 million VA Sen. Tim Kaine — $2.2 million MA Sen. Ed Markey — $2.2 million CT Sen. Chris Murphy — $511,369 NM Tom Udall — $77,470 DE Sen. Chris Coons — $8,950 NJ Sen. Bob Menendez — $2,000 MD Sen. Ben Cardin — $1,000 #2. #ExxonKnew spends big money on ad that doesn’t mention climate – even though activists claim climate is the reason they are fighting Tillerson Curiously, the ad against Rex Tillerson that was launched this week by NextGen Climate is missing a pretty big component: climate. Not once is climate mentioned, even though the entire campaign hinges on their claim that Exxon somehow knew about climate change before the world’s top scientists had come to any conclusions. If their claims were real news, wouldn’t you think they’d want to tout them instead of pushing other totally unrelated issues? Or maybe they’re doing it because no one believes their climate claims, anyway. New Mexico Senator Tom Udall (D) said Tillerson’s climate stance is a “ bright spot ”: “I certainly have some significant disagreements with Mr. Tillerson’s recent corporate record, from the appropriate response to Russian aggression on the world stage to the importance of investment in cleaner forms of energy,” Udall said. “However, I appreciated the time and attention he devoted to answering my questions.  In particular, I was pleased to learn more about his position on climate change policy.  I’m encouraged that, contrary to the extreme statements by President-elect Trump,  Mr. Tillerson believes in science  and sees value in the United States remaining as a party to the Paris Agreement.  I also appreciate that, in the past, he has advocated for solutions to reduce carbon emissions rather than denying the existence of climate change.”  (emphasis added) Senator Cory Booker (D-N.J.) echoed this statement. As  CBS News reported , Still, he [Booker] added that he was encouraged by the nominee’s comments on climate change and said he hoped to hear more from him on that publicly. “ Climate change is real, and the science of climate change is real,” he said. “It—it was nice to hear him address that, and I think he should address that in a public forum .” (emphasis added) Meanwhile, the Chairman of the Foreign Relations Committee, Bob Corker (R-Tenn.),  rightly said , “I think Democrats are sitting down with him and realizing that  this guy is a scientist, an engineer that believes in science , and so on some of the issues that you know they care about, I think  the answers they’re getting are much different than they thought ,” Corker said. (emphasis added) Even Steve Coll of the Columbia School of Journalism, which manufactured the original #ExxonKnew narrative, has noted that Tillerson was responsible for moving Exxon forward on climate issues. As Coll said in an  NPR interview , “[Tilllerson] started talking about climate in a different way. Yes, the risks are there. They’re serious. We should take them seriously.” #3. #ExxonKnew claims on Russia and sanctions debunked What the NextGen ad does focus all its time on is the claim that Tillerson has a close relationship with Russia and opposed sanctions on the country. From NextGen’s press release accompanying the ad, “Tillerson, the former CEO of Exxon Mobil, maintained a self-described “ very close relationship ” with Vladimir Putin, receiving Russia’s Order of Friendship award in 2013. He later  opposed  American sanctions on Russia that have jeopardized Exxon’s deal with Russian-state oil company Rosneft, estimated to be worth as much as $500 billion. Tillerson also  oversaw  a lobbying effort to make the sanctions easier to be removed.” What Tillerson and Exxon oppose are sanctions that aren’t applied in a uniform manner – especially ones that would put the United States at a disadvantage relative to policies put in place by the European Union. The 2014 EU sanctions against Russia contained a provision that allowed previous agreements between European companies and Russia to remain in place, while U.S. sanctions required canceling previous agreements. So even though the assumption was that the sanctions would be applied across the board, what ended up happening was American companies lost economic opportunities, while EU, South American, and Asian companies just continued business as usual. This, in turn,  meant that Russia was spared any real pain from the American-imposed sanctions . That’s why leaders from Vice President  Joe Biden  to Secretary of Defense  Chuck Hagel  to  President Obama himself  have said that multilateral sanctions – not unilateral ones – are typically the better way to go. As for the Order of Friendship award, let’s take a quick look at some of the other folks who have received this honorific over the years, including a few who will be quite familiar to environmental activists. Let’s start with Ban Ki-Moon, Secretary-General of the United Nations (the body that runs the Intergovernmental Panel on Climate Change) who is perhaps the  most notable recipient  of the award. As the UN leader, Ban Ki-Moon has been  spearheading  international climate efforts since the 2010 climate conference in Cancun. He most recently  headed up  the UN Climate Summit in New York, ahead of 2015 Paris climate change conference. Then there’s  Jean Chretien , the former Prime Minister of Canada,  who ratified the Kyoto Protocol . There’s also the former Archbishop of Canterbury  Rowan Williams , who has  forcefully lobbied  in favor of international climate treaties and  wrote a 2014 op-ed titled  “The rich West is ruining our planet.” #4. Activists push #FakeNews claiming Exxon does all kinds of business in Iran even though it has no operations there This week  USA Today  produced a story claiming ExxonMobil previously did all sorts of business in Iran. The piece was pitched to  USA Today  (only after literally every other reporter in New York and Washington passed on it) by a group called American Bridge, which is aligned with anti-energy activists. But if USA Today was your only source of information on the issue you wouldn’t know that the company has no operations in Iran, or that once Exxon actually explained in detail all of this to the SEC when the agency asked about it back in the mid-2000s, the matter was essentially closed, with the SEC taking no further action (you can read the correspondence between Exxon and the SEC yourself online,  here ,  here ,  here  and  here ). The bottom line is that if Exxon was actually doing something wrong, or the SEC had additional concerns or questions, the inquiry would have been extended, but it was not. #5. Activists’ claim that Exxon “won” the 2016 election is a concession that they’ve lost The Center for American Progress released a report this morning called “How Exxon Won the 2016 Election,” which makes a number of #FakeNews claims, including this one: “As the head of DOJ, Sen. Jeff Sessions would have the power to sweep [federal Department of Justice Exxon] investigations under the rug.” The only problem? There never was an investigation from the U.S. Attorney General’s office, and for good reason. After California Reps. Ted Lieu (D) and Mark DeSaulnier (D) asked Attorney General Loretta Lynch to open an investigation of ExxonMobil, the Department of Justice  punted the request  to the FBI in March 2016 to determine if there was enough evidence to even warrant an investigation. There has been no movement on that ever since. But the bigger point here is that by claiming Exxon “won” the election, they’re conceding that – after years of working to “to establish in public’s mind that Exxon is a corrupt institution,” “delegitimize them as a political actor,” and “force officials to disassociate themselves from Exxon” – they’ve lost. http://everythingshale.com/news/2017/january/10/five-things-to-know-about-exxonknew-fakenews-ahead-of-tillerson-s-confirmation-hearing/ http://everythingshale.com/news/2017/january/10/five-things-to-know-about-exxonknew-fakenews-ahead-of-tillerson-s-confirmation-hearing/ Tue, 10 January 2017 23:42:40 http://everythingshale.com/news/2017/january/10/non-opec-producers-say-they-are-trimming-output/ Russia's oil production has shrunk by around 130,000 barrels a day in the first week of January from a post-Soviet record of 11.25 million barrels a day in October, an official at the energy ministry's CDU-TEK unit said Monday, asking not to be identified because of internal policy. The cuts from the world's biggest energy producer go beyond its initial goal for a cut of at least 50,000 barrels a day this month. The Russian side is fulfilling all articles of the agreement and all the obligations it took,†Kremlin spokesman Dmitry Peskov told reporters on a conference call Tuesday. Russia and 10 other non-OPEC nations joined forces with the Organization of Petroleum Exporting Countries on Dec. 10 to end a global glut that's crashed oil prices and shaken energy-rich economies. The pact — the first between the two sides in 15 years — involves a reduction of 558,000 barrels a day from non-OPEC countries starting in January. Kazakhstan's energy ministry said it has met its Vienna commitment of curbing production by 20,000 barrels a day in January. That reduction came after October's start-up of the country's $50 billion Kashagan oil field, which is set to increase production from 140,000 barrels a day in the first half of this year to 180,000 barrels in the second half, Energy Minister Kanat Bozumbayev said last month. The combined 150,000 barrels a day cut represents 27 percent of the promised reduction by non-OPEC countries. If the cuts get confirmed, this is definitely positive, as compliance improves,†Giovanni Staunovo, an analyst at UBS Group AG said by e-mail. We should soon see inventory draws materializing.†Here are the other reduction announcements that have come out in the past month: Oman: the non-OPEC Gulf country said on Jan. 3 its output was being cut by 45,000 barrels a day to 970,000 this month. Azerbaijan said on Tuesday that it plans to cut output by 35,000 barrels a day as early as this month to comply with the Vienna deal. Malaysian state oil co. will make necessary adjustment†to the country's crude output level in line with agreement reached between OPEC and non-OPEC producers, Petronas said last month. South Sudan is in the process of resuming crude production in Unity State, which will boost the country's output by at least 50,000 barrels a day within two months, Argus Media reported, citing a senior oil ministry official. The nation pledged in Vienna to cut output by 8,000 barrels a day. Among OPEC countries, Iraq said it reduced volumes by 160,000 barrels a day. That's more than three-quarters of its targeted cuts of 210,000 barrels a day. The announcements come after the country's southern oil exports reached a record last month. We should wait and see if Iraq's announced cuts translate in lower exports. So far, they haven't been visible,†UBS's Staunovo said, adding that Iraq has limited storage capacity. Saudi Arabia, the United Arab Emirates, Qatar as well as Kuwait are complying with their promised cuts, Nawal Al-Fezaia, Kuwait's OPEC governor, said on Monday. Angola, Algeria also ordered oil companies to slash output in order to respect their pledges. Venezuela said on Dec. 27 it would implement its pledge to cut output by 95,000 barrels a day starting Jan. 1. A similar promise came from Gabon on Dec. 16, pledging a 9,000 barrels-a-day cut. Under the agreement, Iran is allowed to increase its output by 90,000 barrels a day as it seeks to regain pre-sanctions' levels. Libya and Nigeria are exempt from cuts as they aim to recover lost output due to internal violence and sabotage. http://everythingshale.com/news/2017/january/10/non-opec-producers-say-they-are-trimming-output/ http://everythingshale.com/news/2017/january/10/non-opec-producers-say-they-are-trimming-output/ Tue, 10 January 2017 21:15:26 http://everythingshale.com/news/2017/january/10/coats-rose-adds-three-lawyers-to-energy-practice/ Roger D. Scales, who received his law degree from the South Texas College of Law, will head the oil and gas section for Coats Rose. Joining the firm as associates includes Dan G. Blake, Jr., who received his law degree from St. Mary's University School of Law, and Jeffrey W. Hodges, who graduated from Texas Wesleyan School of Law (now Texas A&M University School of Law). Coats Rose, which also has offices in Dallas, Austin, San Antonio and New Orleans, has been planning to expand its oil and gas practice. It saw an opening this year with projections showing growth, including an increase in demand for energy-related legal services. http://everythingshale.com/news/2017/january/10/coats-rose-adds-three-lawyers-to-energy-practice/ http://everythingshale.com/news/2017/january/10/coats-rose-adds-three-lawyers-to-energy-practice/ Tue, 10 January 2017 19:35:23 http://everythingshale.com/news/2017/january/10/market-currents-iraqi-crude-exports-to-us-keep-rising/ 1) Last week we discussed how Middle East producers send the majority of their crude exports to Asia, and Iraq is no different. Amid stories  that Iraq is still sending full allocations to some refiners in Asia and Europe, we can see from our ClipperData that a half of all Basrah loadings last month went into Asia. India surpassed China last year as the leading destination for Basrah crude. The U.S. is the third leading recipient, while South Korea is fourth. Exports to India, China and South Korea last year accounted for 56 percent of all Basrah exports last year. 2) In terms of OPEC crude to the U.S., Iraq is the third largest supplier, behind Saudi Arabia and Venezuela. Last year, the U.S. received just under 400,000 bpd from Basrah, with Basrah Light accounting for just over 60 percent of these flows, and Basrah Heavy accounting for the rest. 3) An article  in the Wall Street Journal today draws on our ClipperData , highlighting how Iranian crude floating storage has dropped in recent days down to 17 million barrels, after being almost double this volume in September. The chart below shows crude floating storage for the Middle East as a whole, and how long it has been waiting there. The key takeaway is that Iranian barrels account for the lion’s share of the volume.   4) We have visited a similar chart to the one below before, but it has appeared in an article today , and serves as a useful reminder that the impact of low oil prices is going to chomp away at new oil production in the coming years. There is a silver lining, however. Even though only 3.7 billion barrels of conventional crude were discovered last year, the lowest amount since 1952, discoveries in 2017 are forecast to be higher, driven by higher prices encouraging more exploration. 5) Finally, the mighty Abudi Zein (ClipperData’s CEO) and myself will be presenting our 2017 outlook in Houston and New York this week. Although we are sold out for Houston, we have a couple of places left for New York on Thursday (12th) for analysts or traders. Sign up here to attend! http://everythingshale.com/news/2017/january/10/market-currents-iraqi-crude-exports-to-us-keep-rising/ http://everythingshale.com/news/2017/january/10/market-currents-iraqi-crude-exports-to-us-keep-rising/ Tue, 10 January 2017 19:10:20 http://everythingshale.com/news/2017/january/10/energy-department-us-oil-production-declines-are-over/ U.S. Energy Information Administrator Adam Sieminski noted that American oil production increased in the last three months of the year, marking the first quarterly increase since early 2015 when the two-year oil bust was just beginning to sink in. Among the report’s other highlights: • Despite increasing gasoline prices, U.S. fuel consumption is expected to reach a record high in 2017 because of a stronger economy and higher employment. • U.S. natural gas production is expected to rise the next two years, reversing the first annual decline in more than a decade, as natural gas prices rise. • Natural gas surpassed coal as the primary source of electrical power for the first time ever in 2016, but coal is expected to make a bit of a comeback in 2017 and could retake its leadership position. • U.S. oil production averaged 8.9 million barrels per day in 2016 and that amount is expected to grow to 9 million daily in 2017 to to 9.3 million barrels a day in 2018. http://everythingshale.com/news/2017/january/10/energy-department-us-oil-production-declines-are-over/ http://everythingshale.com/news/2017/january/10/energy-department-us-oil-production-declines-are-over/ Tue, 10 January 2017 18:57:05 http://everythingshale.com/news/2017/january/10/additions-to-renewable-energy-capacity-expected-to-dominate/ The agency expects that additions to electric capacity during the fourth quarter will account for more than half of all added electricity for the third year running. Timing for federal, state and local tax incentives means that planned renewable projects typically come online at the end of the year, and in 2016, nearly 60 percent of the planned projects were set to power up at the end of the year. Most of the nation’s renewable power comes from the West, where solar power dominates, followed by hydroelectric power, according to the EIA. Wind power is also a major source of renewable energy around the country, and is more evenly spread across other regions. http://everythingshale.com/news/2017/january/10/additions-to-renewable-energy-capacity-expected-to-dominate/ http://everythingshale.com/news/2017/january/10/additions-to-renewable-energy-capacity-expected-to-dominate/ Tue, 10 January 2017 17:18:48 http://everythingshale.com/news/2017/january/10/trump-and-the-us-biodiesel-market-in-2017/ The surprise election of Donald Trump as the 45 th President of the United States has sparked concern that the 10-year old Renewable Fuel Standard might come under attack by his administration despite Trump’s repeated comments during his campaign and after his November win that he supports ethanol in US transportation fuel. Ethanol is the primary renewable satisfying the RFS, with biomass-based diesel the second largest contributor in meeting the mandate. The RFS has several nested categories including cellulosic fuel. The renewable industry’s failure in producing enough cellulosic fuel to meet the mandate—or should we assign blame to unrealistic legislators in setting the target too high—has allowed the RFS to come under criticism. The high volume requirement for the renewable fuel nested category, overwhelmingly satisfied by corn-based ethanol, is another area of protest against the RFS. The increasing volume required to satisfy this portion of the RFS can’t be met with E10 alone, a 10% concentration of ethanol in gasoline, while restrictions remain for a higher concentration for conventional fuel vehicles. Meanwhile, flex-fuel vehicles that allow for a variety of higher ethanol blends in gasoline have only modestly added to US ethanol consumption. This reality has triggered adjustments to the statutory volume mandates under the RFS, and also spiked costs for many of the oil refiners that are obligated to meet the mandate through their purchase of Renewable Identification Numbers—the credit used to show compliance with the RFS. RINs, which are generated with the renewable and move through the supply chain with the blendstock, can be separated and sold in the open market. RIN values surged in 2016 in a repeat performance from 2013 when ethanol neared the 10% “blend wall,” prompting the US Environmental Protection Agency to downgrade the volume requirements under the RFS. Biomass-based diesel, primarily biodiesel made from soya oil, fats and grease while renewable diesel volume continues to increase, has largely been shielded from these criticisms. Indeed, biomass-based biodiesel has moved into the breach, covering volume shortfalls in other nested categories to more closely align annual RFS volume obligations issued by the EPA with the statute. On November 23, 2016, EPA, the administer of the RFS, finalized 2017 volume requirements for obligated parties—oil refiners and importers of petroleum-based transportation fuels—that remain below statute level, although above their proposal issued earlier in the year in May. For 2017, the total renewable fuel volume requirement is 19.28 billion gallons, 2.6% above the 18.8 billion gallons proposed in May 2016, while 19.7% less than the 24.0 billion gallons stated in the statute. For biomass-based diesel, the final renewable volume obligation remained as proposed at 2.0 billion gallons and at 2.1 billion gallons for 2018, the only nested category with the RVO determined for 2018. This is well above the 1.0 billion gallons stated in statute that’s the minimum annual RVO for biomass-based diesel since 2012. American Petroleum Institute President and CEO Jack Gerard reiterated the trade association’s position to end the RFS, saying at API’s annual luncheon on January 4 in Washington, DC, “repeal it, or significantly reform it.” He suggested a cap on ethanol content in gasoline at 9.7% which has previously been proposed in the US Congress would satisfy concerns by the oil and gas trade group. API highlighted how the US energy landscape has changed since the current RFS—the first RFS was enacted in 2005— was passed into law as part of the Energy Independence and Security Act, with the United States moving from energy scarcity to a potential position as net-energy exporter. The trade group said US crude oil and natural gas resources are 63% higher than forecast by the Energy Information Administration when the current RFS was passed into law. Demand for refined fuels is also below EIA projections with US gasoline demand 10% lower than what was forecasted 10 years earlier. “As we approach the 10 percent ethanol threshold in our fuel mix, which could mean substantial economic harm to American consumers, it is imperative that Congress revisit this broken RFS policy,” said API in their “2017 State of American Energy.” The price of RINs were volatile in November and December 2016 following the election of Trump, tumbling in mid-November on the uncertainty of what his presidency means to the RFS before rallying in response to the EPA’s finalized 2017 volume requirements and sentiment Trump won’t change the program. However, several of Trump’s nominees for positions in his administration have been critics of the program, triggering selloffs in the RIN market. They include Oklahoma’s Attorney General Scott Pruitt, nominated to head the EPA, an agency he has legally challenged on several occasions. Former Texas Governor Rick Perry who has been nominated as head of the Energy Department, a department he said in 2012 he would eliminate if president during a failed run to win the Republican nomination. In 2008 as the governor of Texas, Perry petitioned the EPA for a 50% waiver of the RFS volume requirements because enacting the full RFS would cause “severe economic harm,” which was denied by the EPA. Trump chose billionaire Carl Icahn to be a special advisor on rationalizing regulations. Icahn, a majority owner of an independent oil refiner, famously opined in an editorial in 2016 that Pablo Escobar, the now deceased Columbian drug lord, would have found speculating in the RIN market more profitable than trafficking cocaine. Independent refiners that lack blending capacity have seen profits evaporate because they must purchase RINs. However, Iowa Governor Terry Branstad, an ardent supporter of the RFS and Trump’s choice to be the US ambassador to China, has said Trump continues to support the RFS, calming the renewable fuels industry to a degree. Adding to the worry for the biodiesel industry is the lapse of a US$1.00 tax credit paid to blend biomass-based diesel into petroleum-based diesel, which expired on the last day of 2016. This credit has been a critical bridge between higher costing biodiesel and petroleum-based diesel, and the uncertainty on whether it would be extended into 2017 greatly limited trading for forward physical deliveries through the later part of 2016. “There is a clear correlation between the tax incentive and increased biodiesel production, which has grown from about 100 million gallons in 2005, when the tax incentive was first implemented, to a more than 2.5 billion gallon market in 2016,” said Anne Steckel, vice president of Federal Affairs for the National Biodiesel Board in a news release. “With less than a decade of commercial-scale production, biodiesel remains a young and maturing industry that needs stable, long-term tax policy to continue meaningful growth.” Considering Trump’s plan to close tax loopholes and expectations Republicans, which control both the Senate and the House of Representatives, would rewrite the US tax code there is speculation that this credit won’t be reinstated. If this assessment is correct, spot transactions could remain constrained, although imports would likely decline. Scott Irwin and Darrel Good with the Department of Agricultural and Consumer Economics at the University of Illinois contemplated the “push” for the advanced biofuels nested category within the RFS due to the shortfall in the cellulosic nested category, with the write down greater than for advanced biofuels. “That difference is 520 million gallons in 2017, much larger than in the previous two years,” they wrote in their farmdoc daily on December 7, 2016. “An important issue with regards to future implementation of the RFS, then, is the magnitude of the advanced mandate push, if any, under a new Administration.” In addition to the biomass-based diesel nested category, biodiesel can be counted against the advanced biofuels mandate. EPA set the final demand requirement for advanced biofuels in 2017 at 4.28 billion gallons, 7% above its May 2016 proposal of 4.0 billion gallons, while less than half of the statute’s 9.0 billion gallons for this year. In their analysis under multiple scenarios, Irwin and Good sets implied demand for biomass-based diesel at 3.083 billion wet physical gallons in 2017 that could decline to 2.883 billion gallons in 2018 or increase to as high as 3.363 billion gallons depending on how the Trump administration addresses the RFS. By 2022, the year when volume increases under the RFS end, biomass-based diesel demand could range from 3.316 billion gallons to 4.329 billion gallons. “[W]hile annual production of and consumption of biomass-based diesel and its feedstocks will likely increase substantially by 2022 in order to fulfill the advanced mandate, the magnitude of the increase could vary over a wide range depending on how much of the cellulosic mandate is effectively converted into additional biomass-based diesel mandate,” said Irwin and Good. In their most recent Short-term Energy Outlook, the EIA projects distillate fuel consumption to grow 1.5% to 3.94 million bpd in 2017 after dropping 3% to 3.88 million bpd in 2016 and 1% to 4.0 million bpd in 2015. The projected pickup in demand comes alongside expectations for quicker economic growth in the United States in 2017, with the latest data available from the US Bureau of Economic Analysis estimating a 3.5% annualized growth rate for the US economy in the third quarter 2016—the greatest quarterly expansion in two years. In the United States, growth in diesel demand correlates closely with an expanding economy since diesel is primarily used in commercial and industrial settings. Freight movements in November 2016 suggest the trend continued into the fourth quarter, with the Am erican Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index climbing 5.7% from year prior. “While I think the November gain overstates the strength in the freight markets, I do believe we are seeing some improvement that will continue into 2017. Retail sales are good, the housing market is solid, and the inventory overhang throughout the supply chain is coming down, all of which will help support truck freight volumes in 2017,” said ATA Chief Economist Bob Costello. Trucking serves as a barometer of the US economy, representing 70.1% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. The post Trump and the US Biodiesel Market in 2017 appeared first on Schneider Electric Blog . http://everythingshale.com/news/2017/january/10/trump-and-the-us-biodiesel-market-in-2017/ http://everythingshale.com/news/2017/january/10/trump-and-the-us-biodiesel-market-in-2017/ Tue, 10 January 2017 16:12:51 http://everythingshale.com/news/2017/january/10/reject-rex-projected-on-state-dept-headquarters/ Images with slogans like “Reject Rex” were projected onto the walls of the U.S. State Dept. in Washington Monday night, ahead of former Exxon Mobil CEO Rex Tillerson’s nomination hearing before the U.S. Senate Wednesday. The environmental group Greenpeace took credit for the guerrilla ad campaign in an email Tuesday morning, also crediting the groups Other 98% and Oil Change International. “Rex Tillerson has no diplomatic or government experience and a long track record of putting Exxon's profits ahead of U.S. interests,†Greenpeace USA Climate Liability Campaigner Naomi Ages said in a statement. Tillerson’s nomination hearing before the Senate Foreign Relations Committee is scheduled for 9:15 a.m. Wednesday in Washington. Tillerson is expected to take tough questioning from Democrats, on issues including his company’s activities around climate change and his relationship with Russian President Vladimir Putin. Following a meeting with Tillerson, U.S. Senator Jeff Merkley, D-Oregon, said Monday, “I still have significant questions about Mr. Tillerson's foreign policy views and how his four-decade career at one of the largest oil companies in the world prepares him to be our nation's top diplomat.” http://everythingshale.com/news/2017/january/10/reject-rex-projected-on-state-dept-headquarters/ http://everythingshale.com/news/2017/january/10/reject-rex-projected-on-state-dept-headquarters/ Tue, 10 January 2017 15:49:40 http://everythingshale.com/news/2017/january/10/new-study-improves-understanding-of-natural-gas-vehicle-methane-emissions-but-supply-chain-emissions-loom-large/ Many commercial fleet operators have considered switching their fleet vehicles from diesel to natural gas to take advantage of the growing abundance of natural gas and reduced emissions. Natural gas trucks have the potential to reduce nitrogen oxides emissions (NOx) from freight trucks and buses. Yet, adopting the emission reduction technologies and practices needed to curb the methane escaping during the production, transport and delivery of natural gas is critical to unlock the full environmental potential of these vehicles. Methane, the main component of natural gas, is a potent greenhouse gas released to the atmosphere at every step from production wells to the vehicle fuel tanks. Even small amounts of methane emitted across the natural gas supply chain can undermine the climate benefit of fuel-switching vehicles to natural gas for some period of time, as EDF research has shown. A newly published scientific study , led by researchers with West Virginia University at the Center for Alternative Fuels, Engines and Emissions, measured methane emissions from heavy-duty natural gas-powered vehicles and refueling stations, and is greatly expanding what we know about emissions from natural gas-fueled vehicles. The study is the first project in EDF's coordinated methane research series to analyze where and by how much methane emissions occur during natural gas end uses. The WVU study found that emissions from the vehicle tailpipe and engine crankcase were the highest methane sources, representing roughly 30 and 39% (respectively) of total pump to wheels (PTW) emissions. Fortunately, engines with closed crankcases have recently been certified by EPA, avoiding the single largest source of methane emissions from these vehicles. Fueling station methane emissions were reported to be relatively low, representing about 12% of total PTW emissions. WVU researchers based the fueling station emission estimates on the assumption that liquefied natural gas (LNG) stations have sufficient sales volume to effectively manage boil off gases, or the fuel lost as vapors when the LNG heats above its boiling point. Without alternative methods to manage boil off gas, low sales volume risks large methane releases. Eleven industry groups participated in the WVU study The American Gas Association, Chart, Clean Energy, Cummins, Cummins Westport, International Council on Clean Transportation, PepsiCo, Shell, Volvo Group, Waste Management, and Westport Innovations and provided researchers with important insights. Their active involvement and determination to go where the science led them in reducing truck methane emissions greatly strengthened the study. Measurements from the WVU study are helping to further our understanding of the climate impact of natural gas vehicles. This paper, along with other analyses, provides both industry and policymakers new insights to target technology improvements, and identify best practices for minimizing emissions. But pairing vehicle data with lifecycle emissions of methane across the entire supply chain remains essential to fully assess how natural gas trucks perform, from a climate perspective, relative to diesel trucks. While only about 3 percent of heavy duty trucks run on natural gas today, some analysts suggest their market share could reach as high as 50 percent over the next two decades if high oil and diesel prices return. Meanwhile, investments in natural gas-powered utility vehicles and transit buses are growing, with 11 percent of such vehicles already running on natural gas. As interest in natural gas vehicles grows, the time to get ahead of this methane supply chain leakage problem is now, before the industry hits a major growth spurt. Reducing methane leaks upstream of the vehicles themselves will be a key determinate in whether a shift in fuels will result in a positive or negative benefit for the climate. By  Joe Rudek and Jason Mathers Originally Published on January 6, 2017 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/10/new-study-improves-understanding-of-natural-gas-vehicle-methane-emissions-but-supply-chain-emissions-loom-large/ http://everythingshale.com/news/2017/january/10/new-study-improves-understanding-of-natural-gas-vehicle-methane-emissions-but-supply-chain-emissions-loom-large/ Tue, 10 January 2017 15:00:23 http://everythingshale.com/news/2017/january/10/exxonknew-activists-continue-to-push-fakenews/ Environmental activists have been struggling to keep the #ExxonKnew campaign alive, as a steady stream of disclosures over the past several months has undermined their efforts to convince more government officials to launch climate-related investigations. Now, with the nomination hearing of former Exxon President and CEO Rex Tillerson scheduled for Wednesday, they’re going right back to one of their staples: generating fake news. Case in point: the story that appeared this week in USA Today declaring that ExxonMobil previously did all sorts of business in Iran. The piece was pitched to USA Today (only after literally every other reporter in New York and Washington passed on it) by a group called American Bridge, which is aligned with anti-energy activists. But if your only source of information on the issue was what you read in the paper you picked up outside your hotel-room door, you wouldn’t know (for instance) that the company has no operations in Iran, or that once Exxon actually explained in detail all of this to the SEC when the agency asked about it back in the mid-2000s, the matter was essentially closed, with the SEC taking no further action (you can read the correspondence between Exxon and the SEC yourself online, here , here , here and here ). Just another example of activists pushing #fakenews. That’s just the beginning, though. The USA Today story comes after InsideClimate News (ICN), the Rockefeller-funded organization that produced the original #fakenews about Exxon, wrote a story last week under the headline: “ Federal Climate Investigation of Exxon Likely to Fizzle Under Trump ,” which was about President-elect Trump’s nominee to be the next U.S. Attorney General. “If he is confirmed by the Senate to replace Lynch, Sessions will become the nation’s top law enforcement officer and would hold ultimate authority on the future of any federal investigations of Exxon, making it highly unlikely that any investigation underway would proceed any further.” The only problem? There never was an investigation from the U.S. Attorney General’s office, and for good reason. After California Reps. Ted Lieu (D) and Mark DeSaulnier (D) asked Attorney General Loretta Lynch to open an investigation of ExxonMobil, the Department of Justice punted the request to the FBI in March 2016 to determine if there was enough to even warrant an investigation. There has been no movement on that ever since. As EID has noted before , emails obtained through the Freedom of Information Act (FOIA) have shown that diverse voices have cautioned #ExxonKnew activists on multiple occasions that a federal investigation simply wasn’t going to work out. That’s not all. Last month, the Los Angeles Times – which printed several of the original #ExxonKnew stories without disclosing that the Rockefellers had paid for them – ran an editorial calling on California’s next attorney general to “put the Exxon Mobil case high on his list.” The editorial claimed “California has its own inquiry underway,” just before admitting that the state’s attorney general, Kamala Harris, has refused to confirm that such an inquiry even exists. Think about that. One of America’s largest newspapers used the attorney general’s refusal to comment on an investigation as proof that such an investigation is taking place, and that the next AG should keep that “case” alive. One would think a legitimate newspaper would try to uncover the truth about the attorney general’s activities on this front, especially since groups like InsideClimate News have used California’s yet-to-be-confirmed investigation as part of its application for a Pulitzer Prize . Instead, the Times appears happy to let unsubstantiated claims about government activities not only remain unchallenged, but also serve as the basis for their editorials. Considering all this, it’s no wonder that the #ExxonKnew campaign’s #DayAgainstDenial protests across the country had embarrassingly low attendances, and were virtually ignored.  Just to provide a few examples, activists in Denver only managed to get a couple dozen protesters to their rally in front of Senator Bennet’s (D-CO) office, which even featured an original musical performance: In Los Angeles, there wasn’t much action at Senator Kamala Harris’ (D-CA) office, with about a couple dozen protesters gathered there as well: In Houston, only a handful of activists gathered outside Senator Cruz’s (R-TX) office: Of course, these events were billed as protests against “Trump’s climate denial cabinet, including Rex Tillerson” – except that just about every news media outlet has reported that Tillerson, and ExxonMobil, believe climate change is a serious issue. Tillerson and Exxon also support the Paris agreement and a carbon tax. Even Democrats on the U.S. Senate Foreign Relations Committee have showed that this sort of “denial” claim is false. New Mexico Senator Tom Udall (D) said Rex Tillerson’s climate stance is a “ bright spot ”: “I certainly have some significant disagreements with Mr. Tillerson’s recent corporate record, from the appropriate response to Russian aggression on the world stage to the importance of investment in cleaner forms of energy,” Udall said. “However, I appreciated the time and attention he devoted to answering my questions. In particular, I was pleased to learn more about his position on climate change policy. I’m encouraged that, contrary to the extreme statements by President-elect Trump, Mr. Tillerson believes in science and sees value in the United States remaining as a party to the Paris Agreement. I also appreciate that, in the past, he has advocated for solutions to reduce carbon emissions rather than denying the existence of climate change.” (emphasis added) Senator Cory Booker (D-N.J.) echoed this statement. As CBS News reported , Still, he [Booker] added that he was encouraged by the nominee’s comments on climate change and said he hoped to hear more from him on that publicly. “ Climate change is real, and the science of climate change is real,” he said. “It—it was nice to hear him address that, and I think he should address that in a public forum .” (emphasis added) Meanwhile, the Chairman of the Foreign Relations Committee, Bob Corker (R-Tenn.), rightly said , “I think Democrats are sitting down with him and realizing that this guy is a scientist, an engineer that believes in science , and so on some of the issues that you know they care about, I think the answers they’re getting are much different than they thought ,” Corker said. (emphasis added) Even Steve Coll of the Columbia School of Journalism, which manufactured the original #ExxonKnew narrative, has noted that Tillerson was responsible for moving Exxon forward on climate issues. As Coll said in an NPR interview , “[Tilllerson] started talking about climate in a different way. Yes, the risks are there. They’re serious. We should take them seriously.” It is worth emphasizing, of course, that the basis for the #ExxonKnew campaign was itself essentially fake news. The original “investigative reports” used cherry-picked factoids, while ignoring facts and important context, to produce a completely distorted view of ExxonMobil’s work on climate change. What this all reveals is that the #ExxonKnew effort has devolved into the inevitable fringe environmental campaign. If it had not, activists wouldn’t need to levy false accusations about top Exxon officials and their views on climate change, and they certainly wouldn’t need to leverage government investigations that aren’t actually occurring. Indeed, it appears that #ExxonKnew has simply become #FakeNews. http://everythingshale.com/news/2017/january/10/exxonknew-activists-continue-to-push-fakenews/ http://everythingshale.com/news/2017/january/10/exxonknew-activists-continue-to-push-fakenews/ Tue, 10 January 2017 14:42:54 http://everythingshale.com/news/2017/january/10/nrg-s-carbon-capture-plant-fully-operational/ By the first week of January the plant had already captured 100,000 tons of carbon, and barring any major glitches, plant operators expect to hit a million tons by early summer. Houston-based NRG began construction on the project in 2014, and the company says it finished in December, on time and within its $1 billion budget. But whether or not the new plant will be profitable depends on the price of crude oil, which is nearly half what it was when NRG began construction years ago.  The carbon dioxide is pumped into oil wells to increase production and prices need to be relatively high to make it worthwhile for oil companies to use the process, known as increased oil recovery, which can add costs of $20 to $30 a barrel, according to the Energy Department. The plant captures carbon released by the WA Parish coal-fired power plant, located in Thompsons, and runs it through a complex chemical process that separates the carbon, liquefies it and sends it 80 miles through a pipeline. The cost of running Petra Nova would be borne by the sales of oil, rather than by electric customers, said David Greeson, NRG’s vice president of development. http://everythingshale.com/news/2017/january/10/nrg-s-carbon-capture-plant-fully-operational/ http://everythingshale.com/news/2017/january/10/nrg-s-carbon-capture-plant-fully-operational/ Tue, 10 January 2017 14:31:24 http://everythingshale.com/news/2017/january/10/noble-adds-7-200-acres-in-delaware-basin/ Noble, based in Houston, said the properties include current production of about 2,400 barrels of oil and gas per day, expanding the company's total Delaware position by about 20 percent to 47,200 net acres and 12,000 barrels of oil equivalent per day. Funding for the purchase came from cash on hand. The company did not say from whom it bought the rights. RELATED: Permian land deals boom Gary Willingham, Noble's executive vice president of operations, said the additions represent a disciplined approach†to growth. The company recently added a third drilling rig to the basin and is aggressively moving forward with development,†Willingham said. Noble landed 46,000 acres in the Delaware when it bought Rosetta Resources in 2015 . The Delaware is the western lobe of the Permian Basin and stretches into New Mexico. http://everythingshale.com/news/2017/january/10/noble-adds-7-200-acres-in-delaware-basin/ http://everythingshale.com/news/2017/january/10/noble-adds-7-200-acres-in-delaware-basin/ Tue, 10 January 2017 12:09:47 http://everythingshale.com/news/2017/january/10/report-russia-backed-anti-fracking-propaganda-in-attempt-to-undermine-us-industry/ Largely overlooked in the coverage of last Friday’s release of a report confirming Russia interfered with November’s presidential election is the latest round of evidence showing Russia has also been attempting to undermine another U.S. institution — the shale revolution. The following excerpt buried on page 18 of the Office of the Director of National Intelligence (ODNI) report reveals Russia used its state-funded television network, Russia Today (RT), as a platform to push anti-fracking disinformation aimed at harming the U.S. shale industry and protecting Russia’s global market share. Notably, this RT programming has featured interviews with leaders of the U.S. anti-fracking movement , and the intelligence report indicates that this anti-fracking propaganda campaign is targeted at a U.S. audience: This cozy collaboration between leaders of the U.S. anti-fracking movement and RT considered, we would be remiss not to note it was just three months ago that leaked documents containing a number of private speeches given by Hillary Clinton confirmed long-held suspicions the Russians have been funding what she called “phony” anti-fracking efforts across the globe. As Clinton put it in a 2014 speech sponsored by tinePublic: “We were up against Russia pushing oligarchs and others to buy media.  We were even up against phony environmental groups, and I’m a big environmentalist, but these were funded by the Russians to stand against any effort, oh that pipeline, that fracking, that whatever will be a problem for you , and a lot of the money supporting that message was coming from Russia.” As The New York Times reported 2014, there is also circumstantial evidence that Russia was backing anti-fracking groups in Eastern Europe in an effort to curtail shale development there and preserve its market share. Clinton discussed Russia’s motivation for these actions in a 2014 speech at the Palais des Congrès de Montréal that was made public, “So how far this aggressiveness goes I think is really up to us. I would like to see us accelerating the development of pipelines from Azerbaijan up into Europe. I would like to see us looking for ways to accelerate the internal domestic production. Poland recently signed a big contract to explore hydraulic fracturing to see what it could produce. Apparently, there is thought to be some good reserves there.  And just really go at this in a self-interested, smart way. The Russians can only intimidate you if you are dependent upon them .” Though most of the Eastern European shale prospects Clinton spoke about have not panned out, that hasn’t kept shale gas from presenting a threat to Russia’s energy dominance in the region. That’s because fracking has led to U.S. natural gas production surging nearly 50 percent the past decade — allowing the U.S. to surpassed Russia as the world’s top natural gas producer, as the following Energy Information Administration chart illustrates. This record production allowed the U.S. also export 50 Bcf of liquefied natural gas (LNG) in the first six months of 2016. The U.S. Energy Information Administration (EIA) also projects U.S. LNG exports averaging 1.3 Bcf/d in 2017 and predicts the U.S. becoming a net natural gas exporter in the second half of next year. These developments would have been unimaginable just five years ago — and many of those LNG exports will continue going to countries that were once reliant on Russia, further cutting into its global market share. The latter is amplified by the fact that Russia’s economy inordinately relies on energy and has been hit hard by the recent market downturn. This would also explain why Russian president Vladimir Putin has said places that allow fracking “no longer have water coming out of their taps but a blackish slime” and Russian state-owned gas company Gazprom has said fracking poses “significant environmental risks” to water supplies. If these claims sound familiar, it’s probably because they are alarmingly similar to the ones repeated by the Keep-It-In-The-Ground (KIITG) movement. So in many ways, KIITG’s agenda mirrors that of Russia. Obviously, that agenda is not in the best interest of America or the rest of the world. http://everythingshale.com/news/2017/january/10/report-russia-backed-anti-fracking-propaganda-in-attempt-to-undermine-us-industry/ http://everythingshale.com/news/2017/january/10/report-russia-backed-anti-fracking-propaganda-in-attempt-to-undermine-us-industry/ Tue, 10 January 2017 00:26:06 http://everythingshale.com/news/2017/january/09/nationwide-layoff-watch-biglaw-firm-tells-underperforming-office-to-go-frack-itself/ Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/09/nationwide-layoff-watch-biglaw-firm-tells-underperforming-office-to-go-frack-itself/ http://everythingshale.com/news/2017/january/09/nationwide-layoff-watch-biglaw-firm-tells-underperforming-office-to-go-frack-itself/ Mon, 09 January 2017 18:43:25 http://everythingshale.com/news/2017/january/09/the-week-ahead-for-crude-oil-gas-and-ngls-markets-010917/ CRUDE OIL Crude oil inventories decreased by 7.1 MMBbl last week according to the EIA. Gasoline and distillate inventories increased by 8.3 MMBbl and 10.1 MMBbl respectively. Total petroleum inventories posted a build of 6.1 MMBbl. The withdrawal in crude oil stocks was largely due to the lower imports (down 984 MBbl/d). Being the last week of the year, unexpected inventory report results can be expected, as tax strategies may incentivize newly arriving cargoes to remain on the water to avoid taxation onshore. Regardless, the decrease in crude oil inventories was larger than analyst expectations, which initially sent a bullish signal to the market. However, the withdrawal in crude oil was more than offset by the sizeable refined product builds, leading to a reversal of the bullish sentiment. WTI prices have remained rangebound at the $50-55/Bbl levels since the OPEC announcement of a production cut. Now, the market waits for data regarding compliance with the cuts to move out of the range: Bullish news of OPEC members discussing lower cargo loadings with their customers in the new year have boosted expectations that the quotas will be adhered to, at least in the early months. A Reuters survey showed that OPEC supply fell in December to 34.18 MMBbl/d from 34.38 MMBbl/d the prior month. The largest decline came from Nigeria due to an attack on pipeline infrastructure. Sources in Saudi Arabia have echoed that production was down to 10.06 MMBbl/d in January, which would mean that the largest OPEC producer was complying with its quotas. Adherence to the quotas, at least to some degree is expected by the market, as prices tested the high end of the range this week on the bullish news regarding the cuts. Data that will confirm or deny compliance with quotas will not be known until late January. Periodic bearish news and lack of information regarding the success or failure of the anticipated OPEC cuts has limited upward price movement in recent weeks. WTI ran into selling from both the commercial short and the managed money sector after testing the $55/Bbl level as per the most recent CFTC report. News of higher production from Libya (who was completely exempted from the quotas along with Nigeria) continue to work against the goal of the production cut by OPEC. The continuously rising rig count in the US also underlines the ability of shale producers to ramp up activity and bring production on quickly as prices rise. DrillingInfo expects prices to remain rangebound until new data pushes WTI out of the range. Although data signaling initial compliance may pull prices north of the current ceiling, upside will continue to be limited by US production potential and possibly degrading compliance in future months as prices climb. Partial or non-compliance could pull prices down to mid-$40/Bbl levels.   NATURAL GAS Natural gas production declined 360MMcf/d week-on-week as the colder weather (towards the end of the week) limited production to the market, and freeze-offs in the South were observed. A portion of those declines were offset with gains in Canadian supplies as they increased 200 MMcf/d compared to the week before. Last week the overall warmer temperatures from the previous week disappeared and Res/Com demand rose 10.3 Bcf/day; these temperature declines in the South and Gulf demand areas also pushed up power demand by 3.1 Bcf/day. This trend of higher res/com and power will continue early this week following some of the coldest temperatures observed so far this season (nationally) over the weekend. The picture for demand will soften as the week progresses and temperatures in the 6-10 day period look to be warming. There is a lack of confidence in the longer-term forecasts (beyond the 10-day period) and the longer range forecasts proposed by the primary models have been very inaccurate so far this winter season. This type of back and forth temperature pattern and issues with the longer range modeling is consistent with a weak to non-existent La Nina pattern. The storage report last week was well below expectations at only a 49 Bcf withdrawal and sent spot prices to a recent low $3.172. This week’s storage report will provide a more seasonal withdrawal (around 140) while next week’s report should show a significantly higher withdrawal (+200). The report continues to leave inventories below the 5-year average and well below the year-on-year comparison. Prices action was very bearish from the start of last week as prices opened $0.156 below the previous Friday close and never recovered to those levels during the week. As mentioned in this weekly report last week, price action in the futures market is much more focused on the longer-term forecasts. This focus is likely to create extreme volatility in the market. Any changes to the longer-range forecasts (especially due to the lack of confidence in the long term models) will continue to have a dramatic effect on price action. Even with the dramatic drop in prompt prices on Jan 3rd, the Managed Money sector of the market increased their length (as well as the short position) according to the Commitment of Traders Report dated Jan 3rd. The Managed Money Long sector now represents 22.2% of total open interest, second in percent of open interest only to the Commercial short (producers hedging) at 25%. DrillingInfo has been calling for a rise in prices to facilitate additional investment in drilling rigs. To date, the price action in the summer and fall 2017 has not responded to incentivize additional gas-directed investment. While price declines for the upcoming summer did not drop as far as the winter months, the declines have delayed the ability to incentivize additional drilling. This process may take time to develop, allowing the market to fully comprehend the end of March storage levels to support the necessary rise in price.   NGLS Propane: Propane inventories decreased 2.7 MMBbl last week as reported by the EIA, less than half the withdrawal seen in the previous week. Less severe temperatures have led to weaker storage withdrawals. Propane stocks now sit at 84.1 MMBbl, roughly 12.2 MMBbl lower than this time last year. However, propane stocks are still well above the five-year average of 59.2 MMBbl for this time of year prior to 2015 (before the price crash). Drillinginfo expects a higher withdrawal in this week’s EIA report due to temperatures dropping last week. Ethane: Prices dropped along with natural gas prices, due to warmer weather seen in the long term forecast. Prices will largely continue to move with natural gas and weather forecasts, however, the uncertainty of the long term weather forecast leaves the market volatile. Butanes/Natural Gasoline: Towards the beginning of the week, normal butane prices appeared to normalize, sitting below natural gasoline and isobutane prices. However, toward the end of the week, normal butane prices surpassed isobutane prices. There is speculation that this is due to an increase in gasoline blending demand, which is backed by last week’s gasoline build of 8.3 MMBbl. Last Wednesday, Phillips 66 and Spectra Energy announced the reorganization of DCP Midstream. The reorganization combines all midstream assets of DCP Midstream and DCP Midstream Partners into the new DCP MLP, creating the largest NGL producer and gas processor in the United States. http://everythingshale.com/news/2017/january/09/the-week-ahead-for-crude-oil-gas-and-ngls-markets-010917/ http://everythingshale.com/news/2017/january/09/the-week-ahead-for-crude-oil-gas-and-ngls-markets-010917/ Mon, 09 January 2017 15:59:38 http://everythingshale.com/news/2017/january/09/the-real-cybersecurity-issues-behind-the-overhyped-russia-hacks-the-grid-story/ No, the U.S. power grid was not hacked by Russia-but utilities still face some real cybersecurity threats. Over the past few days, we've seen a story about Russian agents hacking the U.S. power grid spread like wildfire across the internet — only to be debunked as a wild overstatement of the facts at hand. Yes, a single laptop belonging to Vermont utility Burlington Electric was found to have visited an IP address cited by the Department of Homeland Security and the FBI as being associated with a Russian hacking operation, dubbed Grizzly Steppe, that also hacked the U.S government during the election. But there's no evidence that this amounted to anything other than a utility employee checking his or her Yahoo email account, as the Washington Post reported Monday in what amounts to an extensive retraction of its Friday story that started the firestorm. At the same time, cybersecurity experts see the potential to learn from the whole affair. After all, the very real shutdowns of Ukrainian grid substations in December 2015 — the first-ever confirmed cyberattack against grid infrastructure — got started through similarly innocuous intrusions into utility IT systems. That's the conclusion of a report from the SANS Institute , a cybersecurity training organization that traced the Ukrainian outage to a sophisticated campaign. The attackers gained entry to utility computers and obtained user credentials and passwords, as well as other key data. They then used that information to infiltrate the industrial control systems (ICS) and automated grid devices such as breakers, serial-to-ethernet data converters and uninterruptible power systems. There's no evidence whatsoever that anything like this has happened in Vermont, or elsewhere in reported instances of cyber-intrusions into U.S. grid systems. But that doesn't mean that these possibilities should be dismissed out of hand, Mihir Kapadia, vice president of engineering for cybersecurity firm N-Dimension , said in a Tuesday interview. Most of the threat indicators coming from the FBI-DHS Joint Analysis Report (JAR) were what we would deem weak indicators,†Kapadia said. When we get information like this, the first step is to analyze and vet it, and start to classify it. There are some weak indicators of compromise — which by no means people should ignore. But it's all a starting point for a deeper investigation.†In the case of the Burlington Electric laptop’s visit to a JAR-flagged IP address, There are a lot of legitimate reasons why you would have traffic between one of your machines and Yahoo,†he said. At the same time, hackers often use servers to launch phishing attacks — posing as a real company to engage computer users in email exchanges or website visits that deliver malware to their computers — and then move on to different servers after some time. If we have recorded timestamps of these events, we can start to piece it together,” said Kapadia. “Was this done under suspicious circumstances, or does it represent legitimate traffic?†Other, stronger threat indicators from the DHS-FBI report include injection flaw techniques that attempt to send commands to a browser or database, or cross-site scripting vulnerabilities that allow attackers to insert and execute unauthorized code in web applications. Based on our analysis, we'd say that's not a strong indicator — it's probably a medium indicator of compromise, since it's more specific,” Kapadia said. All of these threat indicators pertain to a Stage 1†cyberattack on a utility — the part targeting its business IT equipment and networks. Moving on to Stage 2†requires the leap from IT systems and into the operations technology (OT) networks, such as the SCADA networks that run power grids. Companies typically rely on the separation between corporate IT networks and OT systems to bar entry from one to the other. But we're too comfortable relying on that separation,†Edgard Capdevielle, CEO of industrial control system cybersecurity startup Nozomi Networks , said in a Tuesday interview. With the increasing level of automation and interconnection between IT and OT, that is a permeable wall; it is not a brick wall,” he said. Specifically, hackers with access to IT networks can gather credentials and passwords that allow them to access the virtual private networks that connect business networks to OT systems, breach the firewalls between the two, and gain control of devices like remote terminal units and programmable logic controllers that operate automated industrial or grid equipment. Protecting these OT systems is complicated by the fact that they tend to run on software that's years out of date, Capdevielle added. The technology adoption and innovation in the OT side of the fence is lagging,†he said. These sets of folks are just moving off Windows XP. Windows 7 is just happening right now — which for IT, happened seven to 10 years ago. So that means they have very little visibility, very little control, very little asset management on the PLC side of the house. The ability to troubleshoot things is not the best.†Making use of access to OT systems requires a high level of understanding of the industrial or grid systems they command, in order to achieve the effects attackers are after. That's a more complicated matter than hacking IT systems to steal data or run denial-of-service attacks. In many cases, there is significantly more value, depending on the attacker's current goals, in performing espionage than in perpetrating an actual attack that would include the destruction or manipulation of systems,†according to a SANS Institute report on the subject,   Industrial Control System Kill-Chain . Even so, it's important to identify Stage 1 threats that are leading up to a full Stage 2 cyber-physical attack,†since sustained access provides the opportunity for attackers to initiate follow-on actions later if they align with national security or military goals and/or criminal objectives,†the report noted. In this context, the fact that the Burlington Electric laptop in question wasn't connected to the utility's OT network isn't very reassuring, said Michael Assante, the ICS/SCADA lead at the SANS Institute, who co-authored the reports on the Ukrainian grid cyberattack and the ICS Kill-Chain. The whole goal is to get a host, and then start harvesting credentials,†he said. If that laptop was really associated with [Russian intelligence services] activity, and there's malware on it, and it was discovered five weeks later, that's ample time for the bad guy to achieve significant persistence and control. They're far past that laptop.†To be clear, Assante isn't suggesting that's what happened in the case of Burlington Electric. But he did note that the Department of Homeland Security's Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) has documented attempts by Russia to access U.S. energy infrastructure over the last five years, using malware such as Black Energy 2 and Havex, that were only discovered months to years after their introduction. Havex and Black Energy 2 were both campaigns discovered in the 2013-2014 timeframe,†he said. They were pretty broad-reaching access campaigns, in Europe and the United States, getting into infrastructure through various techniques,†including some complicated efforts such as Trojan-izing†industrial control system vendor software update files to gain access and compromise systems. People are spending money to do this. And when we learned about them, peeled the onion layers back, they had been going for some time — we caught them later in the game,” said Assante. “So I am concerned we have had compromises to the infrastructure.†By Jeff St. John Originally published on Greentech Media January 4 2017 Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/09/the-real-cybersecurity-issues-behind-the-overhyped-russia-hacks-the-grid-story/ http://everythingshale.com/news/2017/january/09/the-real-cybersecurity-issues-behind-the-overhyped-russia-hacks-the-grid-story/ Mon, 09 January 2017 15:00:52 http://everythingshale.com/news/2017/january/09/keeping-dated-brent-current-as-north-sea-production-declines-fuel-for-thought/ One of the most dominant conversation topics in the crude world over the last several years has been the declining production profile in the North Sea region. North Sea grades—and particularly the light, sweet, distillate-rich crudes that have dominated regional production historically—have formed the backbone of the Dated Brent assessment. However, as the region has matured, production has begun to decline. This has happened more slowly perhaps than expected, particularly given the low price environment that has hampered regional investment for the last three years or so. While a lot of the market chatter around this has quite reasonably centered on the possible impact this will have on the basket that makes up Dated Brent, it’s important to note these declines have not been limited to Brent, Forties, Oseberg and Ekofisk (BFOE), but have been consistent across the North Sea region. Furthermore, most of the newer discoveries in the North Sea over the last decade have differed from the “light, sweet” style that has been synonymous with the region. The newer grades are overwhelmingly more heavy, more sour and—perhaps most importantly—more acidic than the classic BFOE grades. Over the years, a number of regional grades, current and future, have been suggested—both by S&P Global Platts and by the market—as possible additions to BFOE moving forward. Platts has always taken the view that the best solution moving forward to liquidity in the FOB Dated Brent market should lie within the North Sea region. This position is shared by much of the market at large. It’s become increasingly clear that there is no perfect solution, but there are a number of possible solutions that can be adapted moving forward. When looking at what grades should be included in the Dated Brent basket, Platts looks at a number of different factors including: a diversity of buyers and destinations; stable grade quality; a steady and reliable production rate; that a given grade is not subject to undue political influence; and that it contains a long-term, stable production profile. Considering Norway’s Troll for the Brent basket Consequently, Platts has started looking more closely at the role that Norway’s Troll can play in BFOE moving forward. Troll is a light, sweet distillate-rich crude grade with a healthy production profile of 240,000 b/d that, coincidentally, prices quite neatly into Dated Brent. However, it differs from the rest of the BFOE complex in one key way: its acid content. Historically, this has seemed an insurmountable barrier to adding Troll to the BFOE basket. But as the refining pool in Europe has upgraded and diversified, it’s looking like much less of an issue than it used to be. The acidity of crude oil has traditionally been an area of concern for refiners. Crude oil with a higher TAN, that is to say Total Acid Number, has the potential to be more corrosive to the component parts of a refinery than the more prominently known low acidity crude that has historically been produced in the North Sea. There is no generally measurable relationship between TAN and the detrimental impact on a refinery. However, it is Platts understanding that crude with a TAN measured above 1 is treated with more caution by European refiners. These grades are not considered suitable refinery feedstock by many facilities without significant levels of blending with other lower TAN crudes or chemical treatment to mitigate the impact of acidity. In the case of Troll, with a TAN of 0.7, it is considered only moderately more acidic than what is understood to be the low TAN upper limit of 0.5. Moreover, compared to other more acidic crudes, such as Heidrun and Grane, if Troll is blended even with small volumes of a lower TAN crude oil (in this case Forties), the acidity of the created refinery feedstock quickly falls below what is considered the low TAN upper limit. As such, it is Platts understanding that it remains suitable feedstock for Europe’s refiners and fully fungible in crude oil markets. The addition of Troll to the Dated Brent basket helps to allay the projected production declines in BFOE, and would add a healthy volume through to 2019. Platts is opening a formal review of additional crudes for Dated Brent and soliciting feedback in particular for the addition of Norway’s Troll to the basket of crudes reflected in its Dated Brent FOB North Sea and Dated Brent CIF Rotterdam assessments, as well as its Cash BFOE assessment. Comments on the proposed change are being accepted until January 31. Please send comments to: europe.crude@spglobal.com . The post Keeping Dated Brent current as North Sea production declines: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2017/january/09/keeping-dated-brent-current-as-north-sea-production-declines-fuel-for-thought/ http://everythingshale.com/news/2017/january/09/keeping-dated-brent-current-as-north-sea-production-declines-fuel-for-thought/ Mon, 09 January 2017 05:58:31 http://everythingshale.com/news/2017/january/06/energy-department-launches-new-manufacturing-usa-institute-focused-on-recycling-and-reusing-materials/ WASHINGTON - As part of the Manufacturing USA initiative, today the Energy Department announced its new Reducing Embodied-energy and Decreasing Emissions (REMADE) Institute, which will be headquartered in Rochester, New York and led by the Sustainable Manufacturing Innovation Alliance.  REMADE will leverage up to $70 million in federal funding, subject to appropriations, and will be matched by $70 million in private cost-share commitments from over 100 partners. The REMADE Institute will focus on driving down the cost of technologies needed to reuse, recycle and remanufacture materials such as metals, fibers, polymers and electronic waste and aims to achieve a 50 percent improvement in overall energy efficiency by 2027. These efficiency measures could save billions in energy costs and improve U.S. economic competitiveness through innovative new manufacturing techniques, small business opportunities, and offer new training and jobs for American workers. The REMADE Institute is a key example of how public-private partnerships like Manufacturing USA are critical to advancing America's low-carbon economy and strengthening manufacturing industries across the country,†said Energy Secretary Ernest Moniz. This Institute will be an important catalyst to leverage innovation and energy efficient technologies that will reduce harmful emissions while creating jobs and building America's 21 st  century economy.†U.S. manufacturing accounts for nearly 25 percent of the nation's total annual energy use. The physical products that are created as a result of manufacturing embody most of that energy. The research and deployment of cost-effective technologies that could reduce the energy used in materials production could offer energy savings of up to 1.6 quadrillion BTU annually in the U.S. more than the electricity, oil and other energy consumed by New Hampshire, Hawaii, Delaware, Rhode Island, Washington, D.C. and Vermont combined. Extracting raw materials like steel and aluminum for manufacturing is energy intensive as is the manufacturing process used to make products with these materials. By enabling recycling and remanufacturing (the rebuilding of original products using a combination of reused or recycled parts) technologies, the Institute will dramatically reduce life-cycle energy consumption for products and improve overall manufacturing efficiencies. The focus also includes new ways for information collecting; gathering, identification and sorting of end-of-life and waste materials; separating mixed materials; removal of trace contaminants and robust and cost-effective reprocessing and disposal methods. REMADE is the fifth Energy Department-led institute in the multiagency network known as Manufacturing USA, also known as the National Network for Manufacturing Innovation. Since it was established four years ago, Manufacturing USA has grown from a single institute to a network of 13 institutes. Led by manufacturing experts renowned in their field, the  Manufacturing USA Institutes  have attracted over 1,300 companies, universities and nonprofits as members starting with 65 members and now at more than 1,000. The institutes continue to attract new business investment to their regions, develop cutting-edge technology and train American workers to apply new skills to our growing manufacturing sector. To date, the federal government's commitment of more than $920 million has been matched by more than $1.87 billion in non-federal investment. For more information about the REMADE Institute and participating organizations, visit  Energy.gov . Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/06/energy-department-launches-new-manufacturing-usa-institute-focused-on-recycling-and-reusing-materials/ http://everythingshale.com/news/2017/january/06/energy-department-launches-new-manufacturing-usa-institute-focused-on-recycling-and-reusing-materials/ Fri, 06 January 2017 20:00:19 http://everythingshale.com/news/2017/january/06/state-senator-oil-and-gas-development-in-ohio-is-off-to-a-great-start-in-2017/ 2017 is off to a truly amazing start when it comes to shale-related news for the Buckeye State. Week after week we are hearing positive news about investment and job creation coming to the state — and it’s all thanks to fracking. From pipeline projects, natural gas-fired power plants and drilling programs signaling a return to exploration and production, it’s “all good,” as Ohio Congressman Tim Ryan recently said . This week was no exception, as the Youngstown Business Journal reported steel manufacturing is coming back online. In an interview with EID, newly elected state Sen. Sean O’Brien (D) — whose district is an area of Ohio that has been heavily impacted by the ancillary industries that support oil and gas development — credited shale development for the investment coming to his district and emphasized that 2017 is off to a “great” start when it comes to the industry driving economic growth in the state, “We’re starting to see significant economic change in the valley due largely to oil and gas development here in Ohio. This is a positive sign for the entire region. There’s no question energy development in Ohio is off to a great start this year. For my district, the state of Ohio and the country, the return of natural gas exploration and the ancillary industries that support it are critical to bringing back middle-class jobs. This week alone, we have the announcement of return to work and new hiring’s at Vallourec; in Lordstown, the announcement of the construction of a second gas fired power plant. These two projects will create hundreds of good paying jobs, billions of dollars in investments and will have a huge impact on the area.  Both of these projects are a direct result from what is happening with the oil and gas here in Ohio.  So from an economic and energy standpoint, 2017 is looking very promising ” Yes, it has been confirmed that an Ohio steel manufacturing company has announced that are indeed hiring, and it’s full steam ahead as they look to fill orders created by the demand for steel pipe used by the oil and gas industry. All eyes are on Vallourec Star, as the company has announced its plans to ramp up production of steel pipe used in oil and gas exploration. As company spokesperson, Jean Gaetano told the Business Journal , “We’ve seen signs of improvement in the U.S. oil and gas market where the rig count and OCTG [oil country tubular goods] demand have increased for the first time since the end of 2014. The increased demand has resulted in increased production volumes at all Vallourec Star locations. This progressive market recovery is anticipated for 2017.” Ohio’s current rig count stands at 20, which is a vast improvement over the lows of last year, signaling a slow recovery in oil and natural gas drilling in the Utica Shale. The news today also reinforces statements that were recently made at a bipartisan event touting the manufacturing and energy infrastructure associated with the oil and gas industry. The news also underscores the extensive economic impact horizontal drilling and hydraulic fracturing has on a community. In this case, thanks to improvement in rig counts, Vallourec Star is ramping up production to create the steel pipe used as part of the process. To bring gas and oil and to market we also need energy infrastructure. Bipartisan support for oil and gas development is also evident in a recent poll conducted by the National Association of Manufacturers (NAM) that found 84 percent of Buckeye State residents — a mix of Democrats and Republicans — said they would like to see U.S. energy development increase. Eighty-six percent of those surveyed said they support construction of more pipelines, natural gas compressor stations and power plants. http://everythingshale.com/news/2017/january/06/state-senator-oil-and-gas-development-in-ohio-is-off-to-a-great-start-in-2017/ http://everythingshale.com/news/2017/january/06/state-senator-oil-and-gas-development-in-ohio-is-off-to-a-great-start-in-2017/ Fri, 06 January 2017 18:48:24 http://everythingshale.com/news/2017/january/06/ohio-anti-fracking-group-quietly-dismantles-after-disappointing-study-results/ An Ohio anti-fracking activist group has gone radio silent and appears to have dismantled after two studies it coordinated and funded failed to confirm its anti-fracking narrative. Carroll County, home to the largest number of Utica Shale wells and the first county in Ohio where fracking really started booming, has also been home to Carroll County Concerned Citizens (CCCC) , a small anti-fracking activist group. Over the past few years, this group (associated with the Frack Free America National Coalition ), has held monthly meetings and used its website to provide a flurry of misinformation about the oil and gas industry. But most notably, CCCC has been a hub for “volunteer recruitment” for fracking studies. Last year, two of the studies the CCCC participated and funded yielded “ disappointing ” results, as a University of Cincinnati (UC) groundwater fracking study showed “ no evidence for natural gas contamination” and another UC fracking study on air quality was retracted, as it exaggerated cancer risks by 725,000 percent. Both of the UC studies’ lead authors announced their findings at CCCC meetings. Since then, there have been no meetings held or scheduled in the future, and it appears there has not been any activity whatsoever since hearing this “disappointing” news. CCCC formed in 2009, but did not start becoming active until their screening of the debunked Gasland film.  Shortly after they formed, horizontal drilling and hydraulic fracturing started to boom in Carroll County, thanks to unprecedented investment in the county by Chesapeake Energy, which at the time predicted that Ohio’s shale formation could be game-changer, and it has been. Chesapeake drilled its first shale well in 2011 but really started picking up steam into 2012. By 2013, Ohio hit a landmark of 1,000 permits for Utica shale drilling, with Carroll County doubling any other county in the state at 352 permits. Chesapeake Energy remains the No. 1 driller in Ohio’s Utica Shale today with 1,473 producing Utica wells, 300 wells that have been drilled and another 458 that have been permitted. For a visualization of the incredible development that has taken place in Carroll County, check out this production map from Drilling Edge . During the same period of time, Carroll County Concerned Citizens have hosted misinformation machine FracTracker and numerous other activists, held a Data Collection Day and participated in study after study attempting to link to air and water issues to drilling (to no avail). Case-in-point, take a look at the timeline of CCCC’s meetings and the content of those meetings: CCC Event Date CCC Launched 2009 Gasland Filming 2010 FracTracker Presentation 2012 Julie Weatherington-Rice, PHD -recruits for retracted UC air study 2012 FracTracker Presentation 2013 Data Collection Day 2013 CCC’s Legal Team Meets 2013 Activist Deborah Lowden, MD 2012 UC Groundwater Study Phase 1-results and recruitment 2013 UC Air Study-recruitment 2014 Anti-Fracking Listening Project Recruitment 2014 Anti-Fracking Listening Project Results 2014 Activist Julie-Weatherington-Rice, PHD 2014 Activist Ray Biersdorfer, PHD 2015 FracTracker Presentation 2015 Anti-Fracking Sierra Club Presentation 2015 Activist Teresa Mills Presentation 2015 UC Air Study-Initial results 2015 Local Control/Community Bill Of Rights Presentation 2015 UC Groundwater Study Multi-Year Results 2016   After spending years chasing its tails trying to find a solution in search of problem, it appears that CCCC have given up altogether as there has been zero activity from this group in months. In fact, over the past year the group has not posted any new content on its website, held meetings, or recruited volunteers for fracking studies. Perhaps it’s because the people who live and work in Carroll County are keenly aware that the oil and gas industry has brought incredible benefits to their community while still preserving the breathtaking environment in their rural area. Or, perhaps the uneducated and skeptical small group of “concerned citizens” that have been the target of an activist roadshow of fearmongering have now had their concerns put to bed, as the studies they’ve supported have clearly shown fracking has not impacted groundwater or air quality in their region. In any event, the fact that this group has been radio silent after UC’s study results clearly indicates that they have given up on finding fault with fracking. http://everythingshale.com/news/2017/january/06/ohio-anti-fracking-group-quietly-dismantles-after-disappointing-study-results/ http://everythingshale.com/news/2017/january/06/ohio-anti-fracking-group-quietly-dismantles-after-disappointing-study-results/ Fri, 06 January 2017 17:42:15 http://everythingshale.com/news/2017/january/06/soae-2017-an-energy-vision-for-today-and-tomorrow/ The Twitter-sphere did a good job reflecting many of the key messages from API's annual State of American Energy event in Washington. Start with the fact that America's oil and natural gas companies are driving the U.S. economy with increased production and refining operations: There were reminders of the energy sector's potential for putting millions of Americans to work: A dominant theme was the need for industry, government and others to work together to benefit U.S. consumers: Others: pragmatic solution-finding, transcending partisanship in Washington, the American public's support for robust domestic energy production. And more, all emanating from API's annual report (see also the report's pullout infographic ) and in keynote remarks by API President and CEO Jack Gerard . (Click here for event archived video .) Gerard underscored the basic need of a modern society for secure, reliable energy: Energy is fundamental to our society. From the electricity that lights our homes and powers our appliances, to the fuel that keeps our vehicles running, to the chemicals that make modern medicine possible the (API) report demonstrates the countless ways energy is essential to modern society, with oil and natural gas as the foundation.†Securing that energy in a safe and responsible manner is industry's primary goal. Thanks to domestic production that has made the United States the world's leading oil and natural gas producer , its modern refining capacity and a vast infrastructure network, Americans are realizing energy cost savings , U.S. manufacturers are more competitive globally and our country has a growing opportunity to export affordable and abundant energy to help improve the standard of living for millions around the world. Gerard: We have a once-in-a-generation opportunity to find solutions for many of today's most pressing issues, including creating middle class jobs, tackling income inequality, ensuring sustained affordable energy for consumers and enhancing our national security. … Today, many of the planet's most vulnerable people lack access to clean, affordable and reliable energy. The International Energy Agency estimates that more than 1.2 billion people around the world currently lack access to electricity. Further, 2.6 billion live with inadequate cooking facilities, which lead to, among other things, chronic health issues. Abundant and affordable American natural gas will be key to providing access to a reliable and cleaner burning fuel to cook their meals and heat their homes.†Gerard said the U.S. has been transformed from a passive consumer on the world energy stage to a leader in only a decade's time.†America's energy success has included emissions reductions from electricity generation, disproving an old assumption that energy and economic growth must be accompanied by a dirtier environment. Largely due to increased use of cleaner-burning natural gas, much of it produced from shale with hydraulic fracturing, carbon emissions from power generation during the first six months of 2016 were at their lowest point in 25 years. Going forward, America's energy renaissance will be helped by a commonsense approach to regulation and an increased focus in Washington on making American energy work for Americans. Gerard: We must reexamine the regulatory onslaught of the last few years that has proposed or imposed some 145 regulations and other executive actions on our industry and instead work to implement smart energy regulations that are focused on the consumer, help to grow our economy, protect workers and continue to improve the environment. It is our view that regulations that do not align with those basic and commonsense goals should be reexamined, revised or removed to make way for smarter and forward-looking energy policies.†Americans support this approach. Election-night polling showed voters believe more domestic oil and natural gas production will boost the economy and strengthen U.S. energy security. There's strong backing for infrastructure development and a national energy policy. Energy and the need to secure it for America's future is the means to close Washington's partisan divide . Gerard: Few other issues enjoy energy's level of bipartisan support, and energy remains one of the few that bridge the ideological divide between Democrats and Republicans. Our goal is to broaden that common consensus to spur our lawmakers to harness the American voters' embrace of energy policies that drive economic growth, lower consumer costs, continue current environmental improvement, increase American competitiveness and provide our allies with a reliable partner that uses its considerable energy resources as a way to lift people up.†Ultimately, as Gerard noted, oil and natural gas are key to Americans' modern way of life , which makes the energy conversation vitally important: Ultimately, the very foundational nature of oil and natural gas as a source of electricity, fuel and feedstock for everyday products makes the national energy policy discussion more than a collection of abstract policy positions. It makes it a discussion about what's best for American workers, consumers, families and environment; truly energy is everything. As we look to the future, the oil and natural gas industry stands ready to offer solutions that help meet the energy needs of our nation and the world and to work with elected leaders at all levels of government to ensure that the American consumer continues to benefit from affordable and reliable domestic energy.†By Mark Green  Originally posted January 4 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/06/soae-2017-an-energy-vision-for-today-and-tomorrow/ http://everythingshale.com/news/2017/january/06/soae-2017-an-energy-vision-for-today-and-tomorrow/ Fri, 06 January 2017 15:00:26 http://everythingshale.com/news/2017/january/06/rethinking-the-wtigold-ratio-as-oil-fundamentals-change/ Maybe it’s time to scrap these oil vs. gold comparisons. It’s possible the historic relationship has collapsed into a new normal, and anybody trading an arbitrage expecting a return to the old norm might have a long, long wait. We first took a year-end look at the spread between oil and gold several years ago, because they had long been seen as having a relationship that, over time, would drive them toward a standard ratio. Both were widely traded, were seen as storehouses of value, and were often the place to run to when geopolitics got nasty. And their ratio of 15 — one ounce of gold could be exchanged for about 15 barrels of oil — seemed pretty consistent over time. If it was far from that, it could be viewed as a signal that something was going to have to give. Note: We have always used WTI as the basis for the oil price, because the data goes back further than that of Brent. That was a problem for those years when the Brent/WTI spread blew out, but a more normal relationship between those two benchmarks now mostly negates that impact. Consider: In 2014, the ratio of WTI/gold, until the very end of the year, was never wider than 2 percentage points relative to 15, on either side. With the exception of a few days, you can say the same for 2013. The average ratio for the first 20 years of our data — from 1984 through 2003 — was 17.34; that is, an ounce of gold fetched 17.34 barrels of oil. The average since then is 14.99, almost exactly at the conventional wisdom of what the ratio should be. The ratio has averaged 18.08 since the day in July 2008 when oil hit an all-time high. The ratio that day, incidentally, was 6.43. The all-time low was 6.17 on August 30, 2005, when gold was all the way down to about $430/oz. and oil was just under $70. In the last two years, it’s like a new world. The average ratio for 2016 was 29.54, following a 2015 ratio of 24.18 . The 2016 average includes a period from the start of the year through early April when oil stayed steady around $35-$36 while gold surged from $1,080 per ounce to almost $1,220, boosting the ratio from 30.19 at the start of the year to 33.85. That included several days above 40, the first time in the history of our series we’ve seen that. By the end of 2016, oil prices had risen off their sub-$30 lows, while gold — moving toward the norm of 15 — declined to less than $1,150/oz. That brought the ratio down to 21.58 by the end of the year, still 6.58 percentage points above the norm that maybe isn’t a norm anymore. Perspective: If gold held at $1,150, oil would need to get to at least $77 before the ratio would return to 15. Oil’s fundamentals have changed for the foreseeable future because of the shale revolution. A possible analogy from the past: the shale revolution first hit natural gas, and its price plummeted relative to oil. A lot of traders figured the spread between the two would return to “normal” levels, and traded accordingly. They lost a lot of money. At the start of 2007, the price of a barrel of WTI was about 9 times the price of a thousand cubic feet of natural gas. It crossed double digits in the middle of that year, and  has not been single digits since. It was about 30 a few times in 2013, and averaged 17 in 2016. Meanwhile, flight to safety and a concern about inflation, which at one time had both seemed to always involved going long gold, now is targeted at other assets; that can be seen in part in the surge of the dollar. A strong dollar is bearish for both oil and gold, but clearly not at the same rate. That’s why an oil/gold ratio of 15 might be an old norm, and not returning soon. The post Rethinking the WTI/gold ratio as oil fundamentals change appeared first on The Barrel Blog . http://everythingshale.com/news/2017/january/06/rethinking-the-wtigold-ratio-as-oil-fundamentals-change/ http://everythingshale.com/news/2017/january/06/rethinking-the-wtigold-ratio-as-oil-fundamentals-change/ Fri, 06 January 2017 05:01:27 http://everythingshale.com/news/2017/january/05/uk-regulator-activists-fracking-claims-not-backed-up-by-evidence/ The United Kingdom’s Advertising Standards Authority (ASA) — an independent regulator charged with preventing misleading, harmful and/or offensive advertisements — came to an informal ruling this week that the anti-fracking group, Friends of the Earth (FOE), released leaflets that could not be backed up by evidence. While we don’t enjoy seeing government suppressing free speech (and are thankful we live in a country where that’s prohibited — usually ), we can’t help but notice a bigger issue here: the lack of evidence that underpins the entire anti-fracking campaign, domestic and abroad. Interestingly, these misleading and unsubstantiated claims by FOE regarding health impacts, drinking water, asthma and property values just happen to be remarkably similar to claims regularly made by U.S. anti-fracking activists, as the all-too-familiar examples on the following image from the leaflet shows. FOE was given one year to produce evidence of the above claims, but failed to do so. As a result, ASA reached an agreement with FOE that the group could no longer make such claims against fracking “ in the absence of adequate evidence .” ASA CEO Guy Parker explained the decision further : “So let me be clear. We told Friends of the Earth that based on the evidence we’d seen, claims it made in its anti-fracking leaflet or claims with the same meaning cannot be repeated, and asked for an assurance that they wouldn’t be. Friends of the Earth gave us an assurance to that effect. Unless the evidence changes, that means it mustn’t repeat in ads claims about the effects of fracking on the health of local populations, drinking water or property prices.” FOE has agreed to the terms that it must “not make claims about the likely effects of fracking on the health of local populations, drinking water, or property prices in the absence of adequate evidence,” and that its leaflet “must not appear again in its current form.” Francis Egan, CEO of Cuadrilla Resources, the company that, along with two other individuals, challenged the FOE leaflet, said in a press release : “After many attempts by Friends of the Earth to delay this decision, the charity’s admission that all of the claims it made, that we complained about, were false should hopefully put a stop to it misleading the UK public on fracking. Friends of the Earth’s repeated falsehoods have been exposed as nothing more than scaremongering designed to frighten the public into giving it money. It is the unacceptable face of the charity sector.” Additionally, FOE even attempted to use studies and anecdotal stories from the United States in its defense of the leaflet. But ASA rejected the so-called evidence presented over the course of a year because of the differing regulatory framework in the U.K., and the inconclusive and anecdotal nature of the examples given by FOE. To illustrate how similar the false claims from FOE are to those made by U.S.-based anti-fracking groups, here are the FOE claims and ASA responses as they appeared in the London Times , as well as nearly identical claims made by American anti-fracking groups. Activist Claim: Fracking contaminates drinking water FOE language: Fracking fluid containing “a toxic cocktail of chemicals . . . could end up in your drinking water.” U.S.-based Food & Water Watch language: Fracking involves “millions of gallons of toxic fracking fluid” and fracking “harms our drinking water.” ASA response: “Public Health England considered the potential impact on public drinking water supplies was minimal. The Environment Agency would not permit the use of hazardous substances . . . where they might enter groundwater.” FACT: In addition to Public Health England’s assessment of the impacts, the U.S. Environmental Protection Agency (EPA) also recently released its five year study of groundwater impacts from fracking and found that “ the overall incidence of impacts is low .” The EPA report also l ooked at 497 spill reports from the fracking fluid chemical mixing process — which occurs when the fracturing crew prepares the water-based solution for delivery into the formation — and found “ no documented impacts to groundwater ” from those spills, as the following chart from the report illustrates, So even when chemicals on site have been spilled, it’s not impacting groundwater sources for the millions of Americans that live near hydraulically fractured wells. In fact the report found that the median spill rate of hydraulic fracturing fluid is just 2.6 per every 100 wells, and also provided proper context regarding fracking fluid concentrations, “Once chemicals are mixed with the base fluid to form the hydraulic fracturing fluid, the chemical is diluted to much lower concentrations, which has the potential for a less severe impact.” The EPA report also clearly states that upward migration of fracking fluid from depth through fractures into water tables is highly unlikely, if not impossible, “…due to the very low permeabilities of shale formations; this means that hydraulic fracturing operations are unlikely to generate sufficient pressure to drive fluids into shallow drinking water zones.” Activist Claim: Fracking causes cancer FOE language: “Studies have shown that 25 percent of fracking chemicals could cause cancer .” U.S.-Based Natural Resources Defense Council language : “… many of the 1,000-plus chemicals used in fracking are harmful to human health — some are known to cause cancer .” ASA Response: “We understood that hazardous chemicals would not be permitted in fracking in the UK, and that chemicals approved for use must not cause pollution.” FACT: Fracking opponents often suggest the mere p resence of chemicals linked to cancer in fracking fluid pose a threat. This willful misrepresentation of reality ignores the fact that dose and exposure levels are the most relevant factors in determining the risk posed by a substance linked to cancer. Fact is, literally everything we encounter on a day-to-day basis contains something that is carcinogenic on some level . Castor beans contain ricin, almonds contain cyanide, formaldehyde naturally occurs in apples and benzene can be found in shampoo, just to name a few examples. So in short, dose matters . That said, chemical concentrations in fracking fluid are very low, and the public is not exposed either. Fracking fluid is typically 99.5 percent water and sand, while the remaining 0.5 percent is made up of additives. According to a recent EPA report of more than 38,000 disclosures to FracFocus, the maximum concentration of all additives was less than one percent and the median maximum fracking fluid concentration was 0.43 percent by mass. Activist Claim: Fracking is increasing asthma hospitalization rates. FOE language: “A hospital near a US fracking site has shown that asthma rates are three times higher than average.” Sierra Club language : Fracking has left kids “ struggling with asthma .” ASA Response: “The review on which FoE had based the claim . . . did not demonstrate that the fracking site was responsible for increases in asthma.” FACT: As ASA accurately notes and Reuters rightly reported regarding the Johns Hopkins University study being referenced, “ The study doesn’t prove fracking causes asthma or makes symptoms worse .” Not only were researchers from Johns Hopkins University actually unable to link asthma hospitalizations to nearby shale development in Pennsylvania’s Marcellus Shale, but data released shortly after the study by the Pa. Department of Health (PADOH) showed that heavily-drilled counties within the study area have far lower age-adjusted rates of asthma hospitalizations than nine counties in the study area that have no shale gas production at all. This can be seen in the following chart from the PADOH report: In fact, the Pennsylvania Department of Environmental Protection has released data showing emissions rates of criteria pollutants known to exacerbate asthma symptoms dropping as shale development has increased, as the following EID infographic shows: Activist Claim: Fracking is negatively impacting the housing market FOE language: Fracking causes “plummeting house prices.” Earthworks’ language: “Fracking in residential areas impacts the property value of both lease owners and their neighbors.” ASA Response: Evidence was not robust and included a survey of estate agents that was “anecdotal and did not indicate a rapid and significant fall.” FACT: A  recent study from researchers at the Massachusetts Institute of Technology (MIT), Princeton University, the University of Chicago and the National Bureau of Economic Research (NBER) provides evidence that anti-fracking activists’ frequent claims that shale development is lowering home values simply is simply not true in the United States. From the study : “The estimates indicate that median and mean housing values for owner-occupied homes increased by 5.7 percent due to fracing. Further, the median price of mobile homes increased by almost 8 percent.” The study continues: “Overall, we conclude that the initiation of fracing led to meaningful increases in housing prices in counties especially amenable to fracing, relative to other counties in the same shale play.” (emphasis added) EID research in 2015 had similar findings, as the following infographic demonstrates: Conclusion In this case at least, citizens of the United Kingdom will be receiving one less misleading bit of information from a group that isn’t going to let a little thing called facts stand in their way of stopping needed and economically beneficial development. http://everythingshale.com/news/2017/january/05/uk-regulator-activists-fracking-claims-not-backed-up-by-evidence/ http://everythingshale.com/news/2017/january/05/uk-regulator-activists-fracking-claims-not-backed-up-by-evidence/ Thu, 05 January 2017 23:00:24 http://everythingshale.com/news/2017/january/05/api-report-finds-state-of-american-energy-remains-remarkable-and-the-best-may-be-yet-to-come/ The American Petroleum Institute (API) presented the findings of its 2017 State of American Energy report to policymakers and industry experts Wednesday at its annual State of American Energy address. And the key takeaway from both the address and the report is that while the state of American energy remains remarkable, the best could be yet to come — so long as the incoming administration adopts pro-energy policies and alleviates regulatory burdens that have impeded the industry’s full potential in recent years. API President and CEO Jack Gerard’s keynote address focused on the fact that energy is fundamental to how we operate as a society at any given hour of the average day or night (see graphic below), and noted it will be the incoming administration’s duty to ensure the safe, reliable and consumer-friendly production and delivery of oil and natural energy to the American people moving forward. According to the report, 80 percent of Americans support increased energy infrastructure development. With this in mind, Gerard emphasized it would behoove the Trump administration to take seriously the needs of the country’s pipelines and roads, making oil production and transport safer and more efficient. Gerard made it known that one of the biggest hurdles with the last administration was overregulation of the energy industry, and he was not shy to point out his contempt for government overreach and the “Keep It In The Ground” (KIITG) agenda — particularly its stated goal of stopping infrastructure projects in 2017: “ We need to expand energy infrastructure to keep pace with our new energy reality and to deliver affordable energy to families and businesses,” Gerard said. “But government decisions and red tape are obstructing energy infrastructure projects and the good jobs they create. Even for projects that have successfully completed exhaustive approval processes. Eight out of 10 voters support increased development of our country’s energy infrastructure, but a small, vocal minority have taken it upon themselves to target these projects to advance their anti-fossil fuel political agenda. By attempting to restrain private investment in energy infrastructure they are preventing creation of millions of jobs and promoting increased energy costs for millions of Americans .” The State of Energy Today The new API report notes that the 21 st century energy revolution has come as a result of more efficient and effective energy production and refining. Advances in technology — specifically hydraulic fracturing and horizontal drilling — have positively impacted the lives of Americans over the last decade, driving down costs and creating a cleaner environment. From the report: “ According to a 2016 estimate from AAA, America’s drivers, on average, saved more than $550 on gasoline in 2015 due to increased production from hydraulic fracturing and horizontal drilling. And an analysis by EIA shows that since 2008, roughly the start of the energy renaissance, average annual energy costs per household in the United States have dropped by more than 14 percent. ” (p. 8) On the flipside, while Americans have been afforded an increase in consumer-friendly energy, many developing nations still struggle to do the same. American leadership could help propel billions of people living without reliable electricity and adequate cooking facilities into more modern dwellings. From the report: “ The International Energy Agency estimates that more than 1.2 billion people, or 14 percent of the world’s population, lack access to electricity, and twice that many, 2.6 billion, live without clean cooking facilities. In fact, according to a 2013 study in The Lancet, roughly 3.5 million people, mostly women and children, die every year from respiratory illness as a result of indoor air pollution created by wood and other biomass stoves .” (p. 8) And as Gerard pointed out in his address, fossil fuels will continue to lay the foundation for the world’s energy needs. According to EIA projections , worldwide energy consumption will increase 48 percent by 2010, largely due to opportunities in developing nations, and 78 percent of this demand will be met with fossil fuels, as the following graphic from the report illustrates. Transforming Energy for Tomorrow API’s 2017 report also outlines ways for us to move forward. As the U.S. has proven over the last decade, increased energy production and consumption does not necessarily mean increased environmental impacts. Time and time again the energy industry has disproven myths and assumptions about the negative impacts of fossil fuels, and fortunately, Americans do not have to choose between an abundant energy supply and a clean environment. Even as energy production has significantly increased, air pollutants — particularly criteria pollutants such as nitrogen oxide and sulfur dioxide — have decreased dramatically due to increased natural gas use for electrical generation, as have greenhouse gas emissions (p. 18) as the following graphic from the report shows. So, after having to endure an administration that kept the industry’s hands tied with some 145 regulations, API is looking forward to collaborating with a new president and Congress, and believes it is high time that America start to embrace its potential position as a global leader in energy production. From the report: “Unlike their predecessors of just a few years ago, (the new administration) will inherit a country that leads the world in energy production with a growing population, an expanding economy and a cleaner environment, thanks to natural gas and its impact on declining emissions of criteria air pollutants. The natural gas industry has supplied the growth in natural gas use that fueled the expanding economy and made these emissions reductions possible, all while reducing its own emissions.” As the following charts from the report illustrate, the U.S. has managed to increase crude oil production 88 percent and natural gas production 46 percent over the past decade despite a challenging and often duplicative regulatory environment. America also has the opportunity to expand its reach by way of energy exports. The API report concludes, “In 2014, the number of nations buying American crude oil was eight. In 2016, after export restrictions were lifted, that number rose to 22” (p. 36). In addition, over the next five years, the United States is projected to become the world’s third-largest LNG supplier. According to API, “LNG exports could contribute up to 452,000 jobs nationwide between 2016 and 2035 and up to $73.6 billion annually to the GDP (p. 38),” further substantiating the case for the country’s need to continue moving forward making robust strides in this industry. Imagine what these numbers could be if more regulations were lifted and processes were simplified. The API report clearly shows that America is well positioned to lead amongst international competitors, so long as the new administration ensures we transform the energy and natural oil industry back into a consumer-friendly market. http://everythingshale.com/news/2017/january/05/api-report-finds-state-of-american-energy-remains-remarkable-and-the-best-may-be-yet-to-come/ http://everythingshale.com/news/2017/january/05/api-report-finds-state-of-american-energy-remains-remarkable-and-the-best-may-be-yet-to-come/ Thu, 05 January 2017 19:29:48 http://everythingshale.com/news/2017/january/05/weekly-petroleum-status-report-152017/ US crude oil stocks decreased by 7.1 MMBbl last week. Gasoline and distillate inventories increased by 8.3 MMBbl and 10.1 MMBbl respectively. Yesterday afternoon, API had reported a crude oil withdrawal of 7.4 MMBbl. Analysts had expected a much smaller crude oil withdrawal of 2.2 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted a build of 6.1 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be up 4 MBbl/d from last week per EIA’s estimate. Imports were down 984 MBbl/d last week to an average of 7.2 MMBbl/d. Refinery inputs averaged 16.7 MMBbl/d (132 MBbl/d more than last week), leading to a utilization rate of 92.0%. The main reason for the crude oil withdrawal was the sharply lower imports and higher refinery inputs. The petroleum stocks report may seem bullish at first glance, as the crude oil withdrawal was much larger than analyst expectations. However, the build in refined petroleum products more than offset this withdrawal and sent total petroleum inventories numbers climbing, leading to a bearish result. Crude oil prices remain largely unchanged this morning, with prompt month WTI prices up $0.05/Bbl, trading at $53.31/Bbl at the time of writing. WTI prices have been trading in the $50-55/Bbl range for the past couple of weeks as the market is weighing the bullish proposed production cut from OPEC and non-OPEC producers vs. the bearish upside that mid-$50/Bbl crude prices provide for US production potential. In bullish news, a Reuters survey showed this morning that OPEC supply fell in December to 34.18 MMBbl/d from 34.38 MMBbl/d during the prior month. However, even at this lower production level, OPEC continues to pump 1.68 MMBbl/d above the 32.5 MMBbl/d quota. The biggest production decline came from Nigeria during this time frame due largely to an attack on a pipeline that stopped Forcados exports. Meanwhile, the largest output increase was from Libya (70 MBbl/d). Iraq and Iran were both pumping higher volumes as well. It is important to remember that Libya and Nigeria are exempt from the cuts and Iran had a higher quota than their current production level. Until definitive data from the countries involved in the cuts show up in late January the market will remain skeptical about the prospects of a successful cut. Drillinginfo expects only partial compliance. The ceiling for WTI is still set at mid-$50/Bbl price levels as those prices would incentivize further production growth in the US. Drillinginfo expects prices to stay rangebound between $50-$55/Bbl as any moves outside of the range will be driven by solid data regarding the success of the production cuts. Please find the updated DrillingInfo charts on the link below: Petroleum Stocks Chart http://everythingshale.com/news/2017/january/05/weekly-petroleum-status-report-152017/ http://everythingshale.com/news/2017/january/05/weekly-petroleum-status-report-152017/ Thu, 05 January 2017 17:17:26 http://everythingshale.com/news/2017/january/05/gas-price-declines-continue-following-lower-than-expected-draw/ The EIA announced a 49 Bcf withdrawal for the week ended Dec. 30. The draw was significantly below market expectations and lower than any available forecast. The market was expecting a draw of 82 Bcf with the full range of forecasts ahead of the release -61 to -135. The 49 Bcf draw is also lower than the 98 Bcf draw reported last year and the 5-year average of 107 Bcf. The smaller-than-expected storage withdrawal took prices down further, 6-7 cents this morning after declines that started last week. During the past week, February contract has lost about 70 cents, from about $3.90 per MMBtu on Dec. 28 to $3.20 this morning as weather forecasts are trending warmer overall. Working gas storage inventories dropped to 3.311 Tcf, level 21 Bcf below the 5-year average and 364 Bcf below last year and 5-year high. See Drillinginfo EIA’s chart below. Next week’s storage report is expected to be another strong withdrawal of 3 digit as cold temperatures returned this week. Market players are focused now on the longer trend and with the cold fading prices have been under pressure. From a fundamentals perspective: – Production levels remain low. The year 2016 didn’t see any growth in production for the first time in many years and current levels are showing no sign of that changing. Prices are also not high enough to incentivize significant drilling. – Demand has been extremely volatile this winter so far with record high and low withdrawals and the market is struggling to get a clean picture, but even with normal or weak demand this winter, Res/Com demand will have an increase year-on-year. – Power demand has also come in strong this winter, which indicates summer power burn will be stronger than most expectations. – LNG and Mexican exports will see growth year-on-year as well with additional infrastructure coming online. Drillinginfo still expects prices to rise as inventories are back to normal levels and with demand growth outpacing production growth in 2017 compared to 2016. End-of-winter inventories will play a key role as they will start low at about 1.8-1.9 Tcf, putting additional upward pressure on prices. http://everythingshale.com/news/2017/january/05/gas-price-declines-continue-following-lower-than-expected-draw/ http://everythingshale.com/news/2017/january/05/gas-price-declines-continue-following-lower-than-expected-draw/ Thu, 05 January 2017 16:39:59 http://everythingshale.com/news/2017/january/05/kerry-s-speech-some-continuity-some-disconnect/ The secretary’s latest remarks beg the question: at a time when Israelis and Palestinians are clearly unable to strike a grand deal, why not put ideology aside, jettison the administration’s all-or-nothing approach, and lay out more modest parameters on settlements, incitement, and other concrete issues? In the waning days of the Obama administration, Secretary of State John Kerry has delivered a valedictory speech on the Middle East peace process. His December 29 address — which sternly critiqued Israel, urging it to end the slide toward a one-state solution — included six principles to guide Israeli-Palestinian peacemaking and ultimately reach a two-state solution. Kerry defended his speech as a need to tell tough truths about what Israel must do to retain its Jewish and democratic character. Yet Prime Minister Binyamin Netanyahu attacked it as “unbalanced,” saying Israel does not need to be “lectured to” by foreign leaders. Given the anger Israelis have expressed over the U.S. abstention on UN Security Council Resolution 2334 and their expectations about the incoming Trump presidency, Netanyahu seems bent on lashing out at the Obama administration with greater intensity than ever. The speech’s timing, ambitious tone, and controversial nature could have manifold implications for U.S. policy and Washington’s relations with Israel. At this point, however, it seems most useful to focus on the core negotiating principles that Kerry laid out, comparing them with the parameters laid out by past administrations. WHAT IS NEW IN THE SPEECH? Kerry’s speech was the coda to the third major U.S. effort this century to jumpstart a negotiating drive and end the Israeli-Palestinian conflict. In July 2000, President Bill Clinton held a Camp David summit with both parties, culminating in the Clinton Parameters that December. Similar efforts were launched by Secretary of State Condoleezza Rice in 2007-2008 and by Kerry himself in 2013-2014. Some will argue that the latest speech has little relevance because President-elect Donald Trump has made clear that his views on the matter differ sharply from Obama’s. Yet the Clinton Parameters have remained the baseline for negotiators since 2000, through very different administrations, so Kerry’s ideas could have a longer-term domestic and international impact than some might expect. Indeed, analysts will invariably compare Kerry’s principles to Clinton’s. Other reference points are relevant as well — such as Obama’s speeches on the subject in May 2011, and George W. Bush’s letter to Ariel Sharon in April 2004 — though they do not address all of the core issues in the comprehensive manner that Kerry and Clinton did. Both men delivered their principles amid a sense that they would not be realized anytime soon; in fact, Clinton explicitly noted that his parameters would expire when he left office. Yet there are key differences in both context and substance. In Clinton’s case, he outlined his principles after almost eight years of high-level and seemingly promising Israeli-Palestinian negotiations aimed at achieving a final-status agreement. Kerry’s speech follows eight years of hardly any direct, senior talks on endgame issues, though the Obama administration has done a great deal of heavy lifting on the matter, especially during Kerry’s intense diplomatic drive of 2013-2014. Thus, while the Kerry and Clinton parameters are more similar than different, there are important differences: Jewish state. Kerry explicitly called for recognizing that Israel “is a state for the Jewish people” that will exist alongside “a state for the Palestinian people,” without derogating the rights of Israeli Arabs. Clinton did not emphasize such language, presumably because Palestinian public questioning of Israel’s Jewish character was not as intense at the time. President Obama explicitly called for recognition of Israel as a Jewish state in his May 2011 speeches, as did President Bush. Jerusalem. Kerry’s speech called for “Jerusalem as the internationally recognized capital for the two states.” This marks the first time that the United States has publicly called for a Palestinian capital in Jerusalem, though he did not delineate whether it would constitute all of East Jerusalem or select Arab neighborhoods around the Old City; the future of the Old City itself was not specified either. In contrast, the Clinton Parameters gave details about sovereignty on the Temple Mount but did not say whether the Palestinians would have a capital in the city (though he did mention the idea of two capitals in a January 2001 speech days before leaving office). Obama did not mention East Jerusalem in his 2011 speeches, apparently seeing the issue as too controversial to broach on the eve of his reelection campaign. Refugees. Kerry stated that any resolution of the Palestinian refugee problem would have to be consistent with the idea of “two states for two peoples,” suggesting that future proposals must not threaten Israel’s Jewish character. This language is more restrictive than the Palestinian public position of unlimited “right of return” to Israel, but not restrictive enough for Israel, which wants all refugees to settle in a Palestinian state or third countries instead, likely with international and Israeli financial compensation. Obama did not address the idea of refugees at all in 2011. Clinton provided a very detailed menu of options on refugees, all of them “consistent with the two-state solution.” Bush said it was not realistic to believe that refugees would return to Israel, noting that they should go to the Palestinian state. Borders. The Clinton Parameters stated that Israelis and Palestinians would need to agree on territorial exchanges, indicating that these swaps would not be calculated from a baseline of 100 percent of the West Bank. Obama also called for land swaps, though using the pre-1967 boundaries as a baseline. Kerry’s speech essentially said that all territorial exchanges would be conducted on a one-to-one ratio, using the language “mutually agreed equivalent swaps.” This language falls just short of the Palestinian formulation of “equal” swaps, which gets into more technical issues such as land quality. Bush’s letter to Sharon accepted the idea of Israel ultimately incorporating the “major population centers” (i.e., settlement blocs) near the “1949 Armistice lines” (almost identical to the pre-1967 lines), adding that a final deal would require “mutually agreed changes that reflect these realities.” Israel interprets the Bush letter as allowing construction in those blocs before a peace deal is reached, but this is not what the letter actually states. Security. While speaking extensively about Israel’s security threats, Kerry declared that “fully ending the occupation is the fundamental issue for the Palestinians. They need to know that the military occupation itself will fully end.” Clinton, whose efforts preceded the full force of the second Palestinian intifada and the more recent Arab Spring, favored a specific timetable for the withdrawal of Israeli forces and called for international troops to take their place. Kerry did not mention international troops or a timeline, though he suggested that Palestinians should be given a general sense of when they can expect the last Israeli troops to leave. Given the region’s current instability, Netanyahu has made clear that Israel does not plan to leave the Jordan Valley for decades, if at all. Kerry did say that a Palestinian state would need to be “non-militarized,” as other U.S. administrations have made clear. End of conflict. In noting that the parties should seek to “end the conflict and all outstanding claims,” Kerry’s speech suggested that ties between Israel and Arab states would not be normalized until the end of the process. This principle is in keeping with the Arab Peace Initiative first proposed by Saudi Arabia in 2002 (the API also indicated that Israel must concede the Golan Heights to Syria as a further precondition for normalization, though nobody believes this is possible or even desirable today given the situation there). In addition, Kerry stated that Israel-Palestinian peace would lead to a new “security partnership” with Arab states. Israel already has burgeoning (though quiet) security ties with some of these states, so perhaps Kerry meant that these ties could be formalized. WHY NOW? Only time will tell what motivated the timing of Kerry’s speech. Some have argued that putting these ideas out just as the administration is leaving office is merely a parting shot at Netanyahu after a long period of strained relations, though that interpretation seems highly uncharitable. Alternatively, the speech may have been intended as a preamble to the international peace conference scheduled to be held in Paris on January 15. Israel will boycott that summit, so the few dozen foreign ministers in attendance could decide to cut-and-paste Kerry’s parameters into a UN Security Council resolution just before Trump is inaugurated on January 20. Israel would furiously reject such a move as an imposed solution, and the Palestinians might not embrace it either given its presumed mention of a Jewish state. Would the United States abstain from such a resolution? Kerry has stated that Washington does not want to impose solutions, and the White House has said it will not vote in favor of any Security Council measure that does so. In practice, however, a U.S. abstention would be the same as a yea vote, so Kerry’s speech may not be the last word in this closing-act drama. For example, Netanyahu’s anger at the speech — coupled with the adoption of Resolution 2334 and other potential UN moves — could spur him to ask Trump for a demonstrative post-inauguration step that shifts the situation in a very visible way, such as moving the U.S. embassy to Jerusalem. A more neutral interpretation of Kerry’s timing is that the administration did not view past opportunities to lay out its parameters as truly viable. Some say the president should have done so in April 2014, when the last round of negotiations collapsed, but Washington was enmeshed in major crises elsewhere at the time (Crimea, the Islamic State, etc.). Domestic political considerations should not be excluded either, since declaring peace parameters before or during the presidential election season could have been viewed as a political liability to any Democratic candidate. THE ALL-OR-NOTHING APPROACH HAS FAILED Kerry expended a lot of time and passion in explaining how Israel’s settlement activity is impeding a two-state solution, even after saying that it is not the biggest impediment to peace. (He did not say what the main impediment is, though he cited Hamas rejectionism and Palestinian terrorism and incitement as major problems.) His speech was most compelling when it critiqued Israeli construction in settlements outside the West Bank security barrier, pointing out that approximately 90,000 Israelis now live in such areas. Yet such points beg the question: at a time when roughly 75 percent of Israeli settlers live inside the barrier, and the vast majority of Palestinians live outside the barrier, and neither side is remotely willing to make the necessary compromises for a grand deal, why not adjust U.S. policy accordingly? For example, Kerry could have emphasized the more modest objective of convincing Israel not to build in the 92 percent of the West Bank that lies outside the barrier — a good first step toward aligning its settlement policy with the two-state model . At the same time, he could have called for concrete steps to end Palestinian incitement, such as closing the foundation that gives aid to families of suicide bombers. Although both of these measures are far more modest than grand parameters, they at least offer the possibility of making incremental progress toward two states. For too much of the past eight years, the Obama administration has pursued an all-or-nothing approach. Although Kerry favored more limited ideas in recent years (e.g., enabling Palestinian economic access to areas outside the barrier), he offered no real payoff to Israel in terms of differentiating between settlements. The answer seems to be a more flexible approach that applies different principles to certain Israeli settlement blocs inside the barrier — particularly those that Palestinian president Mahmoud Abbas himself has previously indicated would become part of Israel under an eventual peace agreement. The White House’s strained ties with Netanyahu are probably the main reason why the administration has continued its maximalist approach. Obama may have wanted to avoid distinguishing between settlements for ideological reasons. Although his 2011 speeches made clear that a final deal would require Israeli annexation of certain settlements, his day-to-day policy did not reflect this principle — perhaps due to suspicions that Netanyahu would never truly enforce a differentiation between settlements inside and outside the barrier. Such mistrust is no doubt rooted in Israel’s use of controversial construction loopholes during the 2009-2010 settlement freeze. Yet these suspicions do no change the bottom line: a more modest, pragmatic approach was worth trying because it at least offered a chance of stopping the ominous one-state slide that Kerry warned of. To be fair, Israel needs some introspection on this matter just as much as Washington. Perhaps Netanyahu’s coalition would have allowed a more differentiated approach to settlements if he and other figures had been more willing to take certain political risks. Such an approach could have decoupled settler ideology from Israel’s core concern about guaranteeing security in and around the West Bank so long as the Middle East remains in its current state of chaos. Israel also needs to answer for its continued construction outside the barrier and its tilt toward one-state outcomes. CONCLUSION Kerry’s speech reflected the belief that Israel must take concrete steps toward a two-state solution if it wants to remain the democratic nation-state of the Jewish people. Yet his remarks leave a crucial question unanswered: since the United States and other countries have obviously concluded that the current Israeli and Palestinian leadership is incapable of reaching a grand deal, why not pursue a more pragmatic approach that at least maintains the viability of the two-state model until conditions become more favorable for final-status peacemaking? This is a question better asked of President Obama than Secretary Kerry. David Makovsky is the Ziegler Distinguished Fellow and director of the Project on the Middle East Peace Process at The Washington Institute. In 2013-2014, he worked in the Office of the U.S. Secretary of State, serving as a senior advisor to the Special Envoy for Israeli-Palestinian Negotiations. Originally Posted on December 29, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/05/kerry-s-speech-some-continuity-some-disconnect/ http://everythingshale.com/news/2017/january/05/kerry-s-speech-some-continuity-some-disconnect/ Thu, 05 January 2017 15:00:07 http://everythingshale.com/news/2017/january/05/us-ports-prime-themselves-for-expected-uptick-in-petchem-exports/ The world’s second-largest petrochemical port in Houston may command 75% of all US polyethylene exports, but expected growth in international shipments as a slew of new ethane crackers and associated derivative units start coming online this year has US ports a thousand miles or more away gearing up to nab a piece of the action. Last month Georgia’s Port of Savannah increased its ship-to-shore crane total to 26 — one more than the 25 at the Port of Houston’s Bayport and Barbour’s Cut terminals — with the arrival of four new post-Panamax cranes that cost about $15 million each. Resin packagers and distributors, such as New Jersey-based A&R Bulk-Pak and Mobile, Alabama-based SeaPac Inc.,  are setting up operations at or near the Port of Charleston in South Carolina. The Port of New Orleans also is adding post-Panamax cranes, resin packaging capacity and taking empty containers from Memphis shipped via barge on the Mississippi River to add loading capacity for exporters. Barge companies and container services also are working to position equipment at like-minded ports. A view of the Port of Houston’s Bayport terminal from its administration building. The Bayport terminal opened in 2007 and is adding wharf and dock space in anticipation of increased business, much of that involving petrochemical exports. Photo by Kristen Hays. In 2015 Seacor AMH started moving containers on barges on the Tennessee-Tombigbee Waterway, which connects the Tennessee River to Alabama’s Tombigbee River that empties into Mobile Bay, home to the Port of Mobile. Nearly a year ago the company started providing the same service between Baton Rouge and the Port of New Orleans, largely to ease trucking bottlenecks that complicate current polyvinyl chloride (PVC) exports and accommodate expected export growth. Resin is a “huge part of our conversations” about growth, Port of New Orleans director of marketing Janine Mansour said at a recent energy conference in Houston. Increasingly, petrochemical industry players from shippers to port officials to logistics companies say the Port of Houston’s chemical traffic is congested. The largest US petrochemical port includes the 52-mile Houston Ship Channel, home to the second-largest petrochemical complex in the world and second only to Rotterdam in the Netherlands. Traders and shipbrokers expect congestion — and costly holdups — to increase as more ships compete for berths and battle inefficiencies. Traffic has already increased. US PE exports rose 22.6% in 2015 compared to 2014, according to American Chemistry Council data, and 2016 is expected to surpass 2015’s total. Brian Wyly, director of global logistics for Ascend Performance Materials, a Houston-based chemical, fiber and plastics manufacturer and supplier, said challenges include getting the right container to the right berth at the right time and aligning port and plant operating hours. He said Ascend has been shipping “heavy volume” out of New Orleans and Mobile, thanks to moving empty containers via barge to those ports. “That is actually our strategy — to go to uncongested ports,” Wyly said. A $15 million ship-to-shore crane loads packed containers bound for exports on a ship on Dec. 19, 2016, at the Port of Houston’s Bayport terminal. Photo by Kristen Hays. John Moseley, senior director of trade development for the Port of Houston, bristles at suggestions that the port is congested. He said during a recent tour of the port’s container terminals that they are ready for the next resin export wave, with wharf and crane upgrades and dock additions in progress, a new resin packaging facility slated to open by the end of 2017, expansion of port gate hours this summer and room to expand rail operations. 1. Empty containers stacked at the Port of Houston’s Bayport terminal on Dec. 19, 2016, awaiting export cargoes to be loaded. Empties can have seven containers per stack, while loaded container stacks stop at four. Photo by Kristen Hays. He said the port has 8,000 to 10,000 empty containers on site, ready to be loaded, at any given time. A sharp 30% to 40% bump in import volume in the summer of 2015, when a labor strike idled much activity at otherwise bustling Los Angeles and Long Beach ports in California, had “no impact on our lines,” Moseley said. “When you have a Wal-Mart or an Exxon here, they’re not going to accept anything less than perfection in your operations,” he said, referring to Exxon’s Baytown and Mont Belvieu chemical manufacturing and Wal-Mart’s 4.2 million square-foot distribution center in Baytown. Congested or not, Houston’s proximity to 40% of US petrochemical capacity is an obvious advantage. According to US Customs, the Port of Houston handled 75% of all waterborne polyethylene exports in 2015. Los Angeles/Long Beach came in second at 10%, followed by New Orleans at 7%, and the rest in Freeport, Texas, New York and elsewhere. “Freight will always find the most cost effective way to move,” Moseley noted. Still, competitors expect their efforts to bear at least some fruit. “We understand the first choice will be the closest port when it comes to exports,” said Greg Van Brunt, regional sales manager of trade development for the Georgia Port Authority. “But there will come a time when it reaches critical mass and others can step in.” The post US ports prime themselves for expected uptick in petchem exports appeared first on The Barrel Blog . http://everythingshale.com/news/2017/january/05/us-ports-prime-themselves-for-expected-uptick-in-petchem-exports/ http://everythingshale.com/news/2017/january/05/us-ports-prime-themselves-for-expected-uptick-in-petchem-exports/ Thu, 05 January 2017 05:01:35 http://everythingshale.com/news/2017/january/04/us-gasoline-flows-may-shift-as-new-environmental-rules-take-effect/ It’s essential for a daily fixture of life in the United States — a morning commute for many working Americans — and for transportation of basic goods in the US. The US is dependent on gasoline for nearly every aspect of transportation, but the hard reality for the country’s drivers is that its refiners don’t produce near enough to meet demand. Government data shows we now consume about 9.3 million b/d of gasoline nationwide. To offset the shortfall, the US imports about 710,000 b/d of gasoline — more than two cargo ships per day. But new environmental rules that took effect at the beginning of the year may encourage US refiners to send additional gasoline outside the United States. In addition, many European refiners who send their excess gasoline to the US may instead be sending additional product to West Africa and Latin America. The US government now requires finished gasoline to average 10 ppm sulfur, from the previous average of 30 ppm. Refiners, both foreign and domestic, must average 10 ppm sulfur or buy credits to offset the difference. The new rule has caused a lot of uncertainty in the gasoline market and many believe it will divert imports that normally come here while encouraging US refiners to send their product elsewhere. At the moment, most Atlantic Coast gasoline traders consider the arbitrage from Europe closed and say it will likely stay that way until the distribution chain dips further into its stocks. Thomas Finlon, director of Energy Analytics Group, said the new sulfur requirements for gasoline in the United States are causing uncertainty about the cost to remove sulfur to meet new environmental regulations. “A lot of refineries are having a hard time with it,” he said. Many US refineries are running high sulfur crude slates, which makes it difficult to produce gasoline that meets the new sulfur specifications. Although many of those refineries have hydrotreaters in place to reduce sulfur, that process can be expensive, he said. “This jump downward to 10 ppm is difficult and costly. That is the reason why gasoline inventories are not building,” he said, adding that gasoline inventories normally grow this time of year. US Energy Information Administration data showed total gasoline stocks fell 1.6 million barrels to 227.1 million barrels for the week ending December 23. In addition, he said the increase in gasoline exports to Mexico and other parts of Latin America stems in part from the difficulty and expense of meeting the lower sulfur requirements. Latin America currently allows higher sulfur content in its gasoline supply. “It’s easier to send it out than to keep it in,” he said of the current gasoline production in the US. For European refiners wanting to export, it may be easier to send product to Latin America rather than to the US Atlantic Coast. With the possibility of greater gasoline exports, the US market may become more dependent on imports to make up the shortfall. Currently, more than 88% of US imports go into the US Atlantic Coast, the largest market for fuel in the US and one which is structurally short. Atlantic Coast refiners do not produce near enough to meet the demand of the region’s drivers. As a result, the region imports supplies from Europe and Canada. European refiners produce more gasoline than the region needs, and OCED Europe exports about 1 million b/d, or one third of its gasoline production. But long-term gasoline export markets for European refiners are shrinking. While the flow of gasoline occurs naturally from Europe into the US Atlantic Coast, it’s not a steady stream of product. Instead, trade ebbs and flows with supply and demand on both sides of the Atlantic. The average is about 710,000 b/d, but there are wide fluctuations from week to week. The highest import mark over the last year was over a million b/d on September 30 and the low was 415,000 b/d on March 18. A large portion of that flow of gasoline is from a European refiner directly to its retail outlets in the US. Another portion is from one European exporter to a US importer and is based on long-term supply contracts. Neither of those enter the spot market in the US. But the third and most volatile component of US gasoline imports come through arbitrage shipments, one-off shipments that occur when the spot price of gasoline in the US is high enough to offset the cost of buying an incremental cargo of European gasoline and shipping it to the US. The difference in price on both sides of the Atlantic needs to be wide enough to pay for shipping and RINS, a second important cost for importers. Import data released weekly from the EIA can show when an arbitrage is open and when it is closed and when there are significant infrastructure problems within the US. Gasoline imports into the US surged in the weeks after the Colonial Pipeline shut down the flow of products following a leak in late September and a fire a few weeks later. In each case, Atlantic Coast gasoline distributors were starved for supply; stocks plunged and weekly imports surged to make up for the shortfall. However, most gasoline  analysts consider that weekly report backward-looking information. “An increase in last week’s imports shows someone saw an arbitrage opportunity three weeks ago. It says nothing about what happens now,” one gasoline trader said. The post US gasoline flows may shift as new environmental rules take effect appeared first on The Barrel Blog . http://everythingshale.com/news/2017/january/04/us-gasoline-flows-may-shift-as-new-environmental-rules-take-effect/ http://everythingshale.com/news/2017/january/04/us-gasoline-flows-may-shift-as-new-environmental-rules-take-effect/ Wed, 04 January 2017 17:57:06 http://everythingshale.com/news/2017/january/04/state-of-american-energy-2017/ With a new administration and Congress arriving in Washington, we'll be watching to see how American energy's next chapter unfolds the policy choices and actions that largely will determine the path for our country's energy future in terms of resource access , infrastructure and other issues. American Petroleum Institute President and CEO Jack Gerard will kick off the year's energy policy conversation by outlining a number of top energy priorities during a speech Wednesday at API's 2017 State of American Energy event. Gerard's speech will outline policy approaches that will let the U.S. capitalize on a generational opportunity to develop abundant energy reserves to benefit consumers , the economy and the environment . Gerard also will likely point out that American energy is common ground for action in Washington which U.S. voters broadly supported in November's elections . Click on this link at noon Wednesday for a live webcast of the event. By Mark Green  Originally posted January 3 , 2017 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/04/state-of-american-energy-2017/ http://everythingshale.com/news/2017/january/04/state-of-american-energy-2017/ Wed, 04 January 2017 15:00:30 http://everythingshale.com/news/2017/january/03/weeks-after-admitting-they-paid-for-exxonknew-narrative-rockefellers-now-deny-it/ Lee Wasserman, Director of the Rockefeller Family Fund, has changed his story again in a new op-ed in the Los Angeles Times , now claiming that his organization had no involvement in the Columbia School of Journalism’s anti-Exxon stories. This comes less than a month after his op-ed in the New York Review of Books where he admitted to paying the Columbia journalists to specifically target Exxon. For Wasserman’s LA Times op-ed, the editor notes , “The [Rockefeller Family] Fund has made grants to the Columbia Journalism School’s Energy and Environment Reporting Project and InsideClimate News, but has no involvement in articles they produce.” But in the December 8 th issue of NY Review of Books , Wasserman wrote , “With help from other public charities and foundations, including the Rockefeller Brothers Fund (RBF), we paid for a team of independent reporters from Columbia University’s Graduate School of Journalism to try to determine what Exxon and other US oil companies had really known about climate science, and when. Such an investigation seemed promising because Exxon, in particular , has been a leader in the movement to deny the facts of climate change.” (emphasis added) Wasserman is trying to have it both ways depending on whatever best suits the argument he’s trying to make at that moment.  One moment he takes credit for the anti-Exxon “journalism” his organization paid for, and the next he feigns innocence as an impartial supporter of investigative reporting. Wasserman has been a central actor in the #ExxonKnew campaign. His organization is funding every component of the coordinated assault on Exxon, paying for research papers, buying media coverage, and funding activists who drum up attention and outrage against the company. The Rockefeller Family Fund and Wasserman also played host to a secret strategy meeting in January 2016, where the activists they have bankrolled, including representatives from 350.org, Greenpeace, and the Conservation Law Foundation, met to brainstorm how “to establish in public’s mind that Exxon is a corrupt institution,” “delegitimize them as a political actor,” and “force officials to disassociate themselves from Exxon.” Wasserman also seems intent on leading the Rockefeller Family Fund against the wishes of the Rockefeller family . After Wasserman’s confession in the NY Review of Books , Rockefeller heiress Ariana Rockefeller went on CBS This Morning to set the record straight. “These family funds do not speak on behalf of all 200 family members,” she said. “I don’t think denouncing a family legacy is the best way to go about doing this.” The LA Times has served as the mouthpiece of the Rockefellers for more than a year now. They published the original Columbia School of Journalism stories last fall. They followed those with an op-ed by Neva Rockefeller Goodwin , a former Rockefeller Brothers Fund trustee who is at the forefront of the effort to drive divestment from fossil fuel companies. The LA Times has also published two editorials calling for investigations of Exxon, with the most recent editorial running less than a week ago. And now they’ve published this latest piece of propaganda from Wasserman. The LA Times does seem to have learned one lesson – they finally disclosed their financial connection to the Rockefellers at the end of Wasserman’s op-ed. Every other #ExxonKnew piece the outlet has published has, at least initially, failed to disclose that their reporting on Exxon was funded by the Rockefellers. http://everythingshale.com/news/2017/january/03/weeks-after-admitting-they-paid-for-exxonknew-narrative-rockefellers-now-deny-it/ http://everythingshale.com/news/2017/january/03/weeks-after-admitting-they-paid-for-exxonknew-narrative-rockefellers-now-deny-it/ Tue, 03 January 2017 19:44:16 http://everythingshale.com/news/2017/january/03/the-week-ahead-for-crude-oil-gas-and-ngls-markets-01032017/ CRUDE OIL Crude oil inventories increased 0.6 MMBbl last week according to the EIA. Gasoline and distillate inventories decreased by 1.6 MMBbl and 1.9 MMBbl respectively. Total petroleum inventories posted a substantial decline of 12.9 MMBbl. The increase in crude oil inventories was higher than analyst expectations, which sent a bearish signal to the market. However, the build in crude oil was more than offset by the refined product withdrawals, which led to a neutral environment for trade during the lighter volume holiday trade. WTI traded within a $1.34/Bbl range last week and stayed well within the $50-$55/Bbl range that has been established since OPEC agreed on quotas at the end of November. Due to the light trade heading into the new year, there was no significant changes to trader’s positions according to the most recent CFTC report. Market participants continue to wait for fundamental data (expected later this month) to understand whether the OPEC and non-OPEC producer quotas are being properly enforced. This data will be the key to breaking out of the current range. If data seems to confirm the production cuts, prices will continue their march up towards the $60/Bbl mark. Any data that could suggesting non-compliance, on the other hand, could push prices back to the high $40/Bbl level. Until the data is available, Drillinginfo expects the WTI price range to remain intact.   NATURAL GAS Natural gas production increased 1.3 Bcf/d last week to 71.8 Bcf.d as some of the freeze-off losses returned with the warmer temperatures. The warmer weather also reduced the need for Canadian supplies as they dropped 800 MMcf/day compared with the week before. On the demand side, the warmer temperatures pushed Res/com demand down 11.3 Bcf/day and pushed power demand down another 6.3 Bcf/day week-on-week. Demand should rebound in the coming week as temperatures are expected to decline significantly. Cold weather levels similar to those endured in the 3rd week of December are expected to return in the coming 6-10 day period. In the 11+ day period, forecasts are currently calling for warmer temps. This type of back and forth temperature pattern is consistent with a weak to non-existent La Nina pattern. The storage report last week was a little above expectations at a 237 Bcf withdrawal. This week’s storage report is expected to be relatively weak (either side of 70), while next week’s report should return to normal withdrawal level (normal for this week in the year). Inventories are now below the 5-year average and well below last year levels. Prices action was bullish with the expiration of the January contract but the gains could not be held as the Feb contract took over as prompt and quickly declined nearly $0.20/MMBtu on the last two days of the year. This week’s forecasts may support the cash market early this week but the forecasts are trending warmer further out which will limit gains. The recent trend for the NYMEX price action has been to focus on the longer term forecasts which will pressure prices near term. In addition to weather, another factor that may hold prices down are the long positions accumulated by the speculative community. Should the forecast updates continue to trend warmer into the late part of January, these positions will have to be addressed. With the current forecast, another 200+ withdrawal is likely coming in a couple of weeks but additional changes will need to occur later in the forecast period to bring significant support for higher prices. DrillingInfo has been calling for a rise in prices to facilitate additional investment in drilling rigs. To date, the price action in the summer and fall 2017 has not reached levels necessary to incentivize additional gas-directed drilling, despite significant demand growth expectations for this year. Higher prices may take time to develop (stretching into late Jan and Feb), as the market tightens up expectations around the end-of-March storage levels and reconciles that against growing demand needs.   NATURAL GAS LIQUIDS Propane inventories decreased 5.7 MMBbl last week as reported by the EIA, marking a fifth consecutive withdrawal. The withdrawals have been driven by the cold weather. Propane stocks now sit at 86.9 MMBbl, roughly 10.7 MMBbl lower than this time last year. However, propane stocks are still well above the five-year average of 61 MMBbl for this time of year prior to 2015 (before the price crash). Butanes/Natural Gasoline: Normal butane prices continued to be above natural gasoline prices through most of the week, but then lowered to normal levels (natural gasoline above normal butane) toward the end of the week. The higher price was attributed to short covering by a couple of major players in the market. DrillingInfo expects normal butane prices to stay below natural gasoline moving forward. http://everythingshale.com/news/2017/january/03/the-week-ahead-for-crude-oil-gas-and-ngls-markets-01032017/ http://everythingshale.com/news/2017/january/03/the-week-ahead-for-crude-oil-gas-and-ngls-markets-01032017/ Tue, 03 January 2017 16:28:34 http://everythingshale.com/news/2017/january/03/gasoline-futures-surge-12-in-december-to-new-high/ The gasoline futures contract traded on the New York Mercantile Exchange surged 12% in December, with reformulated blendstock for oxygenate blending futures establishing a new calendar year high for 2016 at $1.7038 gallon between the Christmas and New Year’s Day holidays. Gasoline futures outpaced the advance by West Texas Intermediate and ULSD futures in December which both rallied 9%, as bullish sentiment took control of the market. Spurring the market’s bullish psychology were agreements to reduce production by the Organization of the Petroleum Exporting Countries on November 30 joined by a companion pact on December 10 when 11 non-OPEC producing countries also agreed to cut output. Combined, the two agreements call for a 1.758 million bpd cut in production that, if adhered to, would push global oil demand over production midyear, according to several analysts including the International Energy Agency. The agreements took effect January 1 and are for six-month terms, although country commitments call for an average at the quota level to be reached by June, so some production cuts might not start right away. This feature could puzzle analysts during the interim as they scrutinize monthly production data for compliance, likely sparking increased price volatility. Noncommercial traders, also known as speculators since they are not using a futures contract to underpin a physical position in the underlying market, covered short positions and accumulated long positions in NYMEX RBOB futures in reaction to the November 30 agreement. A long position is taken on expectation prices would move higher over time. A rebalancing market will still need to contend with an abundant quantity of oil in inventory. However, the production cuts would gradually chop down the mountain of supply that has grown over the past couple of years and, in turn, underpin a higher global oil price. This expectation was lent support late in 2016 on a string of data suggesting a quicker expansion of the US economy in 2017, with the Bureau of Economic Analysis in late December reporting a 3.5% annualized growth rate in US gross domestic product for the third quarter 2016–the largest quarterly expansion in two years. Greater economic activity consumes more oil. The US Federal Reserve lifted the federal funds rate in December for only the second time in 10 years on evidence it finds supporting a stronger US economy that, in large part, propelled the US dollar to a 14-year high. Consumer confidence in the United States reached a12-year high in December, with a new administration in Washington, DC, seen creating broader economic opportunity. A confident consumer is willing to spend more of his or her hard earned currency which bodes well for fuel retailers. As we look at RBOB futures forward curve, we see an increasing premium built into gasoline prices in early 2017 which reach the mid to upper $1.80 gallon range in April, May and June. Climbing gasoline prices could erect a speed bump to higher sales volume for retailers and suppliers alike in 2017 should demand slow, as witnessed in in late 2016. Although implied gasoline demand set a record high in 2016, demand slowed late in the fourth quarter against the comparable year-ago period as gasoline prices gained. EIA data shows during the four-week period ended December 23, gasoline supplied to market averaged 9.045 million bpd that, while a strong reading, trailed the same four weeks in 2015 by 260,000 bpd or 2.8%. For the year through December 23, implied gasoline demand averaged 9.367 million bpd, up 211,000 bpd or 2.3% against 2015. The US average for regular grade gasoline sold at retail outlets reached a six-month high of $2.364 gallon on December 26, according to EIA data, 32.5cts above year prior. The lower price point in late 2015 was seen incentivizing demand. In a recent note to clients, Tim Evans, futures specialist with Citi Futures, highlighted gasoline demand’s response to prices, saying, a decline in gasoline prices in 2015 lent support to demand with growth up as much as 3.4% in the 12 months ended in September 2015. “Since then we’ve seen a slowing to 2.0% growth in the 12 months through September 2016. Looking ahead to next year,” said Evans on December 22, “we would not be surprised if growth slows to something more like 1.0-1.5%, a more sustainable pace in our view.” Gasoline exports from the United States, which are included in the products supplied statistic, surged in 2016, reaching a weekly record high of 1.1149 million bpd in late December. Moreover, the trend looks sustainable, as US refineries produce more gasoline than needed by the domestic market amid the country’s oil and gas renaissance. Much of those exports have been shipped to Mexico, where growing domestic consumption joined refinery constraints and outages to spur the demand for US barrels. Mexico is gradually liberalizing its gasoline market, including on imports, which would aid US refineries that are producing well above their historical average. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market , click here .   The post Gasoline Futures Surge 12% in December to New High appeared first on Schneider Electric Blog . http://everythingshale.com/news/2017/january/03/gasoline-futures-surge-12-in-december-to-new-high/ http://everythingshale.com/news/2017/january/03/gasoline-futures-surge-12-in-december-to-new-high/ Tue, 03 January 2017 16:04:19 http://everythingshale.com/news/2017/january/03/why-pennsylvania-is-moving-forward-to-reduce-methane-pollution/ Recently the Pennsylvania Department of Environmental Protection (DEP) took   an important first step to implement new requirements aimed at reducing methane emissions from new oil and gas operations. Methane is the main component of natural gas 51% of Pennsylvania households depend on it to fuel their homes. The more methane is wasted, the less there is to deliver to the PA communities that depend on it. Methane pollution is a focus for Governor Wolf and the DEP for a number of reasons. Scientists estimate that methane is responsible for 25% of the man-made climate impact we experience today. The majority of methane emissions come from the oil and gas industry. As the second largest producer of natural gas in the nation, Pennsylvania has a duty to operate in a responsible and efficient manner by reducing its waste of this valuable domestic resource. In the Keystone State alone, oil and gas companies waste an appalling 100,000 tons of methane every year . When less methane is delivered to the pipeline, that means lost revenue and less benefit to local economies. Last year alone Pennsylvania's oil and gas producers allowed some $14 million worth of a valuable domestic energy resource to escape into the atmosphere, despite the fact that numerous analyses have shown industry can reduce up to 40% of methane emissions by implementing cost-effective technologies on the market today. Besides contributing to climate change and resulting in massive energy waste, industry's methane emissions have other implications for Pennsylvania communities. Air pollution from oil and gas facilities can contain toxic air pollutants like benzene a known carcinogen and other volatile organic compounds that exacerbate an already hazardous smog problem in many parts of the state. Once in place, DEP's efforts will reduce methane pollution from new facilities. However, more action is necessary to have any sort of real impact on reducing the massive amount of methane coming from the more than 100,000 active oil and gas facilities across the state. Governor Wolf has committed to taking action to reduce methane from these existing sources of methane emissions. If Pennsylvania's leaders care about the economy, smart business, and the safety and security of Pennsylvania residents and communities, they should protect and defend cost-effective, common sense policies that can make the industry cleaner and more competitive. By Andrew Williams  Originally Published on December 21, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/03/why-pennsylvania-is-moving-forward-to-reduce-methane-pollution/ http://everythingshale.com/news/2017/january/03/why-pennsylvania-is-moving-forward-to-reduce-methane-pollution/ Tue, 03 January 2017 15:00:37 http://everythingshale.com/news/2017/january/02/energy-department-transfers-land-to-city-of-oak-ridge-as-the-community-focuses-on-future-economic-development/ U.S. Energy Secretary Ernest Moniz, U.S. Congressman Chuck Fleischmann and City of Oak Ridge Mayor Warren Gooch formalized an agreement to transfer the Department of Energy's (DOE) American Museum of Science and Energy (AMSE) building, along with its 17.12-acres, to the City of Oak Ridge. In exchange, DOE will receive space from the City in order to continue its public education and outreach efforts. These educational efforts are focused on recognizing the long-standing partnership between the Department and the City of Oak Ridge. From the Manhattan Project of World War II to the cutting-edge materials research of today, Oak Ridge has long played a vital role in American science and security,†said Energy Secretary Ernest Moniz. This agreement will ensure that Oak Ridge’s history is preserved and shared while providing the city a new opportunity to create jobs and strengthen the local economy.†“A solution to transfer DOE property in the heart of our city has been one that has eluded the leadership of Oak Ridge for over 16 years, but it is now a great example of local and federal government working together as partners to achieve success,†said Oak Ridge Mayor Warren Gooch. This transfer creates a “win-win” for the community and DOE, by allowing new, modern facilities of public education and outreach to tell our historical story and the future of science and discovery.†It's an exciting time to join DOE in celebrating one of several key land transfers in the City of Oak Ridge. This transferal will enable the community to effectively tell the story of men and women who have worked to protect our country during times of war and peace. Throughout my time in Congress I have worked very hard to get government-held property transferred back to Oak Ridge as well as Anderson and Roane counties in order to benefit my constituents,†said Congressman Fleischmann. Also, I would like to thank Secretary Moniz for his dedication and strong support for the ‘Secret City' over the last several years.†DOE first opened AMSE at its current location in 1975, as the successor to the American Museum of Atomic Energy which was initially established by the federal government in 1949, to showcase work classified for The Manhattan Project during World War II. Today the museum is managed by UT-Battelle, DOE's management and operating contractor at Oak Ridge National Laboratory (ORNL), and attracts about 65,000 visitors annually. The site currently serves as the starting point for DOE's Public Bus Tours which include ORNL's Graphite Reactor, the Y-12 National Security Complex, and the former K-25 site (now East Tennessee Technology Park). When the transfer is completed DOE will save more than $2 million in long-term maintenance and operating expenses, and will receive new space to continue its public education and outreach efforts focused on Oak Ridge history, modern science, and national security. Transfer of the ownership and management of the property, and its surrounding federal land, to Oak Ridge allows for the city to explore future innovative development and economic stimulus opportunities. In exchange, the City of Oak Ridge will provide 18,000 square feet of space for 15 years to the federal government at no cost in rent, utilities, or maintenance. The occupancy agreement allows for DOE to continue to operate AMSE in its current location for 365 days while new space is being prepared. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2017/january/02/energy-department-transfers-land-to-city-of-oak-ridge-as-the-community-focuses-on-future-economic-development/ http://everythingshale.com/news/2017/january/02/energy-department-transfers-land-to-city-of-oak-ridge-as-the-community-focuses-on-future-economic-development/ Mon, 02 January 2017 19:00:15 http://everythingshale.com/news/2016/december/30/will-the-us-s-wto-agriculture-challenge-against-china-land-it-in-hot-water/ Apparently borrowing a page from the Trump playbook, the outgoing Obama administration filed a new trade enforcement action with the World Trade Organization against China earlier this month, alleging that the country has not met its market access commitments to the WTO for rice, wheat and corn. The challenge at the WTO is the second such complaint by the Obama administration on behalf of the US farmers and marks “…the 15th time that the Obama administration has launched a trade enforcement challenge against the Chinese government at the WTO since 2009,” says a statement posted on the Office of the United States Trade Representative. Specifically, the United States is challenging the tariff-rate quotas (TRQs) for rice, corn and wheat enforced by the Chinese government, adding that China’s “market price support” for these products is almost $100 billion in excess of China’s committed levels during its accession to the WTO. A TRQ is a trade policy tool that is used by a government to protect a domestically produced commodity or product from competitive imports. China’s drive for food self-sufficiency China has a policy of supporting its farmers through price floor subsidies for commodities like corn, wheat and rice. The price support policy evolved more than a decade ago, as the Chinese government’s response to increased demand for food and grains from its own population, which caused China to import oil and grains in record quantities. As the Chinese government sought to improve its food security, the subsidies boosted prices of domestically produced grains way above international price levels, and dramatically expanded acreage dedicated to the cultivation of the subsidized grains. As an example, wheat production in China improved by 35.7% to 95 million mt in a span of 10 years since 2006. The minimum support price for domestic wheat purchases commenced in 2006 and the TRQ for wheat in 2016 remains unchanged from 2015 at around 9.63 million mt. As with other grains, the bulk of this wheat, around 90%, is purchased by the state players, COFCO and Sinograin, while only about 10% goes to private buyers. The minimum support price for wheat is set at Yuan 2,360($339.52)/mt, and has been unchanged for the past four years. Chinese traders claim that only 30% of the TRQ for wheat has been utilized, but the country has also imported some wheat outside the TRQ. An import tax of 55% is imposed on purchases made outside the TRQ system. In some cases, however, there has been excessive price support, and in the case of corn, it led to oversupply of inventory estimated at $200-250 million mt in late 2015. The Chinese government responded to corn stockpiling problem by discontinuing its corn subsidies in March this year, which led to a sharp reduction in acreage under corn cultivation. However, the Chinese government’s active interest in and guidance of agri-policies is exemplified by these words from a press conference held on May 5 by the Information Office of the Ministry of Agriculture. “Our plans for this year are firstly, we expect to reduce corn planting area by at least 1.33 mil hectares. Secondly, the soybean planting acreage is expected to increase more than 0.4 mil hectares. Thirdly, increase the planting for more demanded grain variety and lastly, planting for rice, wheat and other grain rations will remain stable.” And while there is no longer an official corn support price, Chinese traders say that an unofficial price floor of about Yuan 1,400/mt, encouraged by the Chinese government, still exists to keep the farmers supported. Factors at play  It is an unspoken fact that the Chinese government is going to fight tooth and nail to retain sovereignty over its food security — as would a lot of other nations. So what does the US action at the WTO achieve (other than winning plaudits from a decidedly skeptical electorate)? If the US pursues an aggressive trade rebalancing agenda with China, which looks very possible, given the initial tweets coming in from the Trump camp, it could bring China back to the negotiating table. Getting China to reconsider its trade positions, could lay the field wide open for rebalancing on issues as diverse as the Yuan-US dollar exchange rate, or Chinese steel exports to the US. However, it should be noted that in 2015, China was the second largest international destination for US agri-exports, according to the USDA website, with exports to China having grown more than 200% in the past decade. Agriculture Secretary Tom Vilsack has also acknowledged in a statement that, “Through tariff cuts and the removal of other trade barriers, China has gone from a $2-billion-a-year market for U.S. agricultural products to a $20-billion-plus market.” Annoying such an important trade partner, especially one that imports so much agri-produce from the US, may, therefore, not be such a great idea. A Trump-led future of US foreign policy and trade may make for a more Dali-esque set of negotiations with China. Also not to be taken lightly would be raising China’s need for “maintaining face,” which may even cloud more rational policy decisions, in the path of American hectoring. It is strongly to be hoped that the path of gaining share in the agri-market and enriching the US worker may eventually not work to the detriment of the US farmer. China can be expected to fight its case strongly at the WTO. The only response to the US action was a tersely worded statement posted on China’s Ministry of Commerce website on December 16, which said that the Chinese administration of TRQs was in line with WTO rules; that the Chinese regretted the US action and would handle the dispute at the WTO. The Chinese government has handled the Twitter provocations from Mr. Trump with relative outward calm. But the recent underwater drone incident in the South China Sea points to potentially firmer responses from the Chinese side. The path forward for US-China agri-trade relations is going to be interesting. Suppliers from the Black Sea and South America, among other origins, are already waiting in the wings for any opportunity to tap the Chinese market. The hope is that going back to the negotiating table may expand, rather than reduce, the pie for US-China trade. The post Will the US’s WTO agriculture challenge against China land it in hot water? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/30/will-the-us-s-wto-agriculture-challenge-against-china-land-it-in-hot-water/ http://everythingshale.com/news/2016/december/30/will-the-us-s-wto-agriculture-challenge-against-china-land-it-in-hot-water/ Fri, 30 December 2016 05:01:14 http://everythingshale.com/news/2016/december/29/weekly-petroleum-status-report-122916/ US crude oil stocks increased by 0.6 MMBbl last week. Gasoline and distillate inventories decreased by 1.6 MMBbl and 1.9 MMBbl respectively. Yesterday afternoon, API had reported a crude oil build of 4.2 MMBbl/d. Analysts had expected a crude oil withdrawal of 1.5 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted a sizeable decrease of 12.9 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be down 20 MBbl/d from last week per EIA’s estimate. Imports were down 304 MMBbl/d last week to an average of 8.2 MMBbl/d. Refinery inputs averaged 16.6 MMBbl/d (101 MBbl/d more than last week), leading to a utilization rate of 91.0%. The petroleum stocks report has bullish and bearish factors. On the bearish side, crude oil posted a build, which was against analyst expectations. On the bullish side, total petroleum inventories posted a sizeable decrease, with refined product withdrawals more than offsetting the small crude oil build. Prompt month WTI prices are down $0.17/Bbl, trading at $53.89/Bbl at the time of writing. WTI prices have been trading in the $50-55/Bbl range recently. The market is waiting on data from OPEC and non-OPEC producers to see if they will be able to enforce the quotas or elect to keep pumping at record levels. The market has been optimistic about the production cut so far, causing WTI to post significant gains in the last couple of months. However, if data (which should become available towards the end of next month) does not show adequate implementation of the cuts, the sentiment will swing the other direction. Recent bearish news has capped WTI gains, with additional Libyan production expected to come back online shortly and the rising US rig count which will translate to additional production (albeit with a lag). Drillinginfo expects WTI prices to stay within the $50-55/Bbl range. Until fundamental data can confirm or deny the enforcement of the production cut, prices will struggle to break out of the range. Please find the updated DrillingInfo charts on the link below: Petroleum Stocks Chart http://everythingshale.com/news/2016/december/29/weekly-petroleum-status-report-122916/ http://everythingshale.com/news/2016/december/29/weekly-petroleum-status-report-122916/ Thu, 29 December 2016 18:10:15 http://everythingshale.com/news/2016/december/29/weekly-natural-gas-storage-12292016/ The EIA announced a 237 Bcf withdrawal for the week ended Dec. 23, the largest withdrawal for this week over the past 5 years. The draw was again in the high end of market expectations this week. The full range of forecasts ahead of the release was -198 to -243. The 237 Bcf draw compares to a 50 Bcf draw reported last year and the 5-year average of 80 Bcf. Despite the larger-than-expected draw, the storage report is bearish as prices are down this morning. Prompt month (Feb17) is currently trading down 9 cents to 3.8/MMBtu, at time of writing. Working gas storage inventories dropped to 3.360 Tcf, level 79 Bcf below the 5-year average and 413 Bcf below last year and 5-year high. See Drillinginfo EIA’s chart below. Following this week’s warmth, another cold front is forecasted for the U.S. Today’s losses on prices are likely due to consolidation following yesterday’s run up on expiration of the January contract, but prices are expected to continue to rise as inventories are back to normal levels, production is not growing and higher demand due to cold weather. http://everythingshale.com/news/2016/december/29/weekly-natural-gas-storage-12292016/ http://everythingshale.com/news/2016/december/29/weekly-natural-gas-storage-12292016/ Thu, 29 December 2016 17:10:38 http://everythingshale.com/news/2016/december/29/the-little-things-and-a-lot-of-facts-that-can-promote-oil-output/ Sometimes, it’s the little things. Sometimes, the little thing might be less than six inches long. When the price of oil started falling, everybody wanted to know what the breakeven price was in US shale plays; there seemed to be a general consensus that if you said $70, you’d sound reasonably intelligent. More recently, my colleague Carin Dehne Kiley of S&P Ratings wrote a thorough analysis that said when you figure in natural gas value and average interest expense, the “required wellhead oil price” was $55. There’s been plenty of coverage of how the industry got those numbers down. Some were cyclical and reversible: operating costs dropped as energy costs dropped. Service costs fell also. But Carin’s estimate was that 25% of the drop was sticky, and wouldn’t reverse itself just with higher prices. In an interview I did with Continental Resources CEO Harold Hamm at the Platts Global Energy Forum in early December, Hamm said that sticky figure is probably closer to 50%. Those more permanent changes include workforce reductions, drilling more wells from the same pad, drilling longer laterals and so on. And then there are the smaller things. Bill and Diane Nielsen — spouses who are both executives and metallurgists at Materion Performance Alloys — were part of a team jointly nominated with Hess in the category of Commercial Application of the Year at the Platts Global Energy Awards for a piece of equipment that is less than six inches in length. They had the misfortune of sitting next to me at the awards dinner, and here’s their story (though their efforts didn’t win the coveted prize; the award winners and the full content of Insight magazine, distributed at the dinner, can be found here. ) Materion has an alloy that goes by the name of ToughMet, and it’s a copper-nickel-tin alloy.  But it wasn’t until Bill and Materion brought expertise to it that it could be machined; previously, it only had uses as powder metallurgy. Materion’s first use of the alloy in the oil patch was as a non-magnetic centralizer, a piece of equipment used in directional drilling. Other applications in drilling, aircraft and automotive equipment followed. Meanwhile, Hess — and others —had a problem. The coupling joining sucker rods to other tubing would often fail, particularly in the Bakken. The workover cost after a failure was huge; Diane estimates it at $100,000 per well. Hess was looking for solutions, and turned to Materion. “How this came to be is that there was an engineer we worked with at Hess who is a metallurgical engineer, and he had previously worked at Schlumberger,” Bill said. “So he was very familiar with what the material could do and had used it for a number of applications.” He contacted both Bill and Diane; she shared a Yonkers upbringing with the Hess engineer. Copper and tin together make bronze; that’s good for bearing applications. Copper and nickel together are corrosion resistant. The three of them together were viewed as a possible solution to a problem of metal fracturing in a corrosive environment. Materion needed to, as Bill said, “modify the performance of the material so it could actually survive the field.” “Once we were confident the coupling would survive, Hess started to pick out wells where we were going to put it in the ground,” Diane said. The tests that followed were seen as a success. In a paper Hess and Materion published jointly in World Oil magazine,  the authors said the greater quality of the couplings and the sharp reduction in failures could reduce workover costs by $75,000 per well per year. “The net benefit of one year’s uninterrupted production from a well producing 100 b/d at $40/bbl is $130,000 to $200,000 of pre-tax cash flow, depending on how long the well is typically down for a tubing failure workover,”according to the paper. “The return on investment is high, and the payback is quick.” But that wasn’t all. Bill and Diane laid out other benefits, like reduced friction in the entire artificial lift process, “and there was more oil coming out of the well than ever before.” The increased output ranged from 6% to 25%; they said an average number might be closer to 8%. Then why wouldn’t everybody race to adopt it? For starters, the ToughMet couplings are three times or more the cost of conventional couplings. With companies looking to squeeze costs out of their operations in the face of low oil prices, Bill noted that companies often decided to run through the in-house inventory of steel couplings rather than switch to the more expensive alloy. “And another thing we had to overcome is that a lot of people darkened these companies’ doors with every kind of snake oil solution, and most of them don’t work,” he added. “So that’s why we collected so much data over several years and waited until we had a large amount of facts.” The commercial rollout began after lengthy testing early this year, according to the joint nomination. The customer list, the Nielsens said, is now between 15 and 20 customers. It’s a small number for a small piece of equipment and the amount of production it has put on the market so far remains limited.  But the increased crude oil production in the US from its lows — probably about 350,000 b/d — came to market through a lot of reasons. This was a story about one of them, and it’s just a small part for an industry that is exiting 2016 in a lot better than shape than what might have been predicted coming in. The post The little things—and a lot of facts—that can promote oil output appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/29/the-little-things-and-a-lot-of-facts-that-can-promote-oil-output/ http://everythingshale.com/news/2016/december/29/the-little-things-and-a-lot-of-facts-that-can-promote-oil-output/ Thu, 29 December 2016 05:01:22 http://everythingshale.com/news/2016/december/28/will-trump-try-to-scrap-obama-s-prohibition-on-arctic-atlantic-drilling/ In July 2014, as the Obama administration was really beginning to work through its future plan for offshore oil and gas leasing, the industry was hopeful that the plan would include expanded drilling in nearly all US Gulf of Mexico waters, much of offshore Alaska and even off the East Coast. Some in the industry were quietly optimistic that President Barack Obama’s Interior Department would give serious consideration to opening some of the Pacific Ocean to drilling in the 2017 to 2022 offshore leasing plan, although this was viewed as a serious longshot. “From our long-term energy planning standpoint, both from the government and the industry, it’s important to keep options on the table and not take them off the table,” Erik Milito, the American Petroleum Institute’s upstream director, said at the time. Those hopes were dashed and a years-long push by the offshore industry appears to be for naught as the Obama administration last week not only scrapped planned lease sales in the Atlantic and Arctic, but also moved last week to permanently bar drilling in the majority of US Arctic waters and a large chunk of the Atlantic. The move may ultimately be at the heart of a, likely, multi-year legal battle between the offshore industry and environmentalists. It has complicated President-elect Donald Trump’s ability to increase production in federal waters, one of his few, clear energy policy goals of his presidential campaign. It may also launch a new legislative effort by Alaska’s congressional delegation. But, looking forward, it also raises the question: Will Trump want to burn political capital, federal resources and time to lift an offshore drilling prohibition at a time when the industry is not looking to immediately expand its offshore drilling activities? Withdrawn from disposition On December 20, the White House announced that Obama would permanently block new oil and gas development in the Chukchi and Beaufort seas, covering about 115 million acres in the Arctic, and about 3.8 million acres off the US East Coast, from Massachusetts to Maryland. Canadian Prime Minister Justin Trudeau also announced that all oil and gas leasing would be off limits in all of Canada’s Arctic waters, but those prohibitions would be reviewed every five years. Obama is blocking Arctic and Atlantic drilling through authority under Section 12(a) of the Outer Continental Shelf Lands Act, a 63-year-old law which allows the president to “withdraw from disposition” any unleased lands in federal waters. The decision followed the Obama administration’s announcement in November that it was removing two planned lease sales in the Chukchi and Beaufort seas from its 2017-22 federal offshore leasing plan. A proposed Atlantic lease sale had been scrapped from that plan back in March. President-elect Trump was expected to undo that plan, although it was expected to take years to do so. But Obama’s move to permanently block oil and gas development in the Arctic and Atlantic complicates Trump’s expected path when it comes to opening more US waters to drilling. The legal battle Just minutes after the White House announced the decision to permanently bar drilling, industry interests claimed there was no legal standing to permanently block development in those waters and environmental pledged to defend the action in court. “If Donald Trump tries to reverse President Obama’s withdrawals, he will find himself in court,” said Marissa Knodel, a Friends of the Earth spokeswoman. But Christopher Guith, a senior vice president for policy at the US Chamber of Commerce’s Institute for 21st Century Energy, said the decision could be easily reversed by Trump once he is sworn into office and pointed to a 2008 action by President George W. Bush to reverse previous leasing prohibitions made under 12(a) authority. “There’s no such thing as a permanent withdrawal,” Guith said. “It can be repealed with the stroke of a pen.” The Trump question As with seemingly almost everything on energy policy these days, it is unclear what Trump may do on offshore drilling when he moves into the White House next month. In a conference call with reporters the day after the White House announced the withdrawals, Jason Miller, a Trump spokesman, said the president-elect had no “immediate reaction” to the move. While he has pushed for more drilling on federal lands and waters, it is uncertain if Trump views undoing Obama’s Arctic and Atlantic withdrawals as a priority, particularly since much of the industry appears uninterested in drilling in new offshore areas in light of current oil and gas prices. Prices weighed at least partially on Obama’s decision last week, claiming in a statement that a “significant production in the Arctic will not occur” at current prices. “That’s why looking forward, we must continue to focus on economic empowerment for Arctic communities beyond this one sector,” Obama said. The post Will Trump try to scrap Obama’s prohibition on Arctic, Atlantic drilling? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/28/will-trump-try-to-scrap-obama-s-prohibition-on-arctic-atlantic-drilling/ http://everythingshale.com/news/2016/december/28/will-trump-try-to-scrap-obama-s-prohibition-on-arctic-atlantic-drilling/ Wed, 28 December 2016 05:01:32 http://everythingshale.com/news/2016/december/27/business-continuity-top-issue-for-industrial-power-blog-readers/ Various subject matter experts at Schneider Electric write a lot of blog posts in the course of a year, so as 2016 comes to an end it’s a good time to look back and see which topics most resonated with readers. In terms of the posts published by the Industrial Power group, it’s clear that the topic of business continuity reigned supreme. That certainly makes sense given that downtime is anathema to customers in the industrial space. But business continuity goes beyond merely ensuring the power stays on and machines keep humming. That was clear from our most popular post of the year, Christian Bertrand’s piece titled, “Why You Need a Power Failure Response Strategy.” The post challenges readers to think more broadly about what happens during a power failure in order to come up with an effective strategy for dealing with it. I thought this piece of advice was particularly insightful: “Finally, as you build your strategy, think about how people are going to behave in the various circumstances you predict. While a lot of emergency procedures and processes can be automated at a machine level, unless you’re running a complete lights-out facility, people are going to need to be involved in your power failure response strategy.” People, of course, will behave differently according to the situations they’re in. He encourages companies to come up with emergency response plans and then practice them. That’s a step I’m willing to bet many companies don’t take, which means the first time they try to implement the plan is in the face of an emergency. Not good. Don Strickland’s “5 Keys to Selecting a UPS that Will Ensure Business  Continuity for Critical Industrial Applications” also resonated with readers. Readers love it when an expert can boil down a rather complicated topic to just a few quick points. Strickland does just that, pointing out the key aspects to look for in terms of environmental factors, load profile, energy efficiency, and network integration (and security). He also lists some good questions to ask to ensure your UPS vendor can stand behind its product, namely these:  “How fast can they respond in case of an emergency – and to the exact location that you require? Ask, too, about the range of options available in terms of accessories, including those from third party partners. Extensive safety features are another sign of an experienced UPS vendor, including back feed protection and dead front panels. Multiple energy storage options are also a plus, including not just traditional valve-regulated lead-acid batteries (VRLA) but newer lithium ion batteries, which promise longer life and the same power in a smaller footprint compared to VRLA.” Serge Bernard’s post, “3 Key Steps to Maximizing Uptime for Mission Critical Systems,” is another good example of boiling down a complex topic to digestible bites. The post covers how to ensure uptime for critical systems in the event of a prolonged power outage. He advises readers to conduct a thorough assessment of which systems need to be kept alive, consider regulatory requirements, and to determine how much runtime they’ll need for various systems. As is the case with many Schneider Electric blog posts, he also points readers to valuable sources of additional information, including the free white paper, “Maximizing Uptime in Mission Critical Facilities.” The Industrial Internet of Things (IIoT) was all the rage in 2016 so it’s no surprise that Daniel McGinn’s post, “How to Provide Power Protection in an Industrial Internet of Things Environment,” was popular with readers. The post essentially delivered good news by informing readers they probably don’t need to provide backup power to every single sensor in an IIoT environment. As McGinn writes : “With respect to the IIoT, it is [the] control network and associated intelligent data gathering elements that we are really concerned about protecting. The good news is that this constitutes a much lower level of power compared to the main process power, which makes protecting it with UPS systems far more feasible and worthwhile from a return on investment perspective.” I could go on and on but I’ll leave you with just one more popular post that I thought hit on an important topic, Jeffrey Paquette’s “Predictive Maintenance: A More Strategic Approach to Ensuring UPS Availability.” Drawing on his many years of industry experience, Paquette makes the case that many companies buy expensive equipment, but fail to get the full value from it because they skimp on maintenance. The issue can really come to a head when applied to a UPS that is supposed to provide power protection for an important piece of equipment. Paquette urges readers to consider the consequences if the UPS fails. He points out that the most strategic way to avoid such a fate is to implement a predictive maintenance plan, one that takes advantage of all the diagnostic information that today’s UPSs produce about their own health. As he writes:  “Using tools that collect and analyze this data, you can now predict when a component really is in danger of failing because it’s showing characteristics that are out of the ordinary. Then you can take steps to remedy the situation. It’s a more strategic approach because you’re fixing a real, known problem, not (potentially) wasting money by replacing components just because a schedule says you should.” Those are some of my choices for the top blog posts of 2016. Did I miss any topics that you thought were important in the past year? Or are there any you’d like to see the Industrial Power group cover in the year ahead? Let us know in the comments below. The post Business Continuity: Top Issue for Industrial Power Blog Readers appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/december/27/business-continuity-top-issue-for-industrial-power-blog-readers/ http://everythingshale.com/news/2016/december/27/business-continuity-top-issue-for-industrial-power-blog-readers/ Tue, 27 December 2016 15:52:56 http://everythingshale.com/news/2016/december/27/the-week-ahead-for-crude-oil-gas-and-ngls-markets/ CRUDE OIL Inventory levels for crude oil increased 2.3 MMBbl last week as reported by the EIA. The gasoline and distillate inventories decreased by 1.3 MMBbl and 2.4 MMBbl respectively. Total petroleum inventories showed a substantial decline of 11.9 MMBbl. The larger than anticipated crude oil inventory build was mainly due to increased imports (up 1.1 MMBbl/d), which averaged 8.5 MMBbl/d. The higher than anticipated crude oil build was bearish, but those gains were offset by the bullish gasoline and distillate withdrawals, supporting price during the low volume holiday trade. WTI price action remained in the $50-$55/Bbl range since the OPEC release. With the expiration of the January contract last week and the holidays, crude oil had one of its calmer weeks recently as market participants closed open positions. The commercial short position (producer hedges) is running 53.5% of total open interest currently, according to the CFTC report, signaling that producers are eager to take advantage of the recent uptick in prices. The market continued to weigh bullish and bearish news last week. Bullish: Saudi Arabia, Kuwait, and UAE notified customers that they will be cutting supply in January to fulfill the quotas. Bullish: Russia said that the country’s oil companies have agreed to reduce output collectively sending a signal that they are working towards a successful reduction of their supply as per the joint OPEC and non-OPEC agreement. Bullish: The IEA revised their demand forecast higher by 200 MBbl/d due to revisions to Chinese and Russian consumption numbers. Bearish: Baker Hughes reported 16 additional rigs were added to the domestic fleet. As long as prices on the 2017 forward curve remain in the $50-$55/Bbl range, expect shale producers to expand production programs. Bearish: Iraq has signed new deals with Asian customers despite their commitment to reduce output. Bearish: Libya, which has been exempted from the OPEC quotas, is close to increasing output by 270 MBbl/d after a pipeline that connects major oilfields was put back in service. Libya, which had recently doubled output to 600 MBbl/d, has previously demonstrated its ability to ramp production up to as high as 1.2 MMBbl/d.   Hopes of a successful OPEC and non-OPEC output cut have provided a floor for WTI. Meanwhile, US producers are taking advantage of the higher prices to lock in hedges and ramp up drilling programs in 2017, setting a likely price ceiling on WTI. Until data can confirm or deny the execution and enforcement of the production quotas, Drillinginfo expects prices to remain range bound near current levels. NATURAL GAS Natural gas production fell to levels not seen since October, falling over 1 Bcf/d. Some of the declines can be attributed to freeze offs in several of the supply regions as some of the coldest temperatures seen since the middle of last winter hit the market. Canadian supplies offset some of these losses as imports increased 460 MMcf/day with higher cash prices. Despite colder temperatures pushing demand up early in the week, warming temperatures toward the end of the week limited total demand gains to 550 MMcf/d week over week. The warming trend should continue this coming week sending demand to more normal levels but above last year’s levels for the same week. The storage report last week was very near expectations with a rare December withdrawal above 200 (at 207) and market expectations for this week’s report are even a greater withdrawal. This will place inventories below last year’s levels and below the 5-year average. Prices faced downward pressure early in the week, testing major technical support. However, a failure to extend the losses further and a change in the weather forecasts for early January (colder), prices quickly rebounded. This price action set up a bullish outside week reversal (a technical indication of prices trading to a lower low than the previous week only to close the week above the previous week’s high). This type of price action indicates a reassessment of the traders and creates a bullish bias to the upcoming week’s trade. The market continues to trade around the weather reports (as it does in early winter) and any additional colder patterns to the forecasts will add fuel for further gains. The upcoming week’s warmth was a primary reason for early week declines and now the focus is on the longer-term weather patterns. A series of 200+ withdrawals from storage during January, will continue to pressure prices up. Drillinginfo has been calling for a rise in prices to facilitate additional investment in drilling rigs. To date, the price action in the summer and fall 2017 has not responded to incentivize additional gas-directed investment and the probability of depleted storage levels at the end of March has only increased. As the depleted storage issue becomes fully understood, Drillinginfo’s expectation of a price response will become a reality.   NATURAL GAS LIQUIDS Propane inventories decreased 3.1 MMBbl last week as reported by the EIA, marking a fourth consecutive withdrawal. Cold temperatures have led to strong storage withdrawals over the past few weeks. Propane stocks now sit at 92.5 MMBbl, roughly 5.1 MMBbl lower than this time last year. However, propane stocks are still well above the five-year average of 62.3 MMBbl for this time of year prior to 2015 (before the price crash). Ethane: Prices continue to rise along with natural gas prices, due to winter weather. Prices will largely continue to move with natural gas and weather forecasts. Propane: Propane prices continue to rise with winter weather and slightly rising crude prices. Butanes/Natural Gasoline: Normal butane prices have gained 30% over the last week. This is the first time that normal butane prices have been higher than natural gasoline prices since 2011. The extreme jump is mainly driven by market participants covering their shorts before the expiration of January contracts. Given that natural gasoline price is a price ceiling for butane and that this was a temporary uptick to cover shorts, it is expected that normal butane prices will trade below natural gasoline prices moving forward. http://everythingshale.com/news/2016/december/27/the-week-ahead-for-crude-oil-gas-and-ngls-markets/ http://everythingshale.com/news/2016/december/27/the-week-ahead-for-crude-oil-gas-and-ngls-markets/ Tue, 27 December 2016 11:00:39 http://everythingshale.com/news/2016/december/27/bringing-nigeria-s-petroleum-investment-bill-home/ Nigeria’s Petroleum Investment Bill (PIB) is finally starting to make some progress through parliament. The Senate approved it after a second reading in November and now parliamentary committees are preparing their final reports before the third and final reading. Senate President Bukola Saraki said they aim to have the bill “signed, sealed and delivered for the benefit of the Nigerian public early in 2017.” The PIB’s passage has taken more than a decade to date. Given such glacial progress and the plethora of problems facing the Nigerian oil industry, it could be argued that the bill just needs to be forced over the line. However, as ever, the devil will be in the detail. President Muhammadu Buhari’s government is using the previous administration’s PIB as the basis for its deep-seated reforms, but with a number of significant changes. The Nigerian National Petroleum Corporation has long dominated the industry, acting as regulator, marketer, policy-maker and upstream participant in its own right. Buhari has sought to overcome opposition from the NNPC to its break up by totally replacing its senior management, including by bringing in new executives from outside the organization. The NNPC’s responsibilities are to be transferred to three main companies: the Nigeria Petroleum Regulatory Commission (NRPC), which will regulate the sector; the National Petroleum Company (NPC); and the Nigeria Petroleum Assets Management Company (NPAMC). The NPAMC will take control of the NNPC’s upstream assets. As the proposals stand, the NPC and NPAMC are both to be permitted to market oil to create competition in the sector, but the NNPC wants the NPC to be given sole responsibility for sales. If the government accepts the proposal, the NPAMC would be restricted to overseeing oil production and joint venture agreements with oil companies. Whatever the composition of the final bill, one thing is important above all else — the system must be as transparent as possible. The Nigerian oil industry has had problems with corruption and inefficiency of monumental proportions. There is nothing inevitable about this. But when a culture has been so deeply ingrained, it will take a huge effort to root it out. The keys are clarity and simplicity. The web of acronyms provided by the new structure may seem complicated and having a single national oil industry organization in the form of the NNPC may seem simple. Yet the byzantine nature of the NNPC’s financial flows stymied accountability and bled the company — and the state — of much needed revenue. It also prevented the NNPC from performing as a competent joint venture partner. There are some positive signs. The NPC will be required to publish an annual, detailed report on all petroleum revenue payments made to government. There is to be an initial public offering of at least 40% in the NPC and the higher standards required of listed companies should help to improve financial standards. Buhari has also been sensible in opting to recruit executives from outside the NNPC. The post Bringing Nigeria’s Petroleum Investment Bill home appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/27/bringing-nigeria-s-petroleum-investment-bill-home/ http://everythingshale.com/news/2016/december/27/bringing-nigeria-s-petroleum-investment-bill-home/ Tue, 27 December 2016 05:01:36 http://everythingshale.com/news/2016/december/23/up-go-the-holiday-lights-up-goes-the-electric-power-demand/ We all know the scene in the National Lampoon’s Christmas Vacation movie where the switch is finally flipped on and Clark W. Griswold’s 250 strands of bulbs burst into light causing a rolling blackout. Following Griswold’s calamity is a scene where a hand switches on the “auxillary” power plant which brings the city’s lights back to normal. While the scenario of one house draining a city’s power is Hollywood shenanigans, holiday lighting does add a significant additional level of electricity demand during the start of winter when cold weather is already driving up load. In New York alone, holiday lighting adds about 750 to 800 MW of additional energy demand to the Empire State, according to the New York ISO. In other words, the amount of energy used for New York holiday lights would be enough to power roughly 800,000 homes . But even though holiday lighting adds a little bit of extra demand during start of winter, overall electricity demand growth over past couple of decades has been relatively slow. The Energy Information Administration estimates electricity demand growth has been 0.5% per year from 2000-2015. Further, EIA  predicts about 1% per year growth from 2015-2040. Electricity demand growth has been closely linked to gross domestic product: if the economy does well, electricity demand grows with it, and vice versa. Demand growth has also been slowed as the world has become smarter about how it consumes energy, with changes in the type of lightbulbs we use to more efficient appliances. So if the economy picks up in the next few years, electricity demand could grow quicker than expected. And who know, if Americans adopted the practice of lighting up houses for other holidays throughout the year, electricity demand could take off even faster. Imagine houses lit up in green during St. Patrick’s day, red for St. Valentine’s Day or even orange for Halloween. The Clark W. Griswolds of the world would be busy year round with lightbulb strands and the auxillary nuclear power plant would be just humming along. And who know, maybe there would be a need for two or three more auxillary plants. The post Up go the holiday lights, up goes the electric power demand appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/23/up-go-the-holiday-lights-up-goes-the-electric-power-demand/ http://everythingshale.com/news/2016/december/23/up-go-the-holiday-lights-up-goes-the-electric-power-demand/ Fri, 23 December 2016 10:00:14 http://everythingshale.com/news/2016/december/22/weekly-gas-storage-report-12222016/ The EIA announced a 209 Bcf withdrawal for the week ended Dec. 16, the largest withdrawal since January. The draw was in the high end of market expectations. The full range of forecasts ahead of the release was -179 to -216. The 209 Bcf draw compares to a 33 Bcf draw reported last year. The storage report is bullish as prices went up following the EIA report. Prompt month (Jan17) is currently trading up 5-6 cents to 3.60/MMBtu, at time of writing. Working gas storage inventories dropped to 3.597 Tcf, taking stocks below 2015 and the 5-year max for the second week in a row. Inventories remain above the 5-year average by 78 Bcf or 2%. Cold temperatures have led to strong storage withdrawals over the past few weeks, and price volatility continues as the market reacts to weather forecast changes and updates. Fundamentals: Supply: December dry gas is down 1 Bcf/d compared to November due to freeze-offs, however Canadian imports increased about 1 Bcf/d in order to help meet demand. Demand: The colder-than-normal temperatures have driven residential and commercial demand to similar levels seen at the beginning of the polar vortex in December of 2013.   Looking ahead, inventories are now below record highs and withdrawals will continue. It is expected that prices will continue to rise as a result of lower inventories and winter weather. http://everythingshale.com/news/2016/december/22/weekly-gas-storage-report-12222016/ http://everythingshale.com/news/2016/december/22/weekly-gas-storage-report-12222016/ Thu, 22 December 2016 16:51:55 http://everythingshale.com/news/2016/december/21/weekly-petroleum-stocks-122116/ US crude oil stocks increased by 2.3 MMBbl last week. Gasoline and distillate inventories decreased by 1.3 MMBbl and 2.4 MMBbl respectively. Yesterday afternoon, API had reported a crude oil and distillate withdrawal of 4.1 MMBbl and 1.5 MMBbl respectively, as well as a 2.0 MMBbl gasoline withdrawal. Analysts had expected a crude oil and distillate withdrawal of 2.3 MMBbl/d and 0.9 MMBbl/d respectively, along with gasoline build of 1.1 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted a decrease of 11.9 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be down 10 MBbl/d from last week per EIA’s estimate. Imports were up 1.1 MMBbl/d last week to an average of 8.5 MMBbl/d. Refinery inputs averaged 16.7 MMBbl/d (184 MBbl/d more than last week), leading to a utilization rate of 91.5%. The petroleum stocks report is bearish, as U.S crude inventories increased and was not aligned with expectations, however the crude build was more than offset by the withdrawals in petroleum products. Market has reacted to the unexpected build in crude stocks, prompt month WTI prices are down $0.20/Bbl, trading at $53.10/Bbl at the time of writing. WTI prices have been trading in the $50-55/Bbl range for the past week as the market is weighing the bullish proposed production cut from OPEC and non-OPEC producers vs. the bearish upside that mid-$50/Bbl crude prices provide for US production potential. Bullish news this week include Saudi Arabia, Kuwait, and UAE notifying customers that they will cut supply in January, Russia’s assertion that all of the country’s oil companies have agreed to reduce output, and IEA’s revised (200 MBbl/d higher) demand forecast due to revisions to Chinese and Russian consumption numbers. On the bearish side, Iraq has signed new deals with Asian customers despite their commitment to reduce output, Libya is close to increasing output after a pipeline that connects major oilfields was put back in service, higher prices are allowing US producers to continue to add rigs to the fleet, and the value of the dollar is causing affordability concerns for crude oil. WTI prices have a floor in the high-$40/Bbl level due to the possibility of successful production cuts. Until definitive data from the countries involved in the cuts show up in late January the market will remain skeptical about the prospects of the cut. The ceiling is set at mid-$50/Bbl price levels as those prices would incentivize further production growth in the US. Moving in to the new year, Drillinginfo expects prices to stay rangebound within these levels with thin trade. Any moves outside of the range will be driven by solid data regarding the success of the production cuts. Petroleum Stocks Chart http://everythingshale.com/news/2016/december/21/weekly-petroleum-stocks-122116/ http://everythingshale.com/news/2016/december/21/weekly-petroleum-stocks-122116/ Wed, 21 December 2016 16:58:54 http://everythingshale.com#err-12590 OPEC production is primarily from conventional reservoirs. These reservoirs require reservoir pressure management. Some have suggested that Saudi Arabia’s rationale for cutting production was to reverse reservoir damage that overproduction has/may have caused. Preservation of reservoir integrity may ultimately limit “immediate” upwards adds to inventory from OPEC. The temptation to cheat on quotas undoubtedly rises as prices rise, but this will occur in a universe populated by mostly long established fields for which pressure drawdowns due to years of production have left reservoirs in a delicate balance. So it’s quite possible that even if cheating IS encouraged by member nations, long term damage to ultimate cash flow may occur if the cheating barrels are sourced from mature fields.   Source: FundamentalEdge The geopolitical landscape is absolutely teeming with heightened tensions and potential black swan events. Inquiries into Russia’s hacking activities, possible re-imposition of Iran sanctions, the increasingly desperate Venezuelan situation, China’s seizure of a US Navy drone and desired control of shipping lanes in the South China sea—not to mention the destabilizing end game in Syria—are likely flash points that could easily escalate into violence that could greatly hamper the ability of OPEC oil to get to market. It’s a good bet that supply interruption, rather than global demand strength is a more likely foundation for future price variability in crude. If reservoir damage worries are a fact of life for many OPEC producers, US unconventional producers may ultimately be the long term winners in a universe of rising prices (assuming that OPEC acts rationally for long term gain, rather than to staunch short term cash flow problems. Thoughts? Comment below. http://everythingshale.com#err-12590 http://everythingshale.com#err-12590 Tue, 20 December 2016 16:00:46 http://everythingshale.com/news/2016/december/20/analysis-of-opec-production-cuts-video/ OPEC production is primarily from conventional reservoirs. These reservoirs require reservoir pressure management. Some have suggested that Saudi Arabia’s rationale for cutting production was to reverse reservoir damage that overproduction has/may have caused. Preservation of reservoir integrity may ultimately limit “immediate” upwards adds to inventory from OPEC. The temptation to cheat on quotas undoubtedly rises as prices rise, but this will occur in a universe populated by mostly long established fields for which pressure drawdowns due to years of production have left reservoirs in a delicate balance. So it’s quite possible that even if cheating IS encouraged by member nations, long term damage to ultimate cash flow may occur if the cheating barrels are sourced from mature fields.   Source: FundamentalEdge The geopolitical landscape is absolutely teeming with heightened tensions and potential black swan events. Inquiries into Russia’s hacking activities, possible re-imposition of Iran sanctions, the increasingly desperate Venezuelan situation, China’s seizure of a US Navy drone and desired control of shipping lanes in the South China sea—not to mention the destabilizing end game in Syria—are likely flash points that could easily escalate into violence that could greatly hamper the ability of OPEC oil to get to market. It’s a good bet that supply interruption, rather than global demand strength is a more likely foundation for future price variability in crude. If reservoir damage worries are a fact of life for many OPEC producers, US unconventional producers may ultimately be the long term winners in a universe of rising prices (assuming that OPEC acts rationally for long term gain, rather than to staunch short term cash flow problems. Thoughts? Comment below. http://everythingshale.com/news/2016/december/20/analysis-of-opec-production-cuts-video/ http://everythingshale.com/news/2016/december/20/analysis-of-opec-production-cuts-video/ Tue, 20 December 2016 16:00:46 http://everythingshale.com/news/2016/december/16/london-school-of-economics-study-fracking-is-revitalizing-us-manufacturing/ A new study by researchers from the London School of Economics (LSE) further confirms a development EID has highlighted many times before — the shale gas revolution is fueling a U.S. manufacturing renaissance. The study, which was featured in a recent LSE Business Review article headlined “ Fracking has made US manufacturing more competitive ,” finds that for every two jobs directly created by fracking, at least one more is created in the manufacturing sector . The study recognizes that fracking has made natural gas more readily available and affordable across the U.S. in the last decade. As a direct result, LSE’s research discovered that energy-intensive sectors like manufacturing became more productive in the U.S. in comparison to other nations as domestic natural gas prices fell, “We document that output in energy-intensive sectors expands significantly with the widening of the natural gas price gap. Consistent with that observation, we show that the energy-intensive sectors absorb more capital (measured by capital expenditure decisions as a proxy) and labour (captured by employment) in order to produce this additional output.” According to the researchers, U.S. natural gas provided by fracking contributed to a $10 “price gap” between the U.S. and Europe by the end of their sample period, leading to unprecedented economic gains that helped the country emerge from the depths of the Great Recession, “Given that the price gap widened to $10 by 2012, we find that average manufacturing exports have expanded by roughly 10% due to the shale gas boom. This amounts to roughly 4.4% of the overall value of exports of goods and services from the United States in 2012.” “Our results suggest that the cost advantage due to the shale gas boom may have helped the US economy recover significantly faster than it would otherwise have done after the financial crisis of 2007/08.” Based on their analysis, the team was able to conclude that the shale gas revolution added more than 350,000 manufacturing jobs to the U.S. economy, “Using the average sector level employment together with average energy intensity, we can arrive at an overall estimate of the employment gains: total manufacturing sector employment increased by around 356,000 jobs up to 2012. A comparison with previous research (Feyrer et al, 2015) suggests that, for every two jobs created in direct relation to fracking, this indirect effect adds more than one additional job elsewhere in the economy.” This research falls in line with a recent White House National Economic Council report entitled “Revitalizing American Manufacturing” that found since U.S. manufacturing has added over 800,000 direct jobs since early 2010. The White House links this directly to shale production, saying,  “The surge in American natural gas production has lowered energy costs for manufacturers and driven job growth.” And as the following EID graphic illustrates, the dramatic rise in shale gas production in recent years has correlated directly with the recovery of the manufacturing sector. This is just the latest report illustrating an unmistakable trend: as goes shale gas development, so goes manufacturing. And as U.S. manufacturing goes, so goes America. http://everythingshale.com/news/2016/december/16/london-school-of-economics-study-fracking-is-revitalizing-us-manufacturing/ http://everythingshale.com/news/2016/december/16/london-school-of-economics-study-fracking-is-revitalizing-us-manufacturing/ Fri, 16 December 2016 21:53:53 http://everythingshale.com/news/2016/december/16/nrg-retail-electric-companies-fined-for-violating-state-rule/ Retail electric companies can prevent clients from switching until their final bills have been processed, butan  investigation by the Texas Public Utilities Commission found that  Reliant Energy, Green Mountain Energy and U.S. Retailers  found that the companies were imposing arbitrary waiting periods on clients before clearing a company switch, forcing some customers who had already paid their bills to wait several days before switching electric companies. The investigation stemmed from complaints filed in 2013. The companies argued that the PUC’s rules do not stipulate that imposing a waiting period is a violation. “We stand for and go above and beyond what is required to help customers with bill pay assistance,” said Dave Knox, a spokesman for NRG. “We also stand for complying with all rules and regulations that govern our business. We are pleased that the settlement agreement has been approved and this issue resolved” The companies were notified of the fines on Nov. 21, and the PUC approved a settlement with the companies during a Friday meeting. These so-called switch-hold practices are unpopular with consumer advocates because they restrict consumer choice,  said Jake Dyer, a policy analyst for the Texas Coalition for Affordable Power, a non-profit advocacy group. Dyer, who was not familiar with this particular case, said he was pleased to hear that the PUC is making sure that the rule is not abused. The PUC has also ordered that the companies offer a collective $1.3 million in bill payment assistance for low-income customers in 2016. http://everythingshale.com/news/2016/december/16/nrg-retail-electric-companies-fined-for-violating-state-rule/ http://everythingshale.com/news/2016/december/16/nrg-retail-electric-companies-fined-for-violating-state-rule/ Fri, 16 December 2016 21:46:53 http://everythingshale.com/news/2016/december/16/us-oil-rig-count-booms-again-permian-way-up/ U.S. oil drillers collectively sent 12 more rigs into the patch this week, the Houston oilfield services company Baker Hughes reported Friday . Gas drillers added one rig. The rise was driven again by drillers in West Texas' Permian Basin. The total rig count rose to 637, up from a low of 404 in May. The count still lags the same period last year, when 709 drilling rigs were operating in U.S. oil and gas fields. RELATED: Oil jobs may be coming back faster than employment data make it appear The number of active oil rigs jumped to 510 this week. Gas rigs ticked up to 126. The number offshore again stagnated at 22, down 2 year over year. Total rig counts lifted by 14 in Texas, two in New Mexico and one in Colorado. North Dakota lost one, Oklahoma and Wyoming two. The Permian, which straddles Texas and New Mexico, added 12 rigs. No other U.S. oilfield added more than one. Drilling activity has followed the modest rebound in prices, from February's low of about $26 a barrel to more than $50 in recent weeks. Prices settled on Thursday at $50.90. http://everythingshale.com/news/2016/december/16/us-oil-rig-count-booms-again-permian-way-up/ http://everythingshale.com/news/2016/december/16/us-oil-rig-count-booms-again-permian-way-up/ Fri, 16 December 2016 18:21:58 http://everythingshale.com/news/2016/december/16/phillips-66-ships-first-cargo-from-freeport-lpg-export-terminal/ The first contracted shipment left early Friday morning on board the large Commander gas carrier, Phillips 66 said. The project takes liquefied petroleum gas - mostly propane or butane - from facilities in Sweeny that separate natural gas liquids into ethane, butane and propane. Most of the ethane goes to petrochemical plants for chemicals and plastics. The butane and propane can be exported for heating and cooking. Phillips 66 Chairman and CEO Greg Garland lauded the facility's ability to easily move multiple grades of LPG directly into global markets.†The Freeport LPG Export Terminal can simultaneously load two ships with refrigerated propane and butane at a combined rate of 36,000 barrels per hour. The terminal can export the equivalent of 4.4 million barrels a month. The export facility was developed to satisfy the growing international demand for affordable U.S. natural gas liquids derived from U.S. shale, according to Phillips 66. With the expectation for U.S. natural gas production to keep growing, Phillips 66 said it's evaluating additional projects along the Gulf Coast. http://everythingshale.com/news/2016/december/16/phillips-66-ships-first-cargo-from-freeport-lpg-export-terminal/ http://everythingshale.com/news/2016/december/16/phillips-66-ships-first-cargo-from-freeport-lpg-export-terminal/ Fri, 16 December 2016 16:26:00 http://everythingshale.com/news/2016/december/16/key-energy-emerges-from-bankruptcy/ The company filed for Chapter 11 protection in October with $1.1 billion in assets and $1.2 billion in debts. Key, like many oil companies recently, expanded too quickly during the oil boom and racked up hundreds of millions of dollars in debt that it was unable to support in the crash, as oil prices plunged from $107 a barrel in the summer of 2014 to $26 in February. By the end of 2015, the company had amassed nearly $1 billion in long-term debt and run up more than $1 billion in operations losses, according to regulatory filings. RELATED: Key Energy becomes latest oil company to file for bankruptcy The bankruptcy wiped out $694 million in Key's long-term debt. Some holders of Key stock before the bankruptcy will receive 5 percent of the new company's shares. The rest goes to the companies that held Key debt. Platinum Equity, a Los Angeles-based global investment firm that focuses on corporate turnarounds, is now the company’s largest shareholder. About 200 North American oil companies and service providers, half based in Texas, have filed for bankruptcy since the start of 2015, according to Dallas law firm Haynes and Boone. http://everythingshale.com/news/2016/december/16/key-energy-emerges-from-bankruptcy/ http://everythingshale.com/news/2016/december/16/key-energy-emerges-from-bankruptcy/ Fri, 16 December 2016 16:11:33 http://everythingshale.com/news/2016/december/16/weatherford-appoints-new-cfo-and-president-after-shakeup/ Shivram was promoted in November from the CFO position to interim CEO after longtime chairman and CEO Bernard Duroc-Danner resigned amid Weatherford’s ongoing financial woes. The oilfield services giant’s largest operations are based in Houston. Shivram joined Weatherford three years ago after a long career at Schlumberger. Shivram named Christoph Bausch executive vice president and CFO. Bausch joined Weatherford in May as a vice president after leaving the CFO position at Norway-based . oilfield services company Archer Ltd. Bausch also has worked at Transocean and Schlumberger. RELATED:  Weatherford gets junk†credit rating after CEO resigns Weatherford’s new president of regional operations over the Western and Eastern Hemispheres is Frederico Justus, who joined Weatherford in 2010 and most recently served as vice president over the Middle East and Africa region. Justus replaces Tony Branch in the president’s role. Weatherford would only say that Branch is leaving the company and that the corporation is grateful for his service. “The future is full of opportunity for Weatherford, and I very much look forward to working with both Christoph and Frederico to take our company to the next level,” Shivram said in a statement. Weatherford Vice Chairman Robert Rayne became the new chairman last month. Weatherford posted a $1.8 billion third-quarter loss after agreeing in September to pay a $140 million penalty to settle federal charges that it used deceptive accounting practices to falsely inflate profits in previous years before Shivram joined the company. Weatherford is a distant fourth in the rankings of the largest oil field services companies after Schlumberger, Halliburton and Baker Hughes. Since the beginning of 2014, Weatherford has reduced its workforce to 31,000 from more than 67,000. It was struggling financially even when oil was at $100 a barrel, but has now largely completed its downsizing at the end of the two-year oil bust. http://everythingshale.com/news/2016/december/16/weatherford-appoints-new-cfo-and-president-after-shakeup/ http://everythingshale.com/news/2016/december/16/weatherford-appoints-new-cfo-and-president-after-shakeup/ Fri, 16 December 2016 15:21:39 http://everythingshale.com/news/2016/december/16/what-global-oil-flows-might-look-like-after-opec-s-supply-shock/ The early signs are that Middle East suppliers will prioritize Asia, pushing competitors in Africa and the Americas to keep cargoes in the Atlantic region. Saudi Arabia has indicated it will initially maintain most flows to fast-growing Asia, while draining more heavily oversupplied Western regions. Kuwait is doing much the same. They want to keep their market share to Asia,†Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said of Middle East suppliers. The routes they will restrict the oil flow most will be to the U.S. and Europe.†Understanding how and where oil flows matters to almost everyone in the supply chain. Crude traders need to know as they exploit regional price gaps, tanker owners depend on the cargoes being transported over long distances, while many refineries are configured to run most effectively using specific varieties of crude. Prioritizing Asia If Middle East producers do indeed fight to keep their Asian market share, then higher proportion of crude pumped in West Africa, the North Sea, the Black Sea and the Mediterranean could stay within that region, according to Erik Nikolai Stavseth, a shipping analyst at Arctic Securities AS in Oslo. The Saudis' prioritizing growing Asian nations and leaving Western buyers more to themselves is an obvious negative for crude tankers,†since it would imply shorter-distance shipping and fewer cargoes, said Stavseth. Supertankers are already bracing for their worst year since 2013. Still, there are many moving parts that dictate where barrels flow. Demand for tankers would take a hit if fewer cargoes were moved between from the Atlantic to Asia, a long-distance route. Cheaper shipping could then make such deliveries financially attractive. If one region gets a bigger cut than another, prices adjust, pulling cargoes from one area to another. Much will also depend on the grades the producers cut. Right grades Much of the Middle East's reductions will be heavy grades that are cheaper, says Eugene Lindell, a senior analyst at Vienna-based JBC Energy GmbH. If correct, then Venezuela and other Latin American suppliers could make up the shortfall, he said. By contrast, Sadad al-Husseini, an independent Dhahran-based analyst and former official at Saudi Arabia's oil company, said he expects the bulk of Saudi cuts to be Arab Light because demand for Heavy is high. Through the first nine months of this year, Saudi Arabia shipped about 3.1 million barrels a day to key Asian nations including China, Japan and South Korea, data compiled by Bloomberg show. Flows to the OECD Americas measured 1.2 million barrels a day, and 826,000 daily barrels to Europe.OPEC pledged on Nov. 30 to cut supply by 1.2 million barrels a day, overcoming skepticism it would do a deal. Non-member nations said Dec. 10 they would curb 558,000 barrels a day. Cuts underway Nations participating in the curbs have begun to notify refiners of their plans for January deliveries, indicating trade routes that will be hit. Saudi Arabian Oil Co., the state oil company known as Saudi Aramco, plans to keep its full contractual supplies to at least five Asian refineries, according to officials at those facilities. Kuwait is also prioritizing Asia, according to an official from the state oil company. While Saudi Aramco did curb January sales to parts of Southeast Asia, the nation also sold full volumes under long-term contracts for next month to North Asian nations including China and Japan — key demand areas — according to people familiar with the decisions. Keeping up supplies to China matters to the world's biggest crude exporter, which has seen shipments from rival Russia growing steadily. Meanwhile, Aramco has started to inform customers that it will begin to curb shipments to Europe and North America. One European refiner will see its portion of Saudi crude decline by 20 percent next month, according to a person familiar with the matter. Consultants PIRA Energy Group and Energy Aspects Ltd. told clients the government in Riyadh has begun reducing the amount refineries receive under long-term contracts. Saudi Arabia's initial approach is to keep crude that's produced in the Atlantic Basin within that region, preventing it from flowing to Asia, according to a Gulf official familiar with the matter. Visible markets OPEC is aware of high inventories in visible†markets like the U.S., which is another reason why it will target cuts there, according to Petromatrix's Jakob. Crude oil inventories in the U.S. impact prices more than any other part of the world,†he said. If OPEC members want to have a price impact, I think they will target lower flows to the U.S.†http://everythingshale.com/news/2016/december/16/what-global-oil-flows-might-look-like-after-opec-s-supply-shock/ http://everythingshale.com/news/2016/december/16/what-global-oil-flows-might-look-like-after-opec-s-supply-shock/ Fri, 16 December 2016 14:29:16 http://everythingshale.com/news/2016/december/16/desperate-exxonknew-activists-call-in-rfk-jr-to-push-debunked-talking-points/ Since news broke that ExxonMobil’s CEO was president-elect’s choice to be the next Secretary of State, desperate #ExxonKnew activists, who continue to be all but absent in mainstream media coverage of the nomination, have been desperately trying to get media to loop them into the story. Unable to accomplish that on the merits, though, they’ve shifted to a new strategy: trot out people with famous last names to see if they can finally move the needle in their direction. Enter: Robert F. Kennedy, Jr. To kick off his media tour, RFK Jr. sent a petition yesterday through his group WaterKeeper Alliance to the EPA asking it to end all contracts it has with ExxonMobil because of “misinformation spread over a period of many years…denying the very existence of climate change.” He then appeared on a CNN segment on the Rex Tillerson nomination to rehash these same tired #ExxonKnew talking points. So let’s take a moment to look at his claims in both the petition and the CNN segment, and then provide the facts. RFK Jr. Claim : “They’ve had a 50-year propaganda campaign. Exxon has known about global warming since the 1970’s and that it was going to raise the temperature six degrees Celsius by the end of the century. This is the end of the planet and they knew it. They had 16,000 scientists that knew more about the fate of the carbon atom than any company or government institution in the world.” FACT : RFK Jr. is, of course, referring to the Exxon hit pieces written by InsideClimate News and the Columbia School of Journalism – both funded by the Rockefellers – which claimed that Exxon somehow knew about climate change in the 1970s and 1980s, before the world’s top scientists had come to any firm conclusions, and then hid that research from the public. This claim has been so thoroughly debunked it’s surprising that they’re even still pushing it. First, as  EID’s video  clearly shows, InsideClimate News and Columbia School of Journalism cherry-picked some facts, and ignored others, to produce a completely distorted view of the company’s work on climate change. To provide just one example, InsideClimate claims ExxonMobil’s 1982 primer had come to unequivocal conclusions about climate change, but they simply leave out passages like this , which show that no, Exxon’s scientists had not reached any conclusions: “Fossil fuel combustion and the clearing of virgin forests (deforestation) are believed to be the primary anthropogenic contributors although the relative contribution of each is uncertain .” ExxonMobil has been invested heavily in climate research for over 30 years and the company’s scientists have produced more than  50 peer reviewed papers  spanning from the 1983 to 2014. Scientists from the company have been involved with the U.N. Intergovernmental Panel on Climate Change (IPCC) science since its inception, even contributing five different sections to its  Third Assessment Report . Some of ExxonMobil’s other important efforts include working with MIT on climate modeling, developing lower-emission solutions alongside researchers at Stanford University, and working with the U.S. Department of Energy and many others on a number of climate projects. All of this research is either online or in libraries, and fully accessible to the public. In fact the claim that Exxon “knew” about climate change is so weak that New York Attorney General Eric Schneiderman, who originally launched an investigation into what ExxonMobil “knew,” had to change his tune completely when he realized he was on very shaky legal ground (he’s changed the reason for his investigation now at least three times, by the way). RFK Jr. Claim : “They were doing the same thing the tobacco industry did. Rex Tillerson is part of Exxon’s strategy (to copy Big Tobacco’s playbook).” FACT : Just about every legal expert has said this claim is totally bogus – and even InsideClimate has admitted that the argument doesn’t hold up. Let’s just have a look at a few examples (for an even longer list, click here ): Dennis Vacco, the former New York Attorney General of New York, who actually did sue the tobacco companies, said in a Washington Post op-ed in the “I was one of 46 state attorneys general who signed the tobacco Master Settlement Agreement in November 1998. On behalf of New York’s taxpayers, I filed one of the suits that eventually pushed the cigarette makers to settle. I can tell you from experience that our fight against the tobacco industry has almost nothing in common with today’s campaign by several state attorneys general against ExxonMobil — despite what supporters of the effort would like you to believe.” (emphasis added) Brendan Collins, a partner at Ballard Spahr and an expert on environmental regulations, told the Washington Examiner that the evidence brought against the tobacco industry two decades ago is “pretty substantially different from the idea that Exxon may have duped me from getting a low-mileage [car] and now the island of Tuvalu is going to get covered by water,” He went on to note it’s a “very big leap.” Kevin Ewing, an attorney with Bracewell said , “Tobacco was shown to cause specific harm to specific individuals. Not so with climate change, where we cannot yet discern the factual connection between a company’s conduct and individual harm, even though we can observe the global effects of climate change at large.” Christopher Helman authored a Forbes piece entitled, “Big Oil Is Not Big Tobacco: Why The Witch Hunt Against Exxon Is Absurd,” which explains, “Exxon Mobil sells oil and natural gas. And stuff it makes out of oil and gas, like gasoline and diesel and plastics and lubricants. These products are far different from cigarettes. Cigarettes, like all non-medicinal drugs, have no overriding utility, no redeeming value. They exist only to satisfy an addiction.” Even Lisa Song, author of InsideClimate News hit pieces on Exxon, admitted in a presentation , “There’s been a lot of people comparing Exxon’s actions to what the tobacco industry did. I think there may be some similarities but the biggest difference is that the tobacco industry had done research on the health effects of tobacco but suppressed the research. They never published it. They never shared it publicly. Whereas Exxon in the 70’s and 80’s were doing climate research publicly in collaboration with the government. The thing was, people simply forgot about that research after it was done. So Exxon wasn’t suppressing their research .” (emphasis added) RFK Jr. Claim : “Rex is better than Lee Raymond. He ended a lot of the connections that Exxon had with the climate denier groups, but they’re continuing to pay climate denier climate denier groups.” FACT : ExxonMobil provides funding to a broad range of groups that support free market solutions and economic growth.  But if any of these groups take positions not supported by science – and in fact move into outright climate change denial – Exxon cuts off their funding . RFK Jr. Claim : “ ExxonMobil’s campaign of misinformation has led quite directly to the election of scores of political representatives and the appointment of scores of officials who expressly deny the existence of climate change and its anthropogenic causes and staunchly oppose any efforts to take steps to remedy the problem or mitigate the damage.” FACT : First, just about every news outlet over the past few days has acknowledged the obvious fact that both Tillerson and Exxon agree with the science on climate change and support a carbon tax as well as the Paris agreement. As  Financial Times  reported, Tillerson  said  in an October speech in London, “We share the view that the risks of climate change are real and require serious action,” he said, adding that Exxon had long supported a tax on carbon in preference to the current “hodgepodge” of regulations around the world. Tillerson and ExxonMobil have long backed the Paris climate deal. ExxonMobil  called it  “an important step forward by world governments in addressing the serious risk of climate change.” ExxonMobil has supported a carbon tax since 2009 calling it the best, least complex and most balanced approach toward reducing greenhouse gas emissions. #ExxonKnew activists like to blame Exxon for the United States never voting for legislative action on climate change, but what they fail to mention is that the U.S. Senate voted 95-0 against the Kyoto treaty and President Clinton never even submitted it to the Senate to be ratified. Notably James Hansen, one of the most prominent climate scientists, said that Kyoto Protocol “ will have little effect ” on global temperature in the 21st century. Waxman-Markey cap-and-trade legislation didn’t pass even at a time when Democrats had the majority in both the House and the Senate. The last time a climate bill hit the floor of the United States Senate was the Lieberman-Warner bill in 2008 and it was defeated largely due to strong Democratic opposition. James Hansen also called cap-and-trade the “ temple of doom ” and actually placed a large share of the  blame  for lack of action on climate on environmental groups: “The first concerns ‘Big Green,’ the large environmental organizations, which have become one of the biggest obstacles to solving the climate problem.”       http://everythingshale.com/news/2016/december/16/desperate-exxonknew-activists-call-in-rfk-jr-to-push-debunked-talking-points/ http://everythingshale.com/news/2016/december/16/desperate-exxonknew-activists-call-in-rfk-jr-to-push-debunked-talking-points/ Fri, 16 December 2016 13:39:22 http://everythingshale.com/news/2016/december/15/is-the-us-gasoline-market-defying-the-seasonal-downturn/ Gasoline demand in the United States is weakest during the winter months, which Is certainly no surprise considering cold and sometimes hostile weather that limits road travel after the holidays. Yet, despite the seasonal decline in consumption, futures speculators are the most bullish they’ve been in seven months. During the first two weeks of December, nearest delivered reformulated blendstock for oxygenate blending futures traded on the New York Mercantile Exchange settled above $1.50 gallon and at 110% of the $1.3930 2016 average through December 15 every session, putting the value at a spring premium–a time of year when the gasoline contract typically sets the calendar year high. In 2016, the settlement high was established on May 24 at $1.6544 gallon. Gasoline supplied to the primary market, which reached a record weekly high in June and is on pace to set an annual record high in 2016, remains strong late in the fourth quarter. The implied domestic consumption rate has slowed against year prior in late November, early December, when nearest delivered RBOB futures traded roughly 25cts gallon less. The lower price point in late 2015 was seen incentivizing demand. However, while the domestic demand rate has eased from mid-year highs, export demand has grown sharply, offering an outlet for strong production at US refineries. Gasoline export activity expanded in the second and third quarters, data from the Energy Information Administration shows, and surged to a 1.131 million bpd weekly record high in early December. Much of those exports have been shipped to Mexico, where growing domestic consumption joined refinery constraints and outages to spur the demand for US barrels. Mexico is gradually lifting restrictions on imports, with the government to end price controls in northern Mexico in April 2017, which would aid US refineries that are producing well above their historical average. The abundance of US crude oil has been a boon for the US refining sector, boosting margins. The gasoline crack spread, which subtracts the cost of crude from the gasoline price, held below the strong margins experienced in 2015 in 2016, as crude prices advanced relative to gasoline and, in large part, to sharply higher gasoline inventory. Yet, strong gasoline demand and an expected quicker pace of economic growth coupled with an improving US labor market supported a strengthening crack spread in December. Anticipation for a tighter global oil market in 2017 as agreements by the Organization of the Petroleum Exporting Countries and several non-OPEC oil producing countries to reduce production kicks in has also bolstered gasoline values. World crude values crested above $50 bbl early in the fourth quarter as OPEC oil ministers shuttled between member countries to secure commitments for a production cut after two years of global oversupply that had cratered oil prices and decimated many oil-dependent economies. Amid the long courtship, which began in early August, global oil prices rallied and sold off based on the latest newswire headlines and monthly production data until an agreement was reached on November 30 by OPEC and a companion pact on December 10 by several non-OPEC producing nations. Effective January 1, OPEC agreed to cut 1.2 million bpd in their crude production through June 2017 and non-OPEC producers agreed to reduce another 558,000 bpd of output that, if adhered to, is seen balancing the market in 2017. This expectation has turned market sentiment bullish, and not only supports crude prices but also gasoline. A look at the forward curve suggests RBOB futures will take out the 2016 high on the spot continuous chart in 2017, with the May contract trading just under $1.80 gallon in mid-December. While this explains the spring-like premium in December gasoline prices, it doesn’t mean seasonal features have disappeared. The market is in contango through May 2017, a market structure in which nearest delivered futures trade at a discount to deferred delivery, which is consistent with gasoline’s seasonal cycles. Moreover, the discounts in the calendar spreads at the front end of the forward curve are widening, illustrating gasoline’s weakest season during the first quarter. There are times when the seasonal pattern fails to materialize, which happened in the second quarter 2016 when the front end of the forward curve failed to move into backwardation, a market structure in which futures nearest to delivery trade at a premium to deferred delivery. An oversupplied gasoline market, especially along the East Coast, tamped down the typical summer premium in nearest delivered futures. A modest backwardation compared with historical spreads in contracts nearest to delivery didn’t take hold until late in the driving season when summer contracts moved into a premium against fall delivery. The front end of the curve again widen in September and briefly in early November amid the outages on the Colonial Pipeline’s main gasoline line.       The post Is the US Gasoline Market Defying the Seasonal Downturn? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/december/15/is-the-us-gasoline-market-defying-the-seasonal-downturn/ http://everythingshale.com/news/2016/december/15/is-the-us-gasoline-market-defying-the-seasonal-downturn/ Thu, 15 December 2016 22:43:25 http://everythingshale.com/news/2016/december/15/bipartisan-event-highlights-importance-of-shale-related-infrastructure/ Ohio is fortunate to have some major shale-related infrastructure projects in the works, and the importance developing and investing in such projects was the focus of a bipartisan event hosted this week by the National Association of Manufacturers (NAM), Ohio Manufacturers Association (OMA) and Youngstown Regional Chamber of Commerce. The event featured a panel discussion, moderated by OMA managing director of public policy Ryan Augsberger, entitled “Fueling America’s Future: Accelerating Energy and Transportation Infrastructure.” The discussion featured: Congressman Tim Ryan (D-13 th District) Congressman Bill Johnson (R-Sixth District) Rocco DiGennaro Jr., Western Reserve Building & Construction Trades Council (WRBCTC) president David Ledonne, MarkWest/MPLX vice president of operations for Utica and Appalachia The list of major Ohio infrastructure projects currently in the works includes pipelines, roads, bridges and power plants, and as Rep. Ryan told WKBN News , “… At the heart of the discussion comes the impact on the local economy,” adding that energy infrastructure is, “Great for the economy, great for the workers, middle-class jobs that are secure with benefits and pensions and good retirements, so it’s all good.” In fact, investment in projects such as these is important to continuing the recent revival of manufacturing to Ohio, as Ledonne and Ryan also discussed , “There is an opportunity to sit down in a bipartisan way and figure out how to use shale to move the country forward, because it can help us resuscitate manufacturing,” Ryan said. Part of the investment that’s needed goes beyond aspects of infrastructure traditionally associated with energy development (such as pipelines) and also includes transportation infrastructure, because as Ryan noted , “Our infrastructure is old, and we need to do something to fix it. These projects are not going to get any cheaper. We’ve got to get it done now. This is a time of investment for our country and it is going to cost us some money. But the alternative is we have infrastructure from the 1930s, we’re strangling the gas industry that wants to expand, we’re strangling the workforce that wants to go from a job making 10 bucks an hour to one of these 355 jobs that Dave talked about, one of these union jobs, with a pension and a benefit. That’s the American dream. That’s going to set our economy on an entirely new trajectory. That’s going to put people to work for the next 10 years if we do it right.” Augsberger emphasized that, “We know based on what we hear from our members that the support for transportation and energy infrastructure comes from all corners of the state. It crosses party lines, as you’ll see here today with the congressmen, and it transcends just about every demographic group you can imagine.” That bipartisan support is also evident in a recent poll conducted by NAM that found 84 percent of Buckeye State residents — a mix of Democrats and Republicans — said they would like to see U.S. energy development increase. Eighty-six percent of those surveyed said they support construction of more pipelines, natural gas compressor stations and power plants. Luckily for Ohio’s residents, as Rep. Johnson pointed out, many of these projects are already underway and are having significant impacts on his district’s economy and job growth. From Business Journal Daily : “ Johnson noted his district has seen some $8 billion in energy infrastructure spending , and there are four natural gas fired power plants and multiple compressor stations throughout the district. “Petroleum engineers say the region can support potentially five ethane cracker plants such as the one now being studied in Belmont County. These are huge projects, valued at $5 billion and creating 10,000 construction jobs and upwards of 1,000 permanent jobs once completed. Imagine five of those here in our region. We’ve just begun to scratch the surface.” And as DiGennaro explained, more jobs are in the works, thanks to new natural gas-fired power plants that will employ 500 union members . Altogether, EID estimates new natural gas-fired power plants could create roughly 4,000 local jobs. As Ryan emphasized several times throughout the day, “The best social program is a job,” and that’s exactly what investments in energy infrastructure will create. For more information on the event, be sure to watch the Business Journal Daily’s interviews with Congressmen Ryan and Johnson , and interviews with Rachel Jones from NAM and Mike Chadsey from the Ohio Oil and Gas Association (OOGA). http://everythingshale.com/news/2016/december/15/bipartisan-event-highlights-importance-of-shale-related-infrastructure/ http://everythingshale.com/news/2016/december/15/bipartisan-event-highlights-importance-of-shale-related-infrastructure/ Thu, 15 December 2016 22:00:57 http://everythingshale.com/news/2016/december/15/market-currents-saudi-versus-shale-battle-is-ongoing/ 1) BP has announced that its Grande Plutonio oil field has reached the production milestone of 500 million barrels of oil . The field became operational in late 2007, with production capacity of 144,000 barrels of oil per day. As our ClipperData illustrate below, Plutonio is one of a number of key Angolan export grades. Export loadings of Plutonio have averaged 110,000 bpd so far this year through November, while total Angolan exports average ~1.645mn bpd: 2) So much talk about OPEC / NOPEC compliance is great from a ClipperData perspective, given our unique insight into the opaque world that is tanker tracking. Two updates on this topic jumped out in the last 24 hours; the first is that an OPEC monitoring committee will likely gather for its first meeting next month or February . The second is via  @liamdenning  (who we regularly, and unashamedly, pilfer from). He points out that its not worth trying to track OPEC and oil flows until next year. But his view is not predicated upon a lack of developments on the OPEC front, but more related to inventory changes in December due to ad valorem tax strategies. As the chart below illustrates , US crude inventories are nearly always drawn down in December – to avoid paying taxes on crude inventories. Since 1980, inventories have only risen in five of the last thirty-six years. So despite the flattening of the forward curve, its impact on disincentivizing putting oil into storage can’t properly be assessed until next year – similar to OPEC / NOPEC compliance. 3) According to Bloomberg New Energy Finance, new unsubsidized solar projects are beginning to beat the costs of oil and natural gas. What is even more surprising, however, is that new solar projects in emerging markets are beating wind projects. The chart below is based on the average wind and solar costs from 58 emerging market economies . While solar has been expected to surpass wind costs eventually, it has been unexpected to see this happen this soon. 4) Yesterday we outlined how a simple back-of-the-envelope calculation justified Saudi’s decision to push OPEC to cut production, without even considering the detrimental impact on the kingdom’s economy. Well, the graphic below from WSJ outlines these impacts rather nicely – and pits them versus the detrimental impacts to the U.S. shale industry. While the price war of the last two years has caused a fairly severe budget deficit to Saudi Arabia, as well as considerably lower economic growth, the impact to the U.S. has been the bankruptcy of over 100 companies. While OPEC production now accounts for 42 percent of global supply – after falling below 40 percent in 2014 – U.S. shale is expected to have the better of the next two years, at least according to Pioneer Natural Resources CEO, Scott Sheffield: ‘ the U.S. is going to win the next two years because OPEC is cutting and U.S. shale is taking off ‘. 5) Finally, protesters in Libya who have been blockading pipelines to the Sharara and El Feel oil fields have committed to reopen them . It is estimated that reopening the fields could add 365,000 bpd of production, with an initial restart happening as soon as the coming days. According to our ClipperData , Libyan export loadings so far this month are at 450,000 bpd, after finishing above the 500,000 bpd level last month for the first time in over two years. http://everythingshale.com/news/2016/december/15/market-currents-saudi-versus-shale-battle-is-ongoing/ http://everythingshale.com/news/2016/december/15/market-currents-saudi-versus-shale-battle-is-ongoing/ Thu, 15 December 2016 18:20:50 http://everythingshale.com/news/2016/december/15/national-bureau-of-economic-research-says-shale-revolution-worth-35-trillion/ The National Bureau of Economic Research (NBER) released a report this week that quantified U.S. economic activity from 2012 to 2014 and found that $3.5 trillion of the increased equity of the U.S. stock market has been the result of shale oil development. Further, NBER looked at real world impacts on the economy from this increase and found that shale oil development has also stimulated job growth in a big way. From the report: “We show that the shale discovery announcement returns have significant explanatory power for the cross-section of employment growth rates of U.S. industries, indicating that the effect we identify operates through real economic channels. In the aggregate, we estimate that during the shale oil period 4,600,000 (net) new jobs are linked with the development of shale oil technology . This represents a 4.2% increase in the number of jobs across the industries in our study, compared to the aggregate number of jobs at the beginning of the shale oil period.” (emphasis added) This growth in activity stimulates other aspects of the economy as well. For example the report identifies that: “… an increase in fracking/drilling activity increases demand for output of (imperfectly competitive) industries that provide labor or materials for shale oil extraction, the positive news about shale sector productivity is good news for these industries — we refer to this as the ‘supply-chain effect.’” EID has noted before that ancillary industries — or those that make up the supply chain — have experienced major growth as a result of shale development. Take a moment to watch the following EID video to learn more about the impacts on the supply chain.   The report also identifies that, “To the extent that increasing income of households involved in shale oil production, directly or indirectly, improves the health of the local economies , it might benefit consumer-oriented industries that experience increasing demand for their goods — we can refer to this as the ‘income effect.’” In addition to allowing people stimulate their local economics by spending higher levels of disposable income at local businesses, the “income effect” can lead to even bigger things, such as the opening of new businesses or what recently occurred in Susquehanna County, Pa., where residents were able to raise money to assist the donations of Cabot Oil and Gas and build a new, much-needed hospital for the county . Additionally, NBER explains, “Finally, to the extent that good news about shale oil supply can depress oil prices, it may benefit a variety of industries whose output consists of goods that are complements with oil (e.g. cars) or whose expenditure shares increase through the effect on the consumers’ budget constraints — this can be called the ‘price effect.’” Nowhere is this “price effect” more visible than in the manufacturing industry . That said, it is important to understand the NBER report only looks at shale oil development and does not include shale gas in its estimates. Shale gas has a great story to tell as well. For instance, the White House National Economic Council recently released  a report entitled “Revitalizing American Manufacturing” which finds that since early 2010, U.S. manufacturing has added over 800,000 direct jobs , noting: “The surge in American natural gas production has lowered energy costs for manufacturers and driven job growth.” As the following EID chart shows, U.S. manufacturing has been revitalized at the same time shale gas production skyrocketed. There are numerous examples throughout the country of shale gas and oil development’s stimulation of jobs growth. As of 2014, the Marcellus Shale alone created more than 15,000 direct jobs in Pennsylvania, representing nearly a 260 percent increase in employment since 2007. The Leeds School of Business in Colorado reported that the industry  supported 94,000 jobs in the state in 2014. In Texas, that number was 444,000 , and oil extraction supported more than 24,000 jobs in North Dakota, where the state touted a minuscule 2.8 percent unemployment rate . All this said, it’s important to note that the $3.5 trillion in economic activity referenced in the NBER report refers to the impact of shale oil development alone . Imagine what that figure would be if it included all shale development across the country. Nonetheless, it’s clear the benefits from this industry are reaching the entire country, and this report just adds to that body of evidence. As U.S. Energy Secretary Ernest Moniz said in August , “The increased production of oil and natural gas in the United States has, obviously, been a major story in terms of our economy, and also our environment.” http://everythingshale.com/news/2016/december/15/national-bureau-of-economic-research-says-shale-revolution-worth-35-trillion/ http://everythingshale.com/news/2016/december/15/national-bureau-of-economic-research-says-shale-revolution-worth-35-trillion/ Thu, 15 December 2016 18:15:00 http://everythingshale.com/news/2016/december/15/gas-inventories-fall-below-5-year-max-for-the-first-time-since-april/ The EIA announced a 147 Bcf withdrawal for the week ended Dec. 9. The draw was higher than average market expectations. The full range of forecasts ahead of the release was -114 to -144. The 147 Bcf draw is the largest over the past 5 years and compares to a 46 Bcf draw reported last year and a five-year average withdrawal of 79 Bcf. The storage report is bullish as prices went up following the EIA report. Prompt month (Jan17) is currently trading up 2-3 cents to 3.567/MMBtu, at time of writing. Working gas storage inventories dropped to 3.806 Tcf, taking stocks below 2015 and 5-year max for the first time since April. Inventories remain above the 5-year average by 186 Bcf or 5%. Winter weather remains as the leading factor impacting prices over the past weeks. The 10-15-day weather forecasts weakened causing gas prices to lose over 20 cents per MMBtu on Monday, but have since gained some of them back.   Fundamentals: Supply: Dry Gas is up this week as production recovered from the lows seen last week due to freeze offs. Despite the cold weather, the Northeast has not seen lower production so no indication of freeze offs in the region. Canadian imports are higher this week to meet incremental demand in the East region.   Demand: December colder-than-normal temperatures has residential and commercial demand up over 10 Bcf/d higher compared to a year ago, and the trend will continue throughout the rest of the month.   Looking ahead, storage inventories are now below record highs and withdrawals will continue strong for at least three more weeks including a potential ~200 Bcf draw on next week’s storage report. Therefore, price gains are expected to continue in the near term. However, the size of the gains will depend on weather projections, particularly deviations from normal beyond the 15-day period. http://everythingshale.com/news/2016/december/15/gas-inventories-fall-below-5-year-max-for-the-first-time-since-april/ http://everythingshale.com/news/2016/december/15/gas-inventories-fall-below-5-year-max-for-the-first-time-since-april/ Thu, 15 December 2016 16:51:51 http://everythingshale.com/news/2016/december/15/shell-s-new-global-cfo-jessica-uhl-has-ties-to-houston/ Uhl, the current executive vice president of finance for integrated gas, begins her new post in March and will continue to work at The Hague.  She will replace CFO Simon Henry, who will assist with the transition through June. Before joining Shell in 2004, Uhl was a director of project development and later a vice president of corporate development for Enron in Houston and Panama. Uhl also will serve as an executive director of Shell and sit on the executive committee. Shell CEO Ben van Beurden praised Uhl’s promotion. “Jessica combines an external perspective with broad Shell experience and is a highly regarded executive with a track record of delivering key business objectives from cost leadership in complex operations to M&A delivery,” van Beurden said in the announcement. “I look forward to working with her in assuring its financial success as we execute our strategy to re-shape Shell.” http://everythingshale.com/news/2016/december/15/shell-s-new-global-cfo-jessica-uhl-has-ties-to-houston/ http://everythingshale.com/news/2016/december/15/shell-s-new-global-cfo-jessica-uhl-has-ties-to-houston/ Thu, 15 December 2016 15:31:16 http://everythingshale.com/news/2016/december/15/houston-selected-to-host-2020-world-petroleum-congress/ Houston on Thursday was named host of the 2020 World Petroleum Congress that attracted thousands of global energy delegates each year. Houston, which lost two previous attempts to host the event held every three years, was selected over Vancouver. WPC delegates meeting in Bahrain picked Houston with more than 70 percent of the vote. The city of Houston said the event could bring an estimated economic impact of $60 million to $80 million and draw 10,000 top-level international oil executives. In its last two bids, Houston lost to Moscow and Istanbul, which will host in July 2017. Houston last hosted the event in 1987. “We spent six years building relationships with WPC delegates and it paid off,” Houston Mayor Sylvester Turner said in the announcement. “Houston is the epicenter of energy on the global scale and this is where the new technologies are being developed.” Turner and members of the U.S. WPC Bid Committee traveled to Bahrain to make the final pitch on Houston's behalf and to witness Thursday's vote by WPC delegates. http://everythingshale.com/news/2016/december/15/houston-selected-to-host-2020-world-petroleum-congress/ http://everythingshale.com/news/2016/december/15/houston-selected-to-host-2020-world-petroleum-congress/ Thu, 15 December 2016 15:02:17 http://everythingshale.com/news/2016/december/15/exxonknew-ag-s-comments-on-sec-of-state-nominee-show-politics-at-play/ In the wake of the news that ExxonMobil Chairman and CEO Rex Tillerson has been nominated by the present-elect to serve as Secretary of State, the AGs and activists pushing the #ExxonKnew campaign are only further solidifying the fact that their crusade against the company is driven by politics. As case in point, immediately after the Tillerson news broke, Attorney General Maura Healey ran to the Boston Globe to suggest that the Exxon CEO should “come clean” and “absolutely answer the questions that we’ve been asking for months now.” Of course, Healey is referring the subpoena that she issued to the company as part in the #ExxonKnew crusade. This move comes not long after a federal judge issued  a discovery order  against Healey, and later to New York Attorney General Eric Schneiderman, to determine if they had a political motivation for their probes of Exxon – specifically if “bias or prejudgment” influenced their decision to initiate what could be a “bad faith” investigation.  Let’s just say her latest statements don’t help her case! Healey wasn’t the only one out there trying to capitalize on politics for #ExxonKnew. NPR also published an interview yesterday with Susanne Rust of the Rockefeller-funded Columbia School of Journalism, which produced the original climate hit pieces on Exxon, to discuss Tillerson’s nomination. To her credit – and in a departure from her other #ExxonKnew friends – Rust did note that Tillerson “is not a climate change denier,” and went on to admit that under Tillerson’s watch, ExxonMobil “accepted that climate change was real, called it something that was concerning and risky not just to the planet, but to the company.” Of course she still claimed he would be bad for the climate because is “still in the business of supporting the oil and gas business around the world.” While Healey and her #ExxonKnew friends may not want to admit it, given the pending discovery order, one former AG recently acknowledged that the entire affair is “politically motivated.”  As Douglas Gansler, former Attorney General of Maryland, said at an event held at the Center for American Progress (CAP), “The idea that AGs are politically motivated is an old one and a real one.  Yes, they’re politically motivated  in the sense that they are part of the political process; they have to run for office, they have to do what their constituents ask for, the voters that put them in office ask for,  and there is no bigger issue that they ought to be thinking about and working on than climate change .  And yes, that’s politically motivated. It’s good politics .” Meanwhile the #ExxonKnew message isn’t getting much traction. Instead, mainstream news outlets like CNN Money and the Washington Post , among many others, are reporting on Tillerson’s acceptance of climate science, and his support for a carbon tax and the Paris agreement. Bloomberg ’s editorial board even said , “Trump’s Secretary of State Pick Gets Climate Change.” Climatewire reported that Tillerson is actually the best candidate Trump could have chosen regarding climate issues and the international Paris agreement. David Goldwyn, the State Department’s top energy diplomat under President Barack Obama, noted Tillerson’s climate credentials,  saying , “If there is a chance of having a rational voice at the table on Paris, on climate, on investing in innovation and keeping the United States at the front of … clean energy technology innovation and not taking us out of the conversation, I think we have a good chance that Mr. Tillerson would be a rational voice in that conversation.” Even well-known entrepreneur Richard Branson tweeted : “Everyone from Sir David Attenborough to Rex Tillerson knows climate change is critical: https://virg.in/Zoc .” He added : “’ExxonMobil has held the view that the risks of climate change are serious and do warrant action.’ Rex Tillerson: https://virg.in/Zoc ” We’d have to agree with former AG Doug Gansler — the AGs are clearly “politically motivated” but considering that they’re being ignored, it may not be very “good politics.” http://everythingshale.com/news/2016/december/15/exxonknew-ag-s-comments-on-sec-of-state-nominee-show-politics-at-play/ http://everythingshale.com/news/2016/december/15/exxonknew-ag-s-comments-on-sec-of-state-nominee-show-politics-at-play/ Thu, 15 December 2016 02:11:05 http://everythingshale.com/news/2016/december/14/wayne-forest-leases-generate-17-million-for-taxpayers/ This week the Bureau of Land Management (BLM) hosted an online competitive auction sale of federal minerals located under the surface of the Wayne National Forest. The BLM auctioned off 719 acres for a total sale of over $1.7 million . On average, each acre sold for $2,416.85. More importantly, the local government will see a portion of this sale, as well as a portion of the royalty payments. In this case, the sale included leases with a royalty requirement of 12.5%. Because the Wayne National Forest is public land, the area does not benefit from the revenues of private property taxes, which typically support schools, roads, bridges, and government services.  Monroe County in particular has to grapple with this as Wayne National Forest covers tens of thousands of acres. Instead of property tax payments, the Bureau of Land Management instead pays Payment in Lieu of Taxes (PILT) to counties that contain the forest. Here’s how it works: Funds are returned to the states annually and then distributed to the counties based on national forest acres within the county, (a system which has been in place since 1908).  So, for Monroe County, leasing federal minerals in the most prolific dry gas region of the state will in fact be a windfall for local governments over the next few years.  For example, take a look at the receipts in 2014 from the national forest to Monroe County. As you will clearly see, they received no money from federal minerals as there was no development then. With WNF leasing going ahead, all that will change for Monroe County Perhaps that’s why the Monroe County Commissioners, local schools, landowners, and practically everyone in the county supported leasing the Wayne in the first place . Not only have they watched their sales tax revenues increase by 340 percent from oil and gas development on private lands, they are going to realize a boost from leasing county public lands as well.  As the bi-partisan Board of County Commissioners in Monroe County said in a support letter to lease minerals in the Wayne, “Since 2008, mineral development has generated more than $460,000 for local governments in 2014, Monroe County received $33,286 in PILT, of which there was no monies received from federal minerals. Sir, in addition to our concerns over lack of PILT payments, we also find this matter concerning from a perspective of “The Secure Rural School and Community Self Determination Act of 2000”, which is another source of funding received from the Wayne National Forest that provide payments to fund important local services, such as schools and roads. Delay and/.or a determination by BLM that would impeded Monroe County’s ability to realize additional funding from these sources would not be in the best interest of the county”. Indeed, it would not be. Once again, taxpayers are the winner when it comes to development of oil and gas in Ohio! http://everythingshale.com/news/2016/december/14/wayne-forest-leases-generate-17-million-for-taxpayers/ http://everythingshale.com/news/2016/december/14/wayne-forest-leases-generate-17-million-for-taxpayers/ Wed, 14 December 2016 22:41:02 http://everythingshale.com/news/2016/december/14/npr-swings-and-misses-in-recent-article-on-new-york-s-increased-shale-gas-usage/ As Energy In Depth reported last week , New Yorkers are saving millions and experiencing improved health thanks to the state’s increased reliance on natural gas. A New York-based National Public Radio affiliate acknowledged the latter fact this week, reporting that since the state’s fracking ban was announced two years ago, “New Yorkers are using more natural gas than ever.” But the station somehow managed to manufacture a negative narrative out of this development — complete with input from thoroughly debunked anti-fracking activist professors Tony Ingraffea and Bob Howarth . According to the WXXI-News report , more than 500,000 new businesses and residential consumers have made the conversion to natural gas in New York, resulting in an 18 percent increase in the state’s usage since 2014. In the response to this, the Howarth and Ingraffea told NPR: “New Yorkers need to wake up,” Howarth said. “We’ve banned fracking, but we’re importing shale gas, and we need to take responsibility for that.” The solution? According to Ingraffea, “New York has ample resources to do a complete transition to renewable energy in our lifetimes,” he said. “ And it just takes a little bit more political will .” Fortunately, WXII did offer some much-needed context and realism in response to this. Jon Sorenson, spokesman for the Public Service Commission — which developed New York’s plan to be 50 percent renewable by 2030—told WXXI that even a 50 percent renewable conversion would be “ambitious,” and added: “As much as we would like to, we cannot snap our fingers and build the infrastructure nor find the billions of dollars needed to become 100 percent renewable overnight.” Undeterred Ingraffea and Howarth went continue to push this tired claim: “Now we have undoubtedly in the literature proof that methane is not a good bridge fuel,” Ingraffea said. “It’s not good for anything.” The “proof” Ingraffea is referring to is the pair’s debunked 2011 study that claimed methane leaks from shale development far outweigh natural gas’ climate benefits (climate benefits environmentalists had touted for years before suddenly reversing course). EID developed a fact sheet when the pair released an updated version of the study in 2013 that included critical quotes from scientists across the country. Here are just a few: “We don’t think they’re [Howarth et. al.] using credible data and some of the assumptions they’re making are biased. And the comparison they make at the end, my biggest problem, is wrong.” —  Paula Jaramillo,* Carnegie Mellon Univ., Aug. 2011 * Research was funded in part by the Sierra Club. “Howarth, et. al (2011b) it is assumed that all potential fugitive [methane] emissions are vented. This is an unreasonable assumption…” — Francis O’Sullivan and Sergey Paltsev* Massachusetts Institute of Technology, Nov. 2012 * Paltsev is a Lead Author of the Fifth Assessment Report for the IPCC. “Here we reiterate and substantiate our charges that none of [Howarth’s] conclusions are warranted.” — Lawrence Cathles, Cornell University, Feb. 2012 “Average natural gas baseload power generation has life cycle GHG emissions 53% lower than average coal baseload power generation.” National Energy Technology Laboratory, Oct. 2011 In fact, since the duo’s reports were released, several methane studies have actually shown leakage rates well below the threshold ( 2.7 percent ) for natural gas to maintain its climate benefits. At the same time, increased use of natural gas has given the U.S. the distinction of being the only major nation to significantly reduce carbon emissions since 2005. New Yorkers also enjoyed the cleanest air in 50 years in 2013 thanks to conversions to natural gas that former Mayer Michael Bloomberg called “the single biggest step to save lives since we began our comprehensive smoking control program.” Perhaps even more evident than the latter development is the fact that natural gas is saving New Yorker’s money. Thanks to increased natural gas brought into the city via Spectra Energy’s Trans-Hudson pipeline , New York City residents saved $500 million between November 2013 and October 2016 . Folks like Ingraffea and Howarth will likely continue to ignore these benefits. In the meantime, reliable, affordable, abundant natural gas coming out of the Marcellus Shale will continue to prove to New Yorkers just how valuable it is — something most residents are surely thankful for as temperatures are set to drop this weekend. http://everythingshale.com/news/2016/december/14/npr-swings-and-misses-in-recent-article-on-new-york-s-increased-shale-gas-usage/ http://everythingshale.com/news/2016/december/14/npr-swings-and-misses-in-recent-article-on-new-york-s-increased-shale-gas-usage/ Wed, 14 December 2016 21:30:22 http://everythingshale.com/news/2016/december/14/us-chamber-energy-security-strongest-in-20-years-thanks-to-fracking/ The U.S. Chamber of Commerce Institute for 21st Century Energy released its annual Index of U.S. Energy Security Risk this week, and the report shows that the country’s remarkable reversal of fortunes on the energy security front continues. The report finds U.S. energy security is the strongest it’s been since 1996 , as our security risk level dropped three points to 78 in 2015, marking the fourth year in a row that the U.S.’s overall energy security risk has declined. Not surprisingly, the report credits the shale revolution for this remarkable trend. From the report’s press release : “ It is not a coincidence that American energy security has shown vast improvements at the same time that America’s innovative energy industry was able to ramp up oil and gas production , ” said Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, which produces the annual report. “Our recent Energy Accountability Series quantified just how dramatic the impact of the energy renaissance has been. Without it, America would have 4.3 million fewer jobs and consumers would be paying 31 percent more for electricity and 43% (more) for gasoline . While we’re not in a period of sustained improvements, the story would be much different without these advancements.” (emphasis added) The index analyzed 37 different security metrics for geopolitical, economic, reliability and environmental risks. The following graphic shows all of the metrics the index looked at: And this chart shows how 2015 compared to the 30-year average and previous years: The oil and natural gas sector saw the biggest improvements overall. Natural gas production reached record highs in 2015 thanks to a five percent increase, while crude oil output increased by more than seven percent. The report also highlighted an 11 percent drop in risks from energy-related CO2 emissions . From the report , “The decrease in risk was generally broad based. Of the 37 Index metrics, 19 showed a decrease in risk of 1% or more, 5 showed an increase in risk of 1% or more, and 13 showed essentially no change in risk in 2015. Most of the 19 metrics showing improvement were in the Fuel Import, Energy Expenditure, Energy Use Intensity, and Environmental metric categories. The most significant metrics showing higher risk were in the Market and Price Volatility metric grouping.” (page 12) The following chart shows areas that experienced a change of 10 percent or more: All this good news considered — as well as shale development’s undeniable contribution to increased energy security — the report cautions the biggest threat to this progress is the “Keep it in the Ground” KIITG movement, a fact Energy In Depth has discussed frequently . From the Institute’s press release : “The greatest threats to America’s energy security are largely components that we control,” Harbert said. “A continued regulatory assault on American energy production could lead to less diversity and reliability. And perhaps the biggest threat of all is the ‘keep it in the ground’ movement, which if actually implemented, would erase the gains made in recent years and bring us back to an era of dependence on foreign sources of oil .” Of course, the groups of fringe activists that make up the KIITG movement are currently focused on stopping the development of infrastructure like pipelines across the country and, in some cases, the leasing of federal minerals like those found beneath the Wayne National Forest . In doing so, these groups disregard the needs of consumers to push fringe agendas, as is evidenced by Sierra Club Dirty Fuels campaign director Lena Moffitt’s recent comment in Bloomberg : “ We’re in this critical window where renewables are going to be cost competitive in a few years,” said Moffitt, who is based in Oakland, California. “If we can forestall gas infrastructure being put in the ground and locking in that demand for the next 60 years — if we can forestall that by maybe just five years — the hope is that renewables will come in and be cost competitive in all markets. ” And while this movement is comprised of groups that don’t even come close to representing a majority opinion, they were recently blamed for the Democratic loss in this year’s presidential election . When asked recently by CNBC “Squawk Box” co-host Joe Kernan if the “somewhat radical” energy and climate policy advocated by the KIITG movement has served her party well, U.S. Sen. Heidi Heitkamp (D-N.D.) responded , “I think when you look at it, it’s so critically important that we live in the real world and not in the world of ideology. I can tell you that… there’s a large number of people that are ‘Leave It In The Ground’ that think we should shut down all fossil fuels. I think people in the fossil fuel industry feel that, whether they’re coal miners, or they’re oil workers, and I think that kind of alignment with ‘Leave It In The Ground’ and not looking at energy policy, has had an effect (on the way voters cast their ballots this year).” The Institute for 21st Century Energy forecasts that the current trend of decreasing risks to our nation’s energy security will continue as U.S. oil and natural gas production increases. However, an important aspect of the industry’s ability to develop these resources is having needed infrastructure in place to transport it to markets once wells are completed. The KIITG movement seeks to stop this infrastructure build out, and in turn, stop oil and gas development across the country. Such an occurrence would not only be devastating to our economy, as the Institute’s September report showed, but as this index demonstrates, could also compromise American energy security. http://everythingshale.com/news/2016/december/14/us-chamber-energy-security-strongest-in-20-years-thanks-to-fracking/ http://everythingshale.com/news/2016/december/14/us-chamber-energy-security-strongest-in-20-years-thanks-to-fracking/ Wed, 14 December 2016 19:36:39 http://everythingshale.com/news/2016/december/14/weekly-petroleum-stocks-121416/ US crude oil stocks decreased by 2.6 MMBbl last week. Gasoline inventories increased by 0.5 MMBbl and distillate inventories decreased by 0.8 MMBbl. Yesterday afternoon, API had reported a crude oil build of 4.7 MMBbl along with gasoline and distillate builds of 3.9 MMBbl and 0.2 MMBbl/d respectively. Analysts had expected a crude oil withdrawal of 1.5 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted a withdrawal of 2.0 MMBbl . For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be up 99 MBbl/d from last week per EIA’s estimate. Imports were down 943 MBbl/d last week to an average of 7.4 MMBbl/d. Refinery inputs averaged 16.5 MMBbl/d (57 MBbl/d more than last week), leading to a utilization rate of 90.5%. The petroleum stocks report is bullish, as the crude oil withdrawal was larger than expected. Gasoline stocks increased by a lower amount than API had forecasted and distillate inventories actually posted a decline, leading to a lower total petroleum inventories number. However, prompt month WTI prices are down $0.33/Bbl, trading at $52.65/Bbl at the time of writing on other news. Price gains continued Monday following the announcement that non-OPEC producers would contribute to the already agreed upon OPEC cuts. On Saturday, eleven non-OPEC producers committed to 558 MBbl/d of production declines over the first half of the year. Russia is expected to contribute 300 MBbl/d of the cuts by the end of March. It is prudent to keep in mind that Russia is agreeing to cutting from near record high production volumes at a time when some of their fields go into maintenance mode. Outside of Kazakhstan and Oman, who were expected to grow production prior to committing to the cuts, the rest of the producers agreeing to the cut were largely in decline mode. Hence, their contributions are merely a formalized restatement of their already naturally declining volumes. The IEA report on Tuesday featured mixed bullish and bearish signals. On the bullish side, the IEA said that the agreement to reduce production by nearly 1.8 MMBbl/d between OPEC and non-OPEC producers could cause a supply deficit of 600 MBbl/d in 1H2017. Also, the IEA raised the 2017 demand forecast by 120 MBbl/d to 1.4 MMBbl/d due to revisions to Chinese and Russian consumption numbers. However, the same report had some bearish signals in it as well. The IEA said that OPEC production had grown to 34.2 MMBbl/d in November, which means that the size of the OPEC cuts need to be 1.7 MMBbl/d to reach the 32.5 MMBbl/d production quota starting in January. OPEC released its own report this morning showing that production had grown to 33.87 MMBbl/d in November, up 150 MBbl/d from their October estimate. Elsewhere, the report that North Dakota production had climbed back above 1 MMBbl/d in October injected some more bearish sentiment into the market. Also, the Federal Reserve’s widely expected decision to raise interest rates will be unveiled today. If the expectation holds, crude oil prices are likely to suffer, as the dollar will become stronger. However, it is important to keep in mind that a higher interest rate is largely factored in to the value of the dollar already. Expect prices to move with market sentiment regarding the success of the OPEC production cuts. Data showing that the quotas are getting harder to implement will force prices to retreat lower. Petroleum Stocks Chart http://everythingshale.com/news/2016/december/14/weekly-petroleum-stocks-121416/ http://everythingshale.com/news/2016/december/14/weekly-petroleum-stocks-121416/ Wed, 14 December 2016 16:21:43 http://everythingshale.com/news/2016/december/13/exxonknew-activists-try-to-make-themselves-relevant-by-attacking-sec-of-state-nominee/ Following the news earlier this morning that the president-elect has decided to nominate ExxonMobil Chairman and CEO Rex Tillerson to be our next Secretary of State, #ExxonKnew activists have been churning out a steady stream of misinformation focused on defaming both the company and the secretary-designate – all with an eye on trying to insinuate themselves into a broader national discussion, into which they’d otherwise have no point of entry. Given all that, we thought we’d take a second to tackle just a few of issues and accusations they continue to throw against the wall: Charge #1: He got an award from Russia! There has been a lot of interest in the Russian government’s decision to award the “Order of Friendship” to Tillerson in 2014. But let’s take a quick look at some of the other folks who have received this honorific over the years, including a few who will be quite familiar to environmental activists. Let’s start with Ban Ki-Moon, Secretary-General of the United Nations (the body that runs the Intergovernmental Panel on Climate Change) who is perhaps the most notable recipient of the award. As the UN leader, Ban Ki-Moon has been spearheading international climate efforts since the 2010 climate conference in Cancun. He most recently headed up the UN Climate Summit in New York, ahead of 2015 Paris climate change conference. Then there’s Jean Chretien , the former Prime Minister of Canada, who ratified the Kyoto Protocol . There’s also the former Archbishop of Canterbury Rowan Williams , who has forcefully lobbied in favor of international climate treaties and wrote a 2014 op-ed titled “The rich West is ruining our planet.” Outside the world of environmental politics, other recipients of the Order of Friendship include entrepreneur Patricia Cloherty , whose extensive resume includes working for presidents of both parties , and holding a host of board positions at institutions including the Columbia University Teachers College , Rockefeller University Council , and being a member of the Council on Foreign Relations . In 2014, she was honored by the New York State Assembly for her contributions to the arts, and she also happens to be a major donor to Hillary Clinton and other Democrats . Charge #2: He opposes sanctions against Russia! There seems to be a bit of confusion on this point as well, with lots of press outlets suggesting that Tillerson and Exxon vehemently opposed the United States’ decision to impose sectoral sanctions on Russia in 2014. But that’s not true either. What the company said it opposed, based on statements it made at the time, were sanctions that weren’t applied in a uniform manner – especially ones that would represent a bad deal for U.S. companies relative to policies put in place by the EU established for European companies. In this case, the sanctions that were imposed by the EU in 2014 contained a provision that allowed agreements previously signed between European companies and Russia to remain in place, essentially banning new contracts from being signed. In contrast, the U.S. sanctions not only banned future agreements, but also included a provision to retrospectively cancel ones that had already been inked. The upshot? While American companies were prevented from doing business in the deepwater and shale-related oil and gas spaces, companies based in Europe, South America and Asia didn’t skip a beat – and were more than happy to commence development activities literally adjacent to the areas where U.S. companies held leases. By the way, Tillerson isn’t the only one who has expressed concerns about unilateral sanctions – many prominent Democrats have as well. In 2001 Vice President Joe Biden said sanctions against India would be “ineffectual” and went on to note, “ The history of unilateral sanctions is hardly encouraging.” FactCheck.org reported in 2013 that Secretary of Defense Chuck Hagel said he “opposed unilateral U.S. sanctions, but he has voiced support for multilateral sanctions, such as those imposed by the United Nations.” Even President Obama originally agreed that multilateral, rather than unilateral, efforts were the way to go. As a December 2011 New York Times piece explained , “Mr. Obama made much of his commitment to a multilateral foreign policy , in contrast to President George W. Bush’s unilateral invasion of Iraq. That, his advisers say, grew out of a conviction the United States needed to work with others and forge consensus to restore its moral standing.” (emphasis added) A July 2012 fact sheet focused on “rallying the international community” and touted, “With President Obama’s leadership, the United States gained the support of Russia, China, and other nations to pass United Nations Security Council Resolution 1929 in June 2010, which created the most comprehensive and stinging international sanctions the Iranian regime has ever faced.” Obama clearly stated in May 2014, “It has been our willingness to work through multilateral channels that kept the world on our side,” Obama said. “This is American leadership. This is American strength.” (emphasis added) This multilateral approach to “rallying the international community” stands in stark contrast to the policy currently being considered by the White House. However, unilateral or not, smart or not, ExxonMobil has followed both the letter and the spirit of the law when it comes to Russian sanctions. As Exxon Mobil spokesman Alan Jeffers put it , “We follow the law. If a law says that a U.S. corporation is not allowed to participate in activities in a particular jurisdiction, that’s what we do.” Charge #3: He doesn’t believe in climate change! With their campaign floundering and failing to receive any real coverage, #ExxonKnew activists have tried to paint Tillerson a climate foe – or when they’re feeling more charitable, “ the best of many evils for Paris deal .” Tillerson has been very clear that he supports action on climate. As Financial Times reported, Tillerson said in an October speech in London, “We share the view that the risks of climate change are real and require serious action,” he said, adding that Exxon had long supported a tax on carbon in preference to the current “hodgepodge” of regulations around the world. Tillerson and ExxonMobil have long backed the Paris climate deal. ExxonMobil called it “an important step forward by world governments in addressing the serious risk of climate change.” ExxonMobil has supported a carbon tax since 2009 calling it the best, least complex and most balanced approach toward reducing greenhouse gas emissions. Over the past year #ExxonKnew activists have tried their best to push the argument that ExxonMobil somehow knew about climate change in the 1970s and 1980s but kept those findings secret. The allegations have been completely debunked given the fact that the company’s research has been in the public domain for decades. ExxonMobil has been invested heavily in climate research for over 30 years and the company’s scientists have produced more than 50 peer reviewed papers spanning from the 1983 to 2014.  Scientists from ExxonMobil have been involved with the U.N. Intergovernmental Panel on Climate Change (IPCC) science since its inception, even contributing five different sections to its Third Assessment Report .  Some of ExxonMobil’s other important efforts include working with MIT on climate modeling, developing lower-emission solutions alongside researchers at Stanford University, and working with the U.S. Department of Energy and many others on a number of climate projects. All of this research is either online or in libraries, and fully accessible to the public. As EID’s video clearly shows, the articles by InsideClimate News and the Columbia School of Journalism, which tried to push this #ExxonKnew argument,  cherry-picked some facts, and ignored others, to produce a completely distorted view of the company’s work on climate change. Charge #4: He has all these conflicts of interest! Some commentators are worried that Tillerson’s appointment to the nation’s top diplomatic post would pose a conflict of interest, as many of his actions as Secretary of State could have a direct impact on Exxon. But Tillerson isn’t the first wealthy American to be appointed to a cabinet-level position and there are plenty of well-established procedures in place for avoiding these conflicts. Robert Rubin, President Bill Clinton’s Treasury Secretary from 1995-1999, spent 26 years at Goldman Sachs, accruing a net worth of roughly $100 million . According to the New York Times , “When he entered Government service in early 1993, Mr. Rubin put his assets, most of which consisted of partnership shares in Goldman, into a blind trust.” This removed any potential conflict of interest, as the owner of a blind trust does not know how their assets are managed and distributed. George W. Bush’s final Treasury Sectary, Henry Paulsen, had previously served as the Chairman and CEO of Goldman Sachs, amassing over $700 million by the time he was appointed Treasury Secretary. He divested about $500 million worth of Goldman Sachs stock in order to avoid any conflicts. More recently, President Obama’s current Commerce Secretary, Penny Pritzker, is the heir to the Hyatt Hotels fortune. She’s worth about $2.5 billion and owns nearly 8 percent of Hyatt’s stock. To secure her confirmation, Pritzker promised to resign from Hyatt, though she was able to keep her Hyatt stock. Tillerson is said to own 2.6 million shares of ExxonMobil stock and he may have to divest that stock before being sworn in. But the point is there is precedent for all this. Charge #5: He faces “uphill battle” for folks’ approval! Tillerson has received wide, bipartisan support. In fact, one of the leaked emails from the Clinton campaign shows that the Clinton Foundation had high praise for Tillerson’s education advocacy and considered asking him to speak at the 2012 Clinton Global Initiative plenary sessions.  From the leaked memo : “Tillerson chairs the Business Roundtable’s Education group and has been prominently supportive of some of Duncan’s chief priorities, including teacher training, STEM education, and workforce development. As CEO, he has led major investments in education across the country, especially in educating girls.” Support for Tillerson among unions is also notable. North America’s Building Trades Unions put out a press release noting, “For almost a decade, North America’s Building Trades Unions have had the opportunity to work closely with Rex Tillerson in his current capacity as the Chief Executive Officer of Exxon Mobil.  During that time working directly with him, and also in conjunction with the Oil & Natural Gas Industry Labor-Management Committee, Mr. Tillerson demonstrated a strong intellect, a resilient and dynamic grasp of both global and domestic policy issues, and a deep and unyielding sense of patriotism for our great nation. “Rex Tillerson has successfully shepherded Exxon Mobil through very tumultuous times in terms of global geo-politics.  With his intellect, his wit, and his deep understanding and knowledge of the world as it exists today, we believe he will be a tremendous success as Secretary of State, and we offer our full support for his confirmation.” The United Nations Foundation praised Tillerson for his commitment to their goals of reducing disease and increasing opportunities for girls and women: “The United Nations Foundation looks forward to working with Rex Tillerson, if confirmed, to advance strong leadership at the United Nations to further our principles as Americans and tackle global challenges…In 2011, the UN Foundation recognized Rex Tillerson for ExxonMobil’s commitment to help meet the UN’s goals of substantially reducing deaths from malaria and increasing economic opportunities for girls and women. These efforts are examples of the positive effects that multinational corporations can have when they align their business interests with global development priorities.” David Goldwyn, the State Department’s top energy diplomat under President Barack Obama, noted Tillerson’s climate credentials saying , “If there is a chance of having a rational voice at the table on Paris, on climate, on investing in innovation and keeping the United States at the front of … clean energy technology innovation and not taking us out of the conversation, I think we have a good chance that Mr. Tillerson would be a rational voice in that conversation.” Former Secretary of State Condoleezza Rice said , “Rex Tillerson is an excellent choice for Secretary of State.  He will bring to the post remarkable and broad international experience; a deep understanding of the global economy; and a belief in America’s special role in the world. “I know Rex as a successful business man and a patriot.  He will represent the interests and the values of the Unites States with resolve and commitment.  And he will lead the exceptional men and women of the State Department with respect and dedication. I look forward to supporting Rex through the confirmation process and then welcoming him to the family of Secretaries of State.” Robert Gates, Former Secretary of Defense praised Tillerson saying, “I strongly endorse the President-Elect’s selection of Rex Tillerson to be the next Secretary of State.  He would bring to the position a vast knowledge, experience and success in dealing with dozens of governments and leaders in every corner of the world.  He is a person of great integrity whose only goal in office would be to protect and advance the interests of the United States.  While ExxonMobil is one of many clients of RiceHadleyGates Consulting, I met Rex years earlier through our mutual involvement in and leadership of the Boy Scouts of America.  I know this Eagle Scout will be a global champion of the best values of our country.” Former Secretary of State James A. Baker, III, said , “Rex Tillerson, who is a friend of mine, is an excellent choice to head the State Department and has an opportunity to be a very effective Secretary of State. As CEO head of one of the world’s largest and best-run companies, has demonstrated the management and negotiating skills, and has the international experience, that are required for the job.  Further, I am confident he will understand the global challenges facing the United States and has the intellect to address them.  I first expressed my support for Tillerson’s nomination to members of President-Elect Donald Trump’s transition team on Monday afternoon, Dec. 12, when they reached out to me about the possibility of a Tillerson nomination.” These are just a few in a long list of bipartisan endorsements.   http://everythingshale.com/news/2016/december/13/exxonknew-activists-try-to-make-themselves-relevant-by-attacking-sec-of-state-nominee/ http://everythingshale.com/news/2016/december/13/exxonknew-activists-try-to-make-themselves-relevant-by-attacking-sec-of-state-nominee/ Tue, 13 December 2016 23:41:52 http://everythingshale.com/news/2016/december/13/starupdatestar-epa-finalized-groundwater-report-reinforces-no-widespread-systemic-impacts-from-fracking/ UPDATE (12/13/16, 3:43 EST) In yet another sign EPA’s word changing in its final groundwater report was driven by politics rather than science, EPA Deputy Assistant Administrator Thomas Burke admitted when pressed by Wall Street Journal reporter Amy Harder that documented number of cases of water contamination from fracking-related activities is indeed small — even though language from the draft report stating cases of contamination “were small compared to the large number” of fracked wells was taken out of the final report . From the Wall Street Journal , When asked, Mr. Burke did reiterate the report’s earlier findings that the EPA found only a small number of cases of contamination but stressed the lack of data. “While the number of identified cases of drinking water contamination is small , the scientific evidence is insufficient to support estimates of the frequency of contamination,” Burke told the Wall Street Journal. “Scientists involved with finalizing the assessment specifically identified this uncertainty in the report.” (emphasis added) Of course, there’s absolutely no difference between saying the “number of identified cases of drinking water contamination is small” and there are “no widespread, systemic impacts.” — Original Post December 13, 2016 — Today, the Environmental Protection Agency (EPA) released the final results of its long awaited groundwater study. While the agency made some wording changes to its previous topline finding, the data have not changed. This study took five years to complete, and in that time EPA found nothing to suggest that fracking is a serious risk to groundwater. Because of this, the report only reinforces what EPA found previously – that “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.” If fracking were a major threat to drinking water supplies, the data gathered by EPA would show it – but they don’t. If fracking were contaminating water on a widespread level, the evidence would also have been found in the dozens and dozens of peer-reviewed studies that have been conducted over the past decade. So perhaps contrary to its intention, EPA’s study officially closes the book on the environmental activists’ deliberate misinformation campaign. Politics over science — no lack of data   Having said that, it’s clear that EPA did its best to inject politics into this good news by inflating concerns about groundwater, no doubt as a parting thank-you gift to the “Keep It In the Ground” movement. EPA spent five years and at least $33 million in taxpayer dollars on this study, and now after initially claiming in their draft report that they had completed the “most complete compilation of scientific data to date,” they’re saying there are “gaps” in the data that preclude them from making a definitive statement. If the most comprehensive report to date was unable to find systemic impacts to groundwater that is evidence that there’s an absence of impact to groundwater. Further, the claim that EPA didn’t have access to enough data has been thoroughly debunked in an opinion by Walt Hufford, a member of the EPA’s Science Advisory Board, who said, “There is significant data generated and submitted to the various regulatory agencies which have jurisdictional authority over the Hydraulic Fracturing Water Cycle (HFWC) activities… Factually, the data exist and are available for review.  The EPA may have found the datasets problematic (from a user point of view), given that many regulatory programs are not digitized or electronic in nature and cannot accept electronic submittals… the amount of information available associated with HFWC is extensive.  Any suggestion that data is generally unavailable or insufficient leads to misconceptions that the data does not exist .” (emphasis added) Background on Science Advisory Board process – asked EPA to prove a negative When EPA began this investigation five years ago, activists hoping to capitalize on Josh Fox’s fraudulent flaming hoses , claimed that they were looking forward to the results. In a March 19, 2010 a New York Times article quoted Natural Resources Defense Council’s (NRDC) Amy Mall in an article saying, “We are very pleased that the EPA is responding to families across the country who are concerned that oil and gas development is contaminating their drinking water” and “ we eagerly await the results  [of the EPA study].” (emphasis added) After heralding the research at its inception, five years later they completely changed their tune, downplaying the forthcoming report, likely due to what it would conclude. In fact, in a March 2015 InsideClimate News article, Briana Mordick of NRDC said , “Our expectations are low about getting anything conclusive about whether the risks with fracking are insurmountable or manageable.” A few months later, EPA released its draft report , which found that impacts to groundwater from fracking were not widespread or systemic. It wasn’t long before Keep-It-In-The-Ground activists like Mark Ruffalo, Josh Fox, and members of Food & Water Watch, NRDC, the Sierra Club, among other groups, launched into outright science denial and began an effort to lobby the agency’s Science Advisory Board (SAB) into pressuring EPA to change its topline finding. In the months that followed, the SAB held numerous teleconferences and produced several 100-plus page draft recommendations. Yet not one of these drafts provided any shred of evidence to counter EPA’s topline finding. In March, 2016, SAB member Walt Hufford authored an opinion that was included within SAB’s draft recommendations, which clearly states, “The statement by the EPA in the draft Assessment Report issued in June, 2015, is clear, unambiguous, concise, and does not need to be changed or modified….The major conclusion by EPA in their June 2015 draft Assessment Report stating “ no widespread, systemic impacts on drinking water resources in the Unites States”  is accurate, unambiguous, and supportable with the facts EPA has reviewed.” SAB panel members John V. Fontana and Drs. Stephen W. Almond and Shari Dunn-Norman joined Hufford in the opinion, but they weren’t the only ones who agreed with him. During  one of the teleconferences , SAB members Dr. Stephen Randtke and Dean Malouta said that they were considering joining the dissenting opinion. Although neither ended up doing so, Randtke said during the teleconference that he agrees with EPA’s topline finding and has “no trouble with it.” He went on to say, “I agree with kind of the whole statement as EPA has stated it. I think it’s a very good one.” SAB member Dr. Abby Li  expressed concern  that the media and the public may misinterpret the SAB’s draft recommendations as stating that EPA’s topline finding is unsubstantiated, which was not what she believed most members of the SAB were trying to say. Without evidence to the contrary, the SAB did not ask EPA to change its topline finding. Instead, it made a request that borders on the absurd: it asked the agency to  prove that there aren’t  widespread, systemic impacts to groundwater from hydraulic fracturing – in other words, to prove a negative. The section of the recommendations that especially illustrates this occurs when the SAB requests EPA alter its finding that fracturing fluid spills haven’t impacted groundwater because “this major finding is supported only by an absence of evidence rather than by evidence of absence of impact.” The fact that EPA spent five years to compile the most comprehensive report to date is indeed evidence of absence of impact. Science overwhelmingly finds no widespread, systemic impacts EPA’s finalized report comes only a few weeks after the Wyoming Department of Environmental Quality (WDEQ) closed the books on one of the most high profile contamination cases – Pavillion, Wyoming – finding in its final report that fracking was not to blame: “Evidence does not indicate that hydraulic fracturing fluids have risen to shallow depths utilized by water-supply wells. Also, based on an evaluation of hydraulic fracturing history, and methods used in the Pavillion Gas Field, it is unlikely that hydraulic fracturing has caused any impacts to the water-supply wells.” Catalyst Environmental Solutions recently released a  new report  finding EPA’s topline conclusion in its draft report – that “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources” – is the product of sound science. As the  report explains , “ if a significant correlation between impaired drinking water resources and hydraulic fracturing existed, EPA would have identified it; however, the results did not support this finding. ” Researchers at the  University of Cincinnati  recently took samples before, during and after shale development and found no groundwater contamination from fracking. As lead researchers Amy Townsend Small put it , “There was no significant change in methane concentration over time, even as more and more natural gas wells were drilled in the area.” In a study by the U.S. Energy Department’s National Energy Technology Laboratory, which the Associated Press called a  “landmark study,”   researchers injected tracers into the hydraulic fracturing fluid in a well in Greene County, Pa., to track for any signs of possible migration. After 12 months of monitoring, the researchers found “no evidence of gas migration from the Marcellus Shale.” University of Texas at Austin researchers published a study that looked at  784 freshwater wells in the Barnett, Haynesville, Eagle Ford and Delaware Basin shale plays in Texas found the presence of high dissolved methane concentrations in the wells “are likely natural” and not related to fracking. A study by California Council on Science and Technology concluded, “We found no documented instances of hydraulic fracturing or acid stimulations directly causing groundwater contamination in California.” Yale researchers released a study in the Proceedings of the National Academy of Sciences, concluding, “We found no evidence for direct communication with shallow drinking water wells due to upward migration form shale horizons.” Studies by the  U.S. Geological Survey , the  Government Accountability Office , the  Groundwater Protection Council ,   Federal Institute for Geosciences and Natural Resources , MIT – and the list goes on and on – have found fracking is not a credible threat to drinking water. Case closed If there were any evidence to suggest widespread, systemic impacts to drinking water from hydraulic fracturing, it would have been uncovered in EPA’s five-year study and during the past decade of extensive research. It most certainly was not and EPA’s report reflects that. This is last chapter of a long saga, through which anti-fracking activists have persisted in science denial – but the facts and the science are clear, even in this politically charged EPA report.     http://everythingshale.com/news/2016/december/13/starupdatestar-epa-finalized-groundwater-report-reinforces-no-widespread-systemic-impacts-from-fracking/ http://everythingshale.com/news/2016/december/13/starupdatestar-epa-finalized-groundwater-report-reinforces-no-widespread-systemic-impacts-from-fracking/ Tue, 13 December 2016 18:34:25 http://everythingshale.com/news/2016/december/13/african-energy-economist-subsidizing-nigerian-inefficiency/ Fuel subsidies in Nigeria remain a thorny issue. State support for gasoline and diesel prices, both directly at the pump and through subsidies for fuel imports, places a huge burden on the national finances. A government report calculated that $8 billion out of total federal state expenditure of $22 billion in 2013 was spent on fuel subsidies. Much of that subsidized fuel does not even benefit Nigerians, as it is smuggled across the border into neighboring states where prices are higher. The lower price of oil this year means that the current bill is likely to be much less, but the government’s ability to continue paying out is also greatly reduced. Nigeria is entering what will be its first recession in 25 years and remains as reliant on hydrocarbon revenues as ever. It has to curtail spending and support economic diversification, so the subsidies surely have to go. Successive governments have sought to increase fuel prices, often very clumsily, but have been forced to backtrack by national strikes. On some occasions, prices have more than doubled overnight. It is almost as if the government were actually trying to fail. The popular view is that cheap fuel is one of the very few things that the bulk of the population can expect from their government. Raising prices would also stoke inflation. Many politicians are so keen to secure popular support and depress inflation that they want to increase subsidies. On November 30, the House of Representatives voted for a maximum gasoline price of N70 ($0.29) a liter. Current prices vary, but all are above that level. The Senate and president need to agree before the measure is implemented, but the vote highlights political sentiment in the country. In the long term, a massive cultural change is needed. The population needs to have some expectation that the state can manage its finances for their benefit. In addition, the view needs to change that wealth can only be secured by tapping the oil industry, whether by working in the sector, working in government or in the countless forms of petro-crime that permeate Nigerian society. More immediately, the government can also help to address the fuel import situation. Nigeria has four state-owned refineries that have either been out of use or operating at reduced capacity for the past 15 years. At the same time, vast amounts of money are made by importing refined petroleum products, including through scams such as round tripping, which involves physically importing the same consignment of fuel more than once. As a result, there are vested interests in keeping the refineries out of action. Plans for refinery privatization and the construction of new plants are regularly drawn up and then dropped. Apart from anything else, potential investors are put off by the subsidy regime. As so often, including along the coast in Ghana and Cote d’Ivoire, refineries have historically operated at a loss. Refiners won’t invest unless they have some confidence that they can generate a reasonable return. The post African Energy Economist: Subsidizing Nigerian inefficiency appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/13/african-energy-economist-subsidizing-nigerian-inefficiency/ http://everythingshale.com/news/2016/december/13/african-energy-economist-subsidizing-nigerian-inefficiency/ Tue, 13 December 2016 16:11:42 http://everythingshale.com/news/2016/december/13/wolfcamp-the-gift-that-keeps-on-giving/ Probably NO ONE in our business has escaped hearing about the USGS announcement of nearly 20 Billion barrels of recoverable oil encased in the Midland basin’s various members/benches of the Wolfcamp/Cline/Spraberry. To quote the USGS: “The Wolfcamp shale in the Midland Basin portion of Texas’ Permian Basin province contains an estimated mean of 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey. This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources. The estimate of continuous oil in the Midland Basin Wolfcamp shale assessment is nearly three times larger than that of the 2013 USGS Bakken-Three Forks resource assessment, making this the largest estimated continuous oil accumulation that USGS has assessed in the United States to date.” https://www.usgs.gov/news/usgs-estimates-20-billion-barrels-oil-texas-wolfcamp-shale-formation Of course, to many old hands in Midland , saying that the Wolfcamp is chock full of oil is like saying the sun is going to rise tomorrow—a fact known to those who have been getting their hands dirty in the Permian for the last 60 years. But to have the USGS affirm that knowledge with a large, large number for both oil and gas –well, that grabs everyone’s attention, not just folks who hang out at the Wall Street bar in Midland. The techniques and technology improvements wrought by several generations of unconventional shale plays have laid the foundation for this upgraded resource assessment. To be sure, the resource is vast, and the value compelling, but as we have cautioned in other posts, reservoir geology and facies distributions across basins can and WILL change—- a lot! There is ambiguity about facies correlations across the basin, what targets are time equivalent as flooding surfaces, and even whether picks on the Wolfcamp D across the basin are time equivalent. The logs below from different parts of the Midland Basin illustrate the correlation difficulties: Source: DI Geology Given enough time (and therefore well control) correlation ambiguities will be resolved ( BTW, this is one of the great benefits of individual ownership of minerals—multiple drilling experiments leading to an improved knowledge base). Before ANYONE starts turning to the right, they have to know what their leases allow them to drill. If you’re farming into another company’s acreage, or buying a company’s acreage position, you can take some comfort in a well written drill site title opinion. But if any of the lease language contains phrases like “to the base of the Wolfcamp C” or “ no deeper than 100’ below the base of the Permian…” there will be ambiguities regarding mineral rights that need to be understood and accounted for. Luckily the cavalry just arrived…in the form of DI courthouse. Of course, whenever I think of cavalry I am always reminded of the 7th Cavalry’s march song Garryowen https://www.youtube.com/watch?v=gaPk9yYWQcM). Very stirring and uplifting—just like being able to create runsheets from your desk using DI Courthouse 2.0 We’ve enhanced/added coverage in the counties shown in the map. So your land professionals can efficiently develop the leasing picture that they need to in support of the E&P objectives that you have. Download the coverage map of Wolfcamp counties that you can access in DI Courthouse. Access Wolfcamp Coverage Map Discover whether an anticipated lease acquisition is appropriately precise in its lease language to save you from those 2 a.m. “…X%&&#…didn’t think about that” moments of lease anxiety. Thoughts? Your turn to comment below. http://everythingshale.com/news/2016/december/13/wolfcamp-the-gift-that-keeps-on-giving/ http://everythingshale.com/news/2016/december/13/wolfcamp-the-gift-that-keeps-on-giving/ Tue, 13 December 2016 16:00:22 http://everythingshale.com/news/2016/december/13/what-could-65b-wti-mean-for-oil-production-in-the-permian/ Clearly, the alleged deal between OPEC members and other cooperative nations has generated a fair amount of optimism among market participants. However, given so many unknowns and the near term mentality of the agreement, what the future may hold with respect to production and prices is, to say the least, a moving target. Nonetheless, as prices are expected to rise, there is upside potential for production and internal rates of return (IRR), particularly in premier basins like the Permian. To no surprise, the Delaware and Midland basins in the Permian are generating some of the best returns in the country. Platts Bentek’s Well Economics Analyzer estimates that the IRR for a typical well in the Permian Delaware is currently 37% and is generating the best returns in North America. Let’s assume the stars align and OPEC along with cooperating countries are compliant with supply cuts and prices reach $65/b; what does this mean for IRRs in the Permian? If this scenario were to play out, returns in the Permian Delaware would increase 14 percentage points to 51% IRR, holding regional price differentials constant. Well economics in the Delaware surpass those of competing plays with a robust oil initial production (IP) rate of 575 b/d, $6.0 million estimated drilling and completion (D&C) cost and a production mix that is heavily weighted towards oil at 76%. Not only that, the Delaware’s proximity to demand centers in the US Gulf Coast area and the overall quality of the barrel set it apart from the rest of the herd. In the neighboring Midland basin, the second most profitable play in North America, returns are currently 34% and would jump to 48% at $65/b WTI. Oil IP rates in the Midland are roughly 100 b/d below those in the Delaware. However, on average, the play enjoys a D&C cost of $5.5 million, half a million dollars less than the Delaware and also reaps the financial benefit associated with proximity to refining centers along the Gulf Coast. So what does $65/b WTI mean for production in the Permian? Platts Bentek estimates total Permian crude production will average a little less than 2 million b/d in 2016. However, given $65/b crude prices, production has the ability to increase 120,000 b/d in 2017. From a strictly quantitative standpoint, this estimate is more than reasonable. However, in reality, this estimate is rather conservative given accelerating efficiency gains and a vast inventory of drilled but uncompleted wells. Read more about what OPEC output cuts could mean for US producers .   The post What could $65/b WTI mean for oil production in the Permian? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/13/what-could-65b-wti-mean-for-oil-production-in-the-permian/ http://everythingshale.com/news/2016/december/13/what-could-65b-wti-mean-for-oil-production-in-the-permian/ Tue, 13 December 2016 05:01:51 http://everythingshale.com/news/2016/december/12/rfs-still-broken-still-in-need-of-action/ Fourteen months ago, during a U.S. Senate hearing on the Renewable Fuel Standard (RFS), EPA was asked to explain how it decides how much ethanol will be blended into the nation's fuel supply each year under the agency's RFS authority. You can read about that conversation here , but the gist of the exchange is that EPA's RFS assumptions are largely based on subjective judgments about consumers and the fuels marketplace. The history of the RFS is that EPA's enthusiasm for the program has seen the agency mandate ever-increasing volumes of ethanol in the fuel supply, potentially putting consumers at risk by pushing fuels into the marketplace that could damage the engines of vehicles , motorcycles , boats and small power equipment . At the same time the RFS' original purpose of developing a commercially viable, national supply of cellulosic biofuel has become submerged in a growing ocean of corn ethanol. In short, that's where America and the RFS stand today after EPA recently issued ethanol requirements for 2017 that could breach the refining blend wall†the point at which the RFS forces more ethanol into the fuel supply than can be safely blended as the E10 gasoline that's standard across the country. API calculates the 2017 volumes would put the ethanol-to-gasoline ratio at 10.4 percent. That's higher than the 9.7 percent recommended by API both to avoid crashing through the blend wall and to preserve a place in the overall supply for ethanol-free gasoline , which significant numbers of consumers want. A couple of charts. Below, EPA's ethanol-use requirements since 2014, which shows a steadily climbing government mandate: In the chart below we see the increasing size of corn ethanol in the overall RFS mandate (yellow bar), compared to the original volumes set by Congress in 2007 (orange bar) and EPA's preliminary proposal for each respective year (green bar): In past years EPA has used its authority to waive the statutory volume, as it recognized lower fuel demand. The agency's 2017 draft indicated it would waive the statutory target for next year as well, but the finalized rule backtracked from that. There's another new development. A pair of U.S. Government Accountability Office (GAO) reports this week that say advanced and cellulosic biofuels again, one of the original purposes of the RFS was to develop these are unlikely to reach the RFS' increasing targets. GAO : Cellulosic biofuels-specifically cellulosic ethanol and renewable natural gas from landfills-are also technologically well understood, according to experts, but current production is far below the volume needed to meet the target for these fuels. Specifically, in 2015, about 142 million gallons of cellulosic biofuel overall-including about 2 million gallons of cellulosic ethanol and about 140 million gallons of renewable natural gas-were produced. This cellulosic biofuel volume was less than 5 percent of the statutory target of 3 billion gallons. According to experts, there is limited potential for expanded production of cellulosic ethanol in the next 5 years to meet the higher volumes called for in the statute. Frank Macchiarola , API downstream group director, said the GAO reports show that the ethanol mandate isn't working: The GAO concluded the RFS is broken, and we agree. … A decade ago, the ethanol mandate was created in response to falling domestic energy production and rising crude imports that reality no longer exists. The U.S. is now leading the world in production of oil and natural gas and in the reduction of carbon emissions, which are near 20-year lows. This success is achieved through market-based solutions, not top-down mandates that pick winners and losers.†Macchiarola said there's bipartisan support in Congress and broad support in the country for repeal or significant reform of the RFS: An ever-increasing number of Americans are urging policymakers to fix the broken RFS mandate. The market has shown that the RFS is outdated, and an increasing chorus of Republicans and Democrats understand that the policy is broken and that there is a real opportunity for reform.†The GAO reports and the trajectory of ethanol mandates in EPA's latest mandates argue for action. API supports bipartisan reform legislation in the House to address the RFS program's numerous dysfunctions. U.S. voters have spoken up, 77 percent of them in a recent poll expressing concern about government requirements to increase ethanol in gasoline. It's past time to act on the broken RFS. By Mark Green  Originally posted December 2 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/december/12/rfs-still-broken-still-in-need-of-action/ http://everythingshale.com/news/2016/december/12/rfs-still-broken-still-in-need-of-action/ Mon, 12 December 2016 17:00:21 http://everythingshale.com/news/2016/december/12/the-effectiveness-and-future-of-western-sanctions-on-russia-fuel-for-thought/ Western sanctions against Moscow have hurt the Russian economy and restricted some energy projects, but they have failed their main objective of persuading President Vladimir Putin to change his policy in Ukraine. It will continue to have a limited impact unless they are made tougher, the Atlantic Council argued in study released last week. Sergey Aleksashenko, former deputy chairman of the Russian Central Bank and former chairman of Merrill Lynch Russia, said in the report that tighter restrictions could include imposing an embargo on the purchase of crude from Russian state-owned companies, banning Western companies from buying or trading Russian LNG, and making it harder for Russian state-owned companies to use Western technology. “Even if Russia is able to sell its oil elsewhere, it will cost it more to do so, correspondingly reducing the financial resources of Putin’s regime,” Aleksashenko wrote. The EU is expected to vote this month on renewing sanctions that expire January 31. US president-elect Donald Trump will then be able to decide whether to sign executive orders extending sanctions in March and again next summer. But uncertainty is building on both sides of the Atlantic. Trump repeatedly praised Putin during the US elections and urged closer cooperation on geopolitical issues like ISIS. French center-right presidential candidate Francois Fillon has called for lifting the sanctions and partnering with Russia to fight immigration and terrorism. The energy sector sanctions prevent Western companies from providing technology for Arctic, deepwater or shale oil exploration and production. This measure froze six major joint ventures that Western producers ExxonMobil, Total and Shell were pursuing with Russian companies. The restrictions took a costly toll on the joint ventures, with ExxonMobil CEO estimating the hit to its plans at $1 billion. And yet Russian oil production has not suffered. Output rose 147,222 b/d from 2014 to 10.73 million b/d in 2015, despite an International Energy Agency estimate that it would fall 80,000 b/d. Growth has continued this year, averaging 10.91 million b/d from January-October, S&P Global Platts has reported. Output grew despite sanctions Russia’s deputy energy minister Kirill Molodtsov said November 9 that production has the potential to grow to 11.15 million-11.25 million b/d by 2020. “Russian companies have benefited from the ruble devaluation and managed to ramp up production and exports each quarter since 2014,” Aleksashenko said. At the same time, Russian refiners have made significant investments to increase refining depth — a measure of efficiency used mostly in Russia — to 75% this year, from 71.5% in 2013, the report said. They aim to reach the EU average of 85% by 2020, which will lead to higher production and more oil product exports. The sanctions have left plenty of leeway for Russia’s energy sector to find legal workarounds, said Elizabeth Rosenberg, director of the energy, economics and security program at the Center for a New American Security and a former treasury department senior adviser. “These sanctions were never designed to collapse the Russian economy,” she said. “They’re designed to be narrow and targeted.” Rosenberg gave the example of the ban on Western assistance in shale development. “How much of Russian energy production that affects turns on how you understand that term,” she said of shale. “In fact, the way it is defined is very narrow and it could have been defined in a much broader way, which would have had a much bigger effect on Russian energy production.” So will the US and EU renew these sanctions before they expire early next year? Rosenberg and other sanctions experts who helped the Atlantic Council roll out Aleksashenko’s report predicted they would. John Herbst, a US diplomat for 31 years, former ambassador to Ukraine and now director of the Atlantic Council’s Eurasia program, said many signs point to the US keeping up pressure on Russia: bipartisan motivation within Congress to enact legislation if needed, Trump’s national security team, and the fact that the issue is of no real importance to the success of Trump’s presidency but could get in the way of its success if things go sour. Herbst also brushed off predictions that Trump would cave in to Putin’s demands out of an affinity for the Russian leader. “Keep in mind that he fancies himself a dealmaker,” he said. “What type of triumph is that for Trump the dealmaker?” Watch our Snapshot video: Glencore makes bold move with splash into Rosneft The post The effectiveness and future of Western sanctions on Russia: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/12/the-effectiveness-and-future-of-western-sanctions-on-russia-fuel-for-thought/ http://everythingshale.com/news/2016/december/12/the-effectiveness-and-future-of-western-sanctions-on-russia-fuel-for-thought/ Mon, 12 December 2016 12:00:03 http://everythingshale.com/news/2016/december/12/week-ahead-gas-price-gains-expected-to-slow-down-this-week/ CRUDE OIL Inventory levels for crude oil decreased 2.4 MMBbl last week as reported by the EIA. The gasoline and distillate inventories rose by 3.4 MMBbl and 2.5 MMBbl respectively. In total, petroleum inventories increased 1.4 MMBbl. The EIA report also showed a decline in US production of 2 MBbl/d from the previous week and imports increased 755 MBbl/d to an average of 8.3 MMBbl/d. The report was perceived as bearish, with the builds in gasoline and distillate offsetting the crude withdrawal. Several other issues provided some bearish bias and a pause for traders to assess last week: 1) OPEC production increased in November to 34.19 MMBbl/d from 33.82 MMBbl/d in October according to a Reuter’s survey. If the increase is confirmed by official OPEC and IEA releases, the OPEC production target of 32.5 MMBbl/d will become harder to attain as the size of the cuts must be larger. 2) Libya and Nigeria were exempt from the quotas and they each have significant offline production (compared to recent and historical levels) that could come back on line. Increases from either country will depend on their ability to maintain political stability, and avoid terror attacks on key crude production and export infrastructure. Nigeria has already said they hope to boost production by 200 MBbl/d in January. 3) Regardless of the quota news, Saudi Arabia continues to fight for market share as Aramco cut their selling price to Asia for January. It remains to be seen if the focus will shift to Asian market share in lieu of exports to the US (given the recent increased exports from Russia to China), or if Saudi Arabia will pursue both markets. 4) Baker Hughes reported a large rise in the rig count as 27 rigs were added. The rise shows the flexibility of shale producers to make moves when prices permit, but the production associated with the higher rig count will come with a lag. OPEC and non-OPEC members met on Saturday to finalize a deal for countries outside of the cartel to contribute 558 MBbl/d to the cuts. Russia will reduce production by 300 MBbl/d from the October high of 11.247 MMBbl/d gradually over the coming months. Russia is targeting a production level of 10.947 MMBbl/d at the end of March. Beside Russia, Kazakhstan and Oman have also agreed to cut 20 MBbl/d and 45 MBbl/d respectively. The rest of the countries involved in the talks were not expected to grow production and were already facing natural declines. The agreement for those countries simply puts the natural decline numbers on paper. The deal is bullish for prices, as this is the first deal of its kind between OPEC and non-OPEC participants since 2001. The combined cuts, if successful, would take at least 1.758 MMBbl/d out of the market by the end of 1Q2017. As discussed here last week, prices consolidated during the week and volatility declined well below the prior week. The rising price movement from November 30th to December 6th was fueled primarily by the reduction in short interest and addition to length by the managed money segment of the market, according to the latest CFTC report. These two components provided nearly 84,000 contracts of buying (4% of total open interest). With price action calming last week post OPEC actions, the high side of the new WTI price range was established at $52.42/Bbl below the highs from July 2015 between $53.89/Bbl and $55.34/Bbl. As of this writing, the 2015 highs are already being tested with prompt month trading near $53.75 on the non-OPEC production cut news from Saturday. Despite this new higher price test, expect doubts about the quota agreement and the other bearish fundamental issues to limit the market’s ability to garner the support necessary to remain at these levels this week. Should the expectations of the market grow concerned about the quotas and the adherence to the deal, then initial declines to $48.00/Bbl should be expected and possibly, down to $46.00/Bbl. NATURAL GAS Natural gas production losses of 800 MMcf/d week-on-week were partially offset by gains in Canadian imports of 500 MMcf/d. Some of the declines in production can be linked to freeze offs as significant temperature drops occurred in the Rockies and Mid Continent. With even colder temperatures coming this week, additional production declines are expected, particularly in the Northeast as the colder temperatures expand into the region’s supply area. Total demand rocketed last week with the cold temperatures and reached some of the highest levels since last February. Most of the gains were in the Res/Com sector (gaining an average of 10.2 Bcf/d), however, power demand also rose over 2 Bcf/d week-on-week as the cold temperatures hit TX and the Gulf area where some of the homes rely on electric heat. Price action continued the previous week’s bullish bias, closing higher for the week and at levels not seen since Dec ’14. The recent run has extended the momentum indicators into the extreme over bought levels. While the gains can continue, there will eventually need to be a period of either consolidation or slight correction. The bullish run though, has shown no indication of being ending as the gains since the Thanksgiving holiday have occurred with increasing volume and open interest, indicating higher prices may still be in the future. The gain in open interest is even more indicative of the market’s expectations of higher prices as it has occurred with a reduction in short positions (open interest typically declines when traders are forced to cover short positions) of 37,000 contracts by the managed money segment (speculative community), according to the latest CFTC data. The weather forecasts for the upcoming two weeks remain supportive of further price advances. Three-digit storage withdrawals are expected over the next 4 weeks including a potential 200+ Bcf weekly draw in next week’s release. From a technical perspective, major resistance should limit gains in the near term between $3.93-$4.04. http://everythingshale.com/news/2016/december/12/week-ahead-gas-price-gains-expected-to-slow-down-this-week/ http://everythingshale.com/news/2016/december/12/week-ahead-gas-price-gains-expected-to-slow-down-this-week/ Mon, 12 December 2016 11:00:44 http://everythingshale.com/news/2016/december/09/groundbreaking-study-shows-new-coal-plants-are-uneconomic-in-97-percent-of-us-counties/ At Environmental Defense Fund (EDF), we understand that market forces can drive either a healthy environment or harmful pollution. I recently wrote about how generating electricity often creates pollution, which comes with environmental and health costs that are usually not paid for by the polluters. That's why EDF works to identify and correct market failures, like the failure to understand as well as account for all of the costs pollution imposes on society. The Energy Institute at the University of Texas at Austin (UT) just released a useful tool in that pursuit: a study that aims to capture the full cost of new electric power generation including environmental and public health costs on a county-by-county basis in the United States. The study evolves traditional ways of estimating new generation costs by 1) incorporating pollution costs, and 2) breaking data down to the county level. The results show economics are leading the U.S. to a cleaner energy economy, in which there is no role for new coal plants. Let's break it down. Enhancing the levelized cost method The Levelized Cost Of Electricity (LCOE) method is commonly used to compute the costs of different power sources including fossil fuels and renewables on a comparable basis. The LCOE, expressed on a dollar per kilowatt-hour (kWh) basis, is the estimated amount of money it takes for a particular electricity generation technology to produce a kWh of electricity over its expected lifetime. In its conventional form, the LCOE method does not take into account environmental and public health costs costs external to electricity generation but caused by it. It also does not show the variation in costs of building and operating identical power plants across different geographies. The study provides an improved method that addresses these limitations. The study also factors in siting challenges like water availability and access to fuel that prevent certain plant types from being built in a given county. The UT study presents results in a map format, which facilitates cost comparisons by fuel source, technology, and location. The study team released interactive maps that show the cheapest technology by county, as well as calculators that enable users to compare costs for different scenarios. Key findings The following U.S. map shows the least-cost technology when factoring in siting limitations, and environmental and public health costs. The key displays the number of counties in which each power technology is the least-cost option. The analysis shows: Wind is the least-cost option in the most number of counties. Coal plants are never the least-cost option. Natural gas combined cycle (NGCC) plants are the least-cost option in counties where the wind isn't as strong. Utility-scale solar photovoltaic (PV) plants are the least-cost option in counties where it's particularly sunny and/or there is a lack of cooling water availability, which is needed for thermal generation like coal. When a county faces siting challenges that prevent other technologies from being built, residential solar PV plants (like rooftop solar) are the least-cost option. Put another way, rooftop solar is a viable option in every county; other power sources are not. If you remove the environmental and public health costs from the analysis, the map looks different: Even without accounting for the environmental and public health costs, wind remains the least-cost option in over 1,000 counties that's about one third of U.S. counties. And solar appears on the map nearly five times as much as coal. Caveats Although the study presents an improved way to measure the costs of electricity generation, we should acknowledge its limitations. It does not: Remove the subsidies received by coal and natural gas during the exploration and extraction process, which effectively make fossil-fuel plants appear less costly than they actually are. Account for the uncertainty of future fuel prices and capacity factors for fossil fuel and nuclear plants. Demonstrate the environmental and public health benefits of retiring an existing fossil-fuel plant. As the study states, if emission rates from existing (rather than new) power plants were used, the public health costs would, on average, be 10 times higher. Factor in the costs associated with managing the variability in wind and solar's generation output. Model the implications of the federal Production Tax Credits and Investment Tax Credits for renewable generation technologies, as well as subsidies at the state or local level, which affect investment decisions. (The calculators do allow changes to capital cost assumptions; so therefore, these could be factored in). Consider economic factors other than cost like revenue that also affect investment decisions. Account for the high-level environmental damage risks associated with electricity generation from nuclear, natural gas, and coal as a result of incidents like Chernobyl and Fukushima, Aliso Canyon , and Dan River coal ash spill that cause massive, long-term, acute, and dispersed chronic harm. The Energy Institute study clearly shows the economic viability of wind and increasing prospects for solar. The Energy Institute study clearly shows the economic viability of wind and increasing prospects for solar. Moreover, it provides policymakers and the public with important information on the full cost of electricity for new power sources including the environmental and public health costs such as asthma attacks, premature death, and lung damage resulting  from fossil-fuel pollution. When pollution costs are accounted for, as the UT study shows, coal power plants are not the lowest-cost electricity generation technology anywhere. Even without including environmental and health costs and renewables subsidies, and despite the fact extraction of coal remains subsidized , new coal plants are still not economic in 97 percent of U.S. counties. As we work to fix outdated rules, we know that market forces are helping to clear the way for clean energy progress and cleaner air. By Ferit Ucar  Originally Published on December 8, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/december/09/groundbreaking-study-shows-new-coal-plants-are-uneconomic-in-97-percent-of-us-counties/ http://everythingshale.com/news/2016/december/09/groundbreaking-study-shows-new-coal-plants-are-uneconomic-in-97-percent-of-us-counties/ Fri, 09 December 2016 15:00:22 http://everythingshale.com/news/2016/december/8/bitter-cold-freezes-out-anti-fossil-fuel-protest/ While many Coloradans were likely enjoying the warmth provided by fossil fuels after a night that saw temps drop “as low as minus-11 degrees,” a small group of “Keep It In The Ground” (KIITG)protestors stood in the extreme cold this morning to once-again protest energy development on public lands. Photos courtesy of Western Energy Alliance Carrying signs demanding a ban on fracking and an end to fossil fuel development on public lands, the protestors attempted to capture the attention of the media and commuters on a morning when many Coloradans were likely thankful for heat made possible by fracking. In a sign that even some of the most extreme anti-fracking protestors could have been more interested in staying indoors, the small group of about ten protestors paled in comparison to previous protests held at the Bureau of Land Management (BLM) office in Lakewood, CO, that has been a frequent target of the KIITG activists. The protest, organized by national KIITG activist groups, 350.org and Food & Water Watch, comes on the heels of a series of sweeping defeats for the groups in the state. Earlier this year, Coloradans resoundingly rejected their efforts to place a pair of ban-fracking initiatives before the state’s voters, an effort that was marked by a series of embarrassing missteps, including delivering half-empty boxes that they portrayed as full of petitions in support of their initiatives, and even staging a fake accident where a protestor pretended to be hit by an SUV. While it is clear that the national activist groups behind these efforts are not abandoning their goal to ban fracking, they picked a day to protest the use of fossil fuels when most Coloradans are likely more thankful than ever for the affordable energy provided by domestic energy development. http://everythingshale.com/news/2016/december/8/bitter-cold-freezes-out-anti-fossil-fuel-protest/ http://everythingshale.com/news/2016/december/8/bitter-cold-freezes-out-anti-fossil-fuel-protest/ Thu, 08 December 2016 21:38:42 http://everythingshale.com/news/2016/december/8/market-currents-nopec-hopes-still-alive/ 1) We discussed on Monday how the Kurdistan Regional Government (KRG) is expecting  no major impact  to its crude oil production from the OPEC decision, and how crude from northern Iraq flows through the 600-mile Kirkuk-Ceyhan pipeline before being loaded onto tankers in the Turkish port. The KRG controls ~550,000 bpd, and has indicated that it  doesn’t plan to scale back on production . Iraq needs to cut production by 210,000 bpd to meet its OPEC cut quota, but 90 percent of the crude produced in the non-Kurdish controlled areas is operated by international oil companies. The state-run oil company controls some 440,000 bpd of Iraq’s production, with 280,000 bpd of this in the south. These fields are the ones that are expected to feel the brunt of the OPEC production cut: 2) Italy is the leading destination for Kirkuk crude, accounting for over a third of all exports this year – some 155,000 bpd. Israel is the second most popular destination, while Cyprus is third – despite an absence of deliveries over the last three months. The key takeaway in terms of Iraqi crude flows is that southern grades (i.e., Basrah Light and Basrah Heavy) predominantly head to Asia, while northern grades (Kirkuk) head predominantly to Europe. 3) Timing is everything. Back in late November we discussed how Saudi production is up over 2 million barrels per day since the start of 2011, while Iranian output is flat over the same period. We get a similarly confounding view when we look at OPEC versus non-OPEC production growth since the beginning of 2012. Despite the pullback in U.S. production in the last year and a half, non-OPEC production is still up over 5.5mn bpd, while OPEC production is up 1.44mn bpd. OPEC production was basically flat from 2011 to mid-2015 before taking off, coinciding with non-OPEC moving in the opposite direction. 4) Our ClipperData is cited in this article  about the narrowing contango of the forward curve.  Our ClipperData show  that global floating storage is well over 100 million barrels, but we should see this volume whittled lower should the financial incentive to store crude continue to be erased. The contango needs to be at $3.15 – $3.38/bbl six months out to make a profit after covering the cost of leasing an oil tanker to store the black gold, Texas tea. 5) The cost of leasing an oil tanker is expected to drop further next year, with the industry bracing itself for the worst earnings since 2013 . Rates are now 12 percent lower than they were prior to the OPEC meeting – given the expectation that the decision will lead to higher oil prices, lower demand and less trade. As the chart below illustrates , shipping rates move inversely to prices: 6) Finally, after discussing the prospects of a U.S. Gulf Coast LNG benchmark yesterday, it is particularly interesting to see that 80 percent of global LNG supply this year is priced off an oil index , as opposed to a LNG-based benchmark. Room for change, me thinks. http://everythingshale.com/news/2016/december/8/market-currents-nopec-hopes-still-alive/ http://everythingshale.com/news/2016/december/8/market-currents-nopec-hopes-still-alive/ Thu, 08 December 2016 18:48:21 http://everythingshale.com/news/2016/december/8/weekly-natural-gas-storage-1282016/ U.S. natural gas storage inventories decreased by 42 Bcf during the week ending Dec. 2, per EIA. The 42 Bcf draw was larger than market expectations of a draw in the mid 30s. The withdrawal compares to a 69 Bcf reported last year. The report is bullish and prices increased 4-6 cents following the release although the Jan17 contract is currently trading relatively flat from yesterday at $3.608 MMBtu. See Drillinginfo’s EIA Chart. Working gas storage inventories dropped to 3.953 Tcf, level 1.3% above 2015 and 6.9% above the 5-year average. Inventories remain at record high levels, however, this is about to change. The artic cold temperatures that are covering most of the U.S. have pushed demand up while supply remains flat to down this week. Three-digit storage withdrawals are expected over the next 3 EIA storage reports compared to average 43 Bcf draws last year. Prices are expected to continue its upward trend over the next weeks as demand outpaces supply. http://everythingshale.com/news/2016/december/8/weekly-natural-gas-storage-1282016/ http://everythingshale.com/news/2016/december/8/weekly-natural-gas-storage-1282016/ Thu, 08 December 2016 16:20:14 http://everythingshale.com/news/2016/december/8/glencore-s-purchase-of-part-of-russia-s-rosneft-oil-company-raises-questions/ Oil storage tanks at an oil refinery operated by Rosneft OAO in Tuapse, Russia. (Alexander Zemlianichenko Jr./Bloomberg) MOSCOW - A surprise decision by Russia to sell a fifth of its state-controlled oil company to, among others, a Swiss company has raised questions about the impact of Western sanctions and who is behind the deal. The CEO of Rosneft said late Wednesday that it had agreed to sell a 19.5 percent stake to Swiss commodities giant Glencore and Qatar’s sovereign wealth fund. The move was billed as part of the Russian government’s efforts to unload some state assets to help balance its budget amid a two-year recession caused by a drop in global oil prices and by Western sanctions against Russia. The presence of Glencore in the deal, however, has raised eyebrows since the Russian oil industry is supposed to be off limits for Western investors because of European and American sanctions imposed on Russia. And the terms of the deal are not clear, with an unnamed bank taking a prominent role. Here’s a look at the deal. Why is it a surprise? As part of Russia’s privatization drive, Rosneft was scheduled to sell a chunk of its shares by the end of the year. Rosneft is run by Igor Sechin, Putin’s long-standing ally, who is believed to wield almost unrivalled influence in the Russian energy sector and beyond. Earlier, Rosneft was reported to be inclined toward buying back its own shares instead of raising money through a sale to investors. And before the deal was announced, it was unclear where Rosneft could find a potential investor amid the current unstable market and with the backdrop of Western sanctions. What is Glencore’s role in the deal? Glencore’s participation in the deal came as a surprise since the company is going through difficult financial times and only last year faced doubts about its ability to handle its own debts. Although Rosneft did not disclose Glencore’s role in the deal, the company said in a statement that it would put just 300 million euros ($322 million) of its own money into Rosneft shares. The remainder will be provided by an unspecified bank that neither company would name. Rosneft CEO Sechin said in a meeting with Russian President Vladimir Putin that the deal will be financed by “one of the largest European banks.” What are Glencore’s ties to Russia? Glencore CEO Ivan Glasenberg has become a fixture at the St. Petersburg Economic Forum, an economic gathering that became known as Russia’s Davos. Major Western companies and CEOs shunned the 2014 forum following Russia’s annexation of Ukraine’s Crimean Peninsula and warnings from the U.S. State Department. Glasenberg was one of the few top-level Western executives who attended the forum that year. What about Western sanctions? A few months after Russia annexed Ukraine’s Crimean Peninsula in 2014, both the United States and the European Union imposed sanctions on several Russian oil companies including Rosneft, banning Western firms from supporting their activities in exploration and production from Arctic offshore and shale projects. That put in jeopardy a landmark Arctic drilling project by Rosneft and ExxonMobil as well as dozens of other projects by Russian companies with foreign participation. Several rounds of U.S. and European sanctions in 2014 blocked lending for Russian banks, energy and defense companies and prevented them from accessing equity or debt markets for new long-term lending. The sanctions, however, do not cover owning shares in Russian companies. Rosneft already has a major foreign shareholder - BP, which owns 19.75 percent of the shares. Glencore does not seem to be violating sanctions with the share purchase. The company, however, said in its statement that the deal will offer “additional opportunities, through a strategic partnership for further cooperation, including infrastructure, logistics and global trading.” Helping Rosneft with infrastructure would be a breach of the sanctions, and it is not clear right now how the deal could be implemented in this respect. http://everythingshale.com/news/2016/december/8/glencore-s-purchase-of-part-of-russia-s-rosneft-oil-company-raises-questions/ http://everythingshale.com/news/2016/december/8/glencore-s-purchase-of-part-of-russia-s-rosneft-oil-company-raises-questions/ Thu, 08 December 2016 14:58:26 http://everythingshale.com/news/2016/december/8/bp-boss-bob-dudley-says-firm-will-double-north-sea-production-hails-crown-jewel/ By Rita Brown Energy Voice BP's top boss said the oil major would double its North Sea production as he hailed the region as one of the company's crown jewels.†Bob Dudley sat down exclusively with Energy Voice in his first trip to Aberdeen since 2011. The chief executive said: The North Sea is not only our backyard, it is one of four crown jewels.†The oil major will drill five exploration wells next year and 50 new development wells over the next three. Its production is also set to double by 2020 to 200,000 barrels of oil a day. The increase is in comparison to 2015's output figures. The oil boss said: There's some hope on the exploration program, because any one of those wells or prospects could lead to yet another hub of development. You will see portfolio changes for us in the North Sea, but you may see us invest in other projects as people approach us about joining them. So I think there's a mix, but we should double our production by 2020 from where it was in 2015. We should be over 200,000 barrels a day in 2020 and by then I'm hopeful our exploration program will lead to more things to do.†The operator is expecting first oil from two of its major developments, Quad 204 early next year and Clair Ridge in 2018. It currently has two billion barrels of resource potential in the UKCS, split evenly between its planned production, discovered, and future prospects. BP's production figures have steadily declined since its peak in 2000. However, 2015 marked the start of its five-year turnaround. Production will climb to 209,000 in 2020. The global leader also dispelled the myth†that North Sea industry was over, insisting BP would be pumping oil until 2050. The myth that the North Sea is finished is absolutely that. It's a wrong myth,†he said. There's a demonstration of new activity and new big fields coming on stream. It's not just BP fields. There are others as well, so there's real economic activity that will support thousands of jobs. And there is an active exploration program that could create something really new and exciting. I think it will be ‘good' exciting not necessarily the silver bullet. The reality is that the North Sea is a mature basin so some of the structural changes will stay. I don't think we'll go back to the way it was at $100 oil. I just can't see that. Or the early days of the North Sea. But it's going to be around for a long time and be a vibrant place and part of the global oil and gas industry most certainly. And I don't know that people who work in the industry in the North Sea realize how good they are and how much they know.†He urged service firms to look further afield, including Mexico, to help them lay the bedrock of the industry there. BP most recently acquired interest in two North Sea exploration prospects, Jock Scott and Craster. The firm bought stakes a 25% interest in the Statoil-operated Jock prospect and a 40% interest in the north and a 30 percent interest in the south of the Nexen-operated license P2062, which includes the Craster prospect. The North Sea producer said it was part of its strategy to remain a North Sea producer, investor and employer for decades to comeâ€. The buy-in was followed by the confirmation that it had started drilling a prospect in the Southern North Sea. The oil major said it was testing the potential of a deep carboniferous age horizon, located several hundred metres beneath the mature reservoirs produced by the Ravenspurn ST2 platform. Earlier this year, it doubled its stake in the North Sea's Culzean development. Over the last five years it has invested $10billion in the North Sea. Last year, it invested a $1billion into its aging ETAP field, securing its future through 2030. He added: The North Sea is on a glide path. That's the physics of it and that happens all over the world. But what I think you'll see as it comes down are projects coming along that will create bumps that will extend the life of it well past 2050. It's hard to see beyond 2050, but I think that's a long enough time. It's longer than anyone thought, including the people who first built the facilities.†Dudley first came to Aberdeen in the 80s as a production engineer. We were here in ‘84 to ‘87 and one of the things that is interesting to me are the similarities in how the industry is now to how it was then,†he said. When we arrived oil had been $40 and then it was $26 and suddenly it went to $9. And with all that stress there are some big similarities now to what we felt then. But for me there's a lot of enthusiasm for BP in the North Sea particularly in 2017. We have a lot of things happening. It's just been complicated with the price, so for me being able to come up and talk to the team and learn more first-hand what's happening with Clair, Quad 204, the exploration plans and all of the things that are happening with contractors is really important and a little overdue. One thing that is the same as when I came here as a production engineer are these big facilities in the North Sea. They cradle the offshore oil and gas industry. The things that were done here in the 80s were ground-breaking and the things that are still happening today are ground-breaking, so for me I've just always been excited by the North Sea. These big projects will keep oil flowing in the North Sea past 2050 for sure. And while the industry itself is going through a tough time and the North Sea is in a decline and is a mature basin there is still a lot to do to keep it alive BP will be one of if not the leading operator then.†Find out why he thinks oil not renewables will always be the energy answer here. Find out what record low North Sea operating cost BP is targeting here. And tomorrow find out what helped the oil boss regain his nerve.\ This article originally appeared on Energy Voice. Click here to read more on energyvoice.com . http://everythingshale.com/news/2016/december/8/bp-boss-bob-dudley-says-firm-will-double-north-sea-production-hails-crown-jewel/ http://everythingshale.com/news/2016/december/8/bp-boss-bob-dudley-says-firm-will-double-north-sea-production-hails-crown-jewel/ Thu, 08 December 2016 14:36:53 http://everythingshale.com/news/2016/december/8/braskem-expands-in-houston-area-with-new-plastics-plant/ The plant, which is launching after completing construction in October, gives Latin America’s largest petrochemical company an expanded Texas presence after buying plants from Sunoco and Dow Chemical beginning in 2010. This is the first time Braskem will produce its “UTEC” ultra-high molecular weight polyethylene in the U.S., said Chris Gee, Braskem’s global business director. The plastic is a stronger, specialty version of the world’s most common plastic, polyethylene, to serve more industrial purposes and compete with steel. “It’s a big deal because Braskem has largely been a regional player,” said Gee, who’s based out of Philadelphia. “It’s one of Braskem’s ambitions to keep growing in the U.S.” Like many other petrochemical companies, Braskem looked to expand in the Houston area because of the easy access to cheap natural gas and to the Houston Ship Channel, he said. Braskem made its first big move into the U.S. in 2010 when it bought Sunoco’s polypropylene plastics plants in La Porte, Pennsylvania and West Virginia. The new La Porte plant is located on the same property as the original Sunoco footprint. Braskem continued growing in Texas a year later when it bought polypropylene plants in Freeport and Seadrift from Dow. There’s a small global market for the UTEC polyethylene product of about 200 kilotons annually, Gee said. Because of the small but competitive market size, Braskem won’t release the production capacity of the new plant or the project costs. Most of the products will be sold in the U.S., although some will get exported to Asia and other markets, Gee added. http://everythingshale.com/news/2016/december/8/braskem-expands-in-houston-area-with-new-plastics-plant/ http://everythingshale.com/news/2016/december/8/braskem-expands-in-houston-area-with-new-plastics-plant/ Thu, 08 December 2016 14:00:36 http://everythingshale.com/news/2016/december/07/pipelines-carrying-marcellus-gas-are-improving-health-saving-new-yorkers-millions/ “Ironic” doesn’t even begin to describe the situation in New York when it comes to the subjects of fracking and natural gas. First, the state banned its own residents from producing the shale beneath their feet in 2014, while in the same breath calling for more natural gas usage . Now, Gov. Andrew Cuomo has blocked necessary pipelines to bring that gas into New York City despite having ample evidence of the health and economic benefits similar pipelines have created. Scott Waldman discussed New York’s reality — one in which the Cuomo administration acknowledges new pipelines are absolutely necessary — in a 2015 Capital New York article , “The future of energy in New York involves miles and miles of pipelines carrying natural gas from other states, a notion that has been reinforced both by Governor Andrew Cuomo and the governors of New England states that are also pushing for more pipeline infrastructure. New York and New England are increasingly powered by natural gas, thanks to the nation’s fracking boom.” (emphasis added) Still, the Cuomo administration continues declining to approve any new pipelines. Here is a look at why the New York Post nailed it this week by referring to this contradictory policy as “hysteria.” Major Health Benefits New York City has seen tremendous health benefits over the last few years thanks to a major shift to use of natural gas for heating and electric — and that gas has been brought into the city via pipelines. The National Journal highlighted some of these benefits in a 2014 article, reporting that the number of large NYC buildings using natural gas increased from 300 to 1,300 from 2011 to 2013, according to the city’s utility company, Con Edison. The city also worked to phase out more than 2,700 buildings that relied on traditional heating oil in this same time period. As a result, the National Journal reported, “ New York City’s air quality reached its cleanest level in 50 years in September 2013 .” “Since 2008, levels of sulfur dioxide dropped 69 percent.” “Since 2007, soot pollution dropped 23 percent.” “According to the city’s 2013 estimate, improved air quality is preventing 800 deaths and 2,000 emergency room visits and hospitalizations from lung and cardiovascular diseases annually, compared to 2008.” Former NYC Mayor Michael Bloomberg echoed these findings to the New York Times in 2013, saying , “ The continued health benefits of this conversion to cleaner heating fuels will make it the single biggest step to save lives since we began our comprehensive smoking control program . City government’s number one responsibility, I’ve always thought, is protecting the health and safety of our people. And when you look at the results like that, at the lives being saved and the illnesses being prevented, it tells you that we’re definitely doing something right .” (emphasis added) Further, the New York Independent System Operator (NYISO) released a report in 2015 that emphasized how increased use of natural gas in power generation was helping emissions rates plummet. This is evident in the following chart from report : And there is a clear correlation between emissions reductions and improved public health. New York’s neighbors to the south — the Pennsylvania Department of Environmental Protection (DEP) explained in 2012 that these emissions reductions have represented “between $14 and $37 billion of annual public health benefits” in Pennsylvania. Tremendous Economic Benefits Last year Bloomberg reported, “the shale boom has reached the Big Apple” because electricity prices plummeted as a result of the increased use of natural gas. From the article : “Wholesale on-peak electricity prices for Manhattan and its four neighboring boroughs averaged $40.99 a megawatt-hour since the start of July through Sept. 11. They’re headed for a record third-quarter low, based on Independent System Operator Inc. data going back to 2006 . New York power is becoming so cheap that it’s threatening to fall below prices in the area surrounding Washington. Electricity at the two hubs is only about $1 apart now, down from almost $23 a megawatt-hour in 2013.” (emphasis added) Further, NYISO reported , “Winter 2014 price spikes, driven by increased cost of natural gas delivered to New York, increased the average wholesale electric energy price to $69.30 per megawatt-hour in 2014, up from $59.13 per megawatt-hour in 2013. Winter 2015 saw less volatility as a result of improved fuel supplies and enhancements to gas-electric coordination .” This week, the New York Post editorial board highlighted the incredible economic benefits NYC has seen from just one pipeline, Spectra’s Trans-Hudson, which delivers Marcellus gas from Pennsylvania to lower Manhattan. From the Post , “All in all, it has saved New Yorkers $500 million from November 2013 to October 2016, according to ConEdison: $224.4 million for gas customers. $57.6 million for steam customers.  $210.6 million for electric customers.” Those same Manhattanites that now reap the benefits of this clean, affordable resource fought tooth and nail against the construction of infrastructure needed to deliver it to them. In fact, they literally stripped down to their birthday suits, painted themselves green and marched through the streets of NYC in protest of a pipeline that they needed to meet their heat and electricity demands. It is this same Keep It In the Ground mentality that has halted another pipeline from bringing further benefits to the city. The Constitution Pipeline has received all Federal Energy Regulatory Commission (FERC) permits, Pennsylvania permits, and yet cannot be built because New York refuses to approve the remaining Water Quality Certification necessary to begin to build the infrastructure. From the National Review article , “This proposed pipeline promises to provide much-needed natural gas to the region, which will help lower fuel and energy costs — addressing one of the key challenges Upstate New York faces in remaining competitive with other manufacturing regions,” Randy Wolken, president and CEO of the Manufacturers Association of Central New York, wrote New York Gov. Andrew Cuomo on Oct. 15, 2014.” That’s because the Constitution is considered an “open access” transmission pipeline — meaning distribution systems can tap into it along the route, gaining access to affordable Marcellus gas being transported to New York City. In addition to not having this supply for heating and electric this winter, and the consumer benefits that come along with it, the denial of this project also delays : “… about 2,400 direct and indirect jobs that would be created during pipeline construction, generating $130 million in labor income for the region. The decision could also cost local governments approximately $13 million in annual property tax revenue.” Meanwhile, New York’s Natural Gas Usage Continues to Increase To add to this irony, demand for natural gas in New York state and NYC continues to increase at the same time politicians and environmentalists block construction of needed infrastructure. As Stephen Whitley, president of the New York Independent System Operator, the state’s grid operator, recently told Capital New York , “ The ‘lights will go out’ if significant resources are not invested in natural gas pipelines and transmission lines .” (emphasis added) That’s because, as NYISO reported , “Power projects using natural gas (gas-only and dual-fuel units capable of using either natural gas and/or oil) account for 56 percent of New York’s generating capacity . More than 70 percent of all proposed generating capacity in New York are natural gas or dual fuel power projects .” ( emphasis added ) Pipelines are the safest way to move gas , and New York needs more gas as a result of policies implemented by the same administration that has stopped production within its borders and is refusing new infrastructure to be built. Groups with a Keep It In the Ground (KIITG) mentality such as the Sierra Club aren’t worried about the potential for outages or increased costs because they believe , “If we can forestall gas infrastructure being put in the ground and locking in that demand for the next 60 years — if we can forestall that by maybe just five years — the hope is that renewables will come in and be cost competitive in all markets.” But as U.S. Sen. Heidi Heitkamp (D-N.D.) said earlier this week in reference to the KIITG movement during an interview on CNBC’s “ Squawk Box ”, “I think when you look at it, it’s so critically important that we live in the real world and not in the world of ideology.” For the majority of New Yorkers that live in the real world that means an increasing need for infrastructure like pipelines. http://everythingshale.com/news/2016/december/07/pipelines-carrying-marcellus-gas-are-improving-health-saving-new-yorkers-millions/ http://everythingshale.com/news/2016/december/07/pipelines-carrying-marcellus-gas-are-improving-health-saving-new-yorkers-millions/ Wed, 07 December 2016 23:17:50 http://everythingshale.com/news/2016/december/07/new-poll-more-than-80-percent-of-ohio-voters-support-natural-gas-development-and-infrastructure/ The National Association of Manufacturers (NAM) released a new survey today that finds a vast majority of Ohio registered voters support energy development. The poll shows 84 percent of Buckeye State residents say they would like to see energy development increase in the United States. Support for more energy infrastructure is even stronger, as 86 percent of respondents say they support construction of more pipelines, natural gas compressor stations and power plants. The survey also found broad bipartisan support for energy development despite the fact that 88 percent of voters consider themselves to be “environmentalists.” These findings clearly show that when it comes to natural gas, public support in Ohio is widespread and intense. Five hundred registered voters participated in the survey, in which registered voters were interviewed via telephone. Respondents were asked whether they identify themselves as Democrats or Republicans, and survey results found participants from both parties overwhelmingly support energy infrastructure. Respondents also said they believe increasing energy infrastructure will lead to good paying jobs and boost the economy. This sentiment is not surprising, considering Ohioans have been reaping the benefits from Utica Shale development for the past five years. Another interesting factoid from the survey was that it showed only nine percent of respondents oppose increasing energy development in Ohio. This is also not surprising considering fringe environmental extremists are in fact few and far between — despite what misleading headlines might lead you to believe. The fact that oil and natural gas provide a feedstock for manufacturing could be one reason respondents showed overwhelming support for energy development. This sentiment was echoed by Eric Burkland, president of the of the Ohio Manufacturers’ Association who stated, “Buckeye State voters overwhelmingly support infrastructure investment because they know it will improve our standard of living. From the pipeline infrastructure to get Utica Shale resources to market, to locks and dams along the Ohio River, to maritime and transportation infrastructure along Lake Erie, public and private investment in these areas will help get Ohioans working again and revitalize our manufacturing base for years to come.” This new poll essentially confirms what we have known for years — Ohioans overwhelmingly support more natural gas development. It’s a win for the environment and a win for the economy. http://everythingshale.com/news/2016/december/07/new-poll-more-than-80-percent-of-ohio-voters-support-natural-gas-development-and-infrastructure/ http://everythingshale.com/news/2016/december/07/new-poll-more-than-80-percent-of-ohio-voters-support-natural-gas-development-and-infrastructure/ Wed, 07 December 2016 20:20:19 http://everythingshale.com/news/2016/december/07/rockefellers-not-only-did-we-pay-for-exxonknew-we-were-the-ones-who-pulled-in-ny-ag/ The Rockefellers directly lobbied New York Attorney General Eric Schneiderman and other state officials to launch a climate investigation into ExxonMobil, raising more questions about the role that the funders of the #ExxonKnew stories played in creating the campaign. In a column published by the New York Review of Books , David Kaiser and Lee Wasserman of the Rockefeller Family Fund (RFF) wrote: “It is up to government officials, not public interest advocates, to determine whether ExxonMobil’s conduct has violated any state or federal laws within the relevant statutes of limitations. Recognizing this, the Rockefeller Family Fund (RFF) informed state attorneys general of our concern that ExxonMobil seemed to have failed to disclose to investors the business risks of climate change. We were particularly encouraged by Schneiderman’s interest in this matter, because New York’s Martin Act is arguably the most powerful tool in the nation for investigating possible schemes to defraud.” (emphasis added) In a November 21 article, Kaiser told the New York Times that the Rockefellers had petitioned the government for this investigation, although he did not explicitly say at that point that it was Schneiderman who was approached. “And we have exercised our right to petition the government for redress of grievances by informing elected officials about our concerns that in the course of its climate science campaign, Exxon may have violated the law. All of those rights are explicitly guaranteed to us by the First Amendment.” (emphasis added) Additionally, Kaiser and Valerie Rockefeller Wayne of the Rockefeller Brothers Fund (RBF) appeared on national TV last week to admit that they were the ones bankrolling the entire #ExxonKnew campaign, including the “news” outlets that have repeatedly disavowed any improper influence from the Rockefellers. As CBS This Morning with Charlie Rose  reported, “The charities [the Rockefellers] run funded investigations that appeared in the Los Angeles Times and InsideClimate News.” Is this why Schneiderman and Massachusetts Attorney General Maura Healey have been aggressively fighting Freedom of Information Act requests and a federal judge’s discovery order , all of which may show that they have been operating under “bias or prejudgment” to conduct “bad faith” political investigations? As the  Washington Post   reported  when the discovery order was first issued, this “could open the door for an intrusive examination of Maura Healey’s internal phone records, other communications and depositions.” In other words, whatever communications the Rockefellers had with the AGs – including their direct lobbying to advance the #ExxonKnew political campaign – may soon be out in the open for everyone to see. The recent admissions by the Rockefellers may be an attempt to blunt the impact of the scandal and reveal their collusion on their own terms, although that may not help Schneiderman or Healey, who suddenly find themselves in serious legal trouble. Schneiderman, the New York Attorney General, has recently come under scrutiny for working closely with wealthy donors. Emails show that Schneiderman may have used his investigation of ExxonMobil as a hook to secure campaign funding from billionaire environmental activist Tom Steyer for his upcoming run for governor. Schneiderman actually called Steyer to discuss “support for his race for governor…regarding Exxon case,” according to one of the emails. The timeline of #ExxonKnew events has also become more interesting. Schneiderman announced his investigation last year on November 4 th and said that it had been going on for roughly a year. A FOIA’d email written by Peter Frumhoff of the Union of Concerned Scientists (UCS) – one of the activists who briefed the AGs ahead of their March 29 th press conference with Al Gore – shows that contact had already been made with the AGs long before the InsideClimate News and Columbia School of Journalism hit pieces were published. As Frumhoff put it in a July 21, 2015  email , “we think there’ll likely be a strong basis for encouraging state (e.g. AG) action forward, and in that context, opportunities for climate scientists to weigh in.” These new revelations show that it may not have been the activists, but the Rockefellers themselves, who got that ball rolling on #ExxonKnew last summer. Schneiderman announced his investigation once the Rockefeller-funded hit pieces were out , providing him with the cover necessary to justify his witch hunt.   http://everythingshale.com/news/2016/december/07/rockefellers-not-only-did-we-pay-for-exxonknew-we-were-the-ones-who-pulled-in-ny-ag/ http://everythingshale.com/news/2016/december/07/rockefellers-not-only-did-we-pay-for-exxonknew-we-were-the-ones-who-pulled-in-ny-ag/ Wed, 07 December 2016 19:26:21 http://everythingshale.com/news/2016/december/07/tough-year-for-offshore-atwood-delays-rig-delivery/ Atwood, based in Houston, said that Daewoo Shipbuilding & Marine Engineering won't require Atwood to pay for all of the Atwood Admiral and the Atwood Archer until 2019 and 2020. Atwood said it will pay $125 million to the South Korean shipbuilding firm for the Archer by December 15 and another $15 million on delivery; the company will pay $10 million for the Admiral at delivery. In exchange, Daewoo will extend the remaining $249 million in payments until the end of 2022. Daewoo will charge Atwood 5 percent interest upon delivery of the ships. Atwood CEO Rob Saltiel called the move an important step†toward balancing its budget. The company doesn't yet have service contracts for either rig, meaning it would be paying for ships to sit. The two-year delay, Saltiel said, gives the company a chance to sell the new rigs' services before they arrive. RELATED: Burgeoning oil sector recovery pits land versus sea Atwood was banking that British company Premier Oil would contract to use the Admiral, according to energy researchers at Barclays. But Premier delayed its exploration program off the coast of Brazil. It's the fifth time Atwood and Daewoo agreed to adjust the Admiral and Archer construction contracts, analysts said. Still, analysts generally praised the move on Wednesday. Raymond James called the move an incremental positive.†Tudor, Pickering, Holt & Co. said it was a favorable outcome.†Atwood now owns 10 offshore drilling rigs. All five of its jackups†- shallow water rigs with legs - are now idled, Barclays said, as is one of its floating rigs. But the company will lose three more floating rig contacts over the next year, Barclays said, in the midst of an offshore rig market whose projected timing for recovery is 12 to 24 months out.†As of mid-November, Atwood had $760 million in cash and liquidity to service $400 million in new-build commitments and $1.2 billion in debt. Atwood's ability to meet its debt obligations in the coming years, Barclays said, hinges on the driller landing new contracts, without which Barclays expects negative cash flow each year through 2020. http://everythingshale.com/news/2016/december/07/tough-year-for-offshore-atwood-delays-rig-delivery/ http://everythingshale.com/news/2016/december/07/tough-year-for-offshore-atwood-delays-rig-delivery/ Wed, 07 December 2016 18:38:14 http://everythingshale.com/news/2016/december/07/raven-petroleum-aims-to-build-first-new-texas-refinery-in-decades/ Houston native Christopher Moore recently formed Raven Petroleum to build a $500 million, 50,000-barrel-a-day refinery east of Laredo to export nearly all of its fuels to Mexico. He's hoping to become one of the first companies to build a large U.S. refinery in the past 40 years - taking advantage of the newly deregulated Mexican energy market and the surplus of Texas crude oil unlocked by the shale revolution. It makes sense from a logistical standpoint. We're sitting right on top of our own feedstock,†Moore said. We're really seeing that (Mexico) demand. It's materialized and escalated.†The developing nation's fuel consumption is growing about 3 percent annually, which is twice the global average, according to the Oliver Wyman consulting and research firm. Rob Desai, an energy analyst at Edward Jones in St. Louis, says Raven Petroleum's proposed South Texas Energy Complex can fill a unique niche. From the supply side it makes sense to build there (in South Texas),†Desai said. The issue is demand. But there's demand coming from Mexico. It seems a lot of the pieces are falling into place.†With the puzzle pieces connecting, it makes sense that Moore would name the company for a Celtic raven that's a symbol for divine providence. The refinery project, which Moore wants to start building next year and open by the end of 2018, would create about 300 permanent jobs and 1,500 temporary construction positions. But the big questions remaining are about financing, and for now he describes the project as having one founder and one funder†- himself. We're looking at several debt financing sources,†he said. There's no private equity backing at this point,†he added. But he says there's no question that the project will proceed: I'm all in.†http://everythingshale.com/news/2016/december/07/raven-petroleum-aims-to-build-first-new-texas-refinery-in-decades/ http://everythingshale.com/news/2016/december/07/raven-petroleum-aims-to-build-first-new-texas-refinery-in-decades/ Wed, 07 December 2016 17:04:03 http://everythingshale.com/news/2016/december/07/oil-inventory-levels-fall-while-the-fuels-glut-grows/ The news shows U.S. refiners are going back to the trend earlier this year of turning oversupplies of crude into too much fuel sitting in storage. The benchmark for U.S. oil prices hovered below $50.50 a barrel Wednesday morning, about a 50-cent dip for the day. Distillate fuel levels grew as well, increasing by 2.5 million barrels, for the fuel that’s used to create diesel and heating oils, according to weekly data from the U.S. Energy Department. Despite the oil inventories dip, storage levels are at upper limit of the average range seasonally, the Energy Department said. However, gasoline storage levels “are well above the upper limit of the average range.” http://everythingshale.com/news/2016/december/07/oil-inventory-levels-fall-while-the-fuels-glut-grows/ http://everythingshale.com/news/2016/december/07/oil-inventory-levels-fall-while-the-fuels-glut-grows/ Wed, 07 December 2016 16:32:19 http://everythingshale.com/news/2016/december/07/weekly-petroleum-stocks-12072016/ US crude oil stocks decreased by 2.4 MMBbl last week. Gasoline and distillate inventories increased by 3.4 MMBbl and 2.5 MMBbl respectively. Yesterday afternoon, API had reported a crude oil withdrawal of 2.2 MMBbl alongside gasoline and distillate builds of 0.8 MMBbl and 4.1 MMBbl/d respectively. Analysts had expected a crude oil withdrawal of 1.4 MMBbl/d and a distillate build of 1.2 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted a build of 1.4 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. See Drillinginfo EIA Charts . US production was estimated to be down 2 MBbl/d from last week per EIA’s estimate. Imports were up 755 Mbb last week to an average of 8.3 MMBbl/d. Refinery inputs averaged 16.4 MMBbl/d (134 MBbl/d more than last week), leading to a utilization rate of 90.4%. The petroleum stocks report is bearish, as the larger than expected builds in gasoline and distillates offset the crude oil withdrawal and caused total petroleum inventories to grow. Prompt month WTI prices are down $1.03/Bbl, trading at $49.90/Bbl at the time of writing. Since OPEC announced their production cut of 1.2 MMBbl/d, WTI prices have been rising. On Tuesday, however, realities began to set back in. The market has again started doubting OPEC’s ability and willingness to follow through on their promised production cuts. A Reuters survey showed on Tuesday that OPEC’s November production was 34.19 MMBbl/d, up from the 33.82 MMBbl/d from the month prior. That would mean that OPEC members would now have to cut an even larger amount than the promised 1.2 MMBbl/d to reach the targeted 32.5 MMBbl/d quota. Additionally, Libya and Nigeria, who were exempted from quotas at the OPEC meeting currently have offline production that could be brought back online should the situation on the ground allow, reversing some of the intended effects of the cuts. In further bearish supply-side news, Russia reported average oil production of 11.21 MMBbl/d in November, setting a 30-yr. high. Also, news that Saudi Arabia and Kuwait may resume oil production from the Neutral Zone added to concerns that the quotas will remain only on paper. Saudi Arabia also made clear its intent to continue to fight for market share, as Aramco cut their selling price to Asia for January. Russia had recently overtaken Saudi Arabia as the largest exporter to China. On Saturday, OPEC and non-OPEC producers will be meeting to discuss the details of non-OPEC participation in the production cuts. Out of 14 countries that were invited, only four (Russia, Oman, Bahrain, Azerbaijan) are set to attend. Russia alone had agreed to cut 300 MBbl/d contingent on “technical ability”. The recently higher production levels would mitigate the effects of the 300 MBbl/d cut. Also, the recent move for market share by Saudi Arabia in the Asian market and the presence of private operators in Russia make their willingness and ability to participate in the cut questionable. Drillinginfo expects prices to be volatile as the market reacts to any production cut related news, but if the hopes of a successful cut are not completely dashed, expect a floor on prices going below $45/Bbl. http://everythingshale.com/news/2016/december/07/weekly-petroleum-stocks-12072016/ http://everythingshale.com/news/2016/december/07/weekly-petroleum-stocks-12072016/ Wed, 07 December 2016 16:31:41 http://everythingshale.com/news/2016/december/07/market-currents-is-nopec-just-a-duo/ 1) Oman is a key producer in the NOPEC clan, and is expected to cut production by ~46,000 bpd to help the cause. At this juncture, it seems that Russia is the only other NOPEC member that is willing to cut (no Brazil, Azerbaijan attending the NOPEC meeting). Oman is the largest producer in the Middle East who is not a member of OPEC, and  plans to raise $1.5 – $2 billion next year via a bond issuance in an effort to plug its deficit. This is hot on the heels of Saudi Arabia, who sold $17.5bln of debt in October. Oman’s budget deficit widened 55 percent year-on-year in September to 180.5 million rials. Its budget deficit was 17 percent of its GDP in 2015; quite the ski slope: 2) Omani crude exports have been on a similar trajectory to those of its Middle Eastern neighbors in recent times; exports have averaged over 900,000 bpd this year, up 10 percent on the prior year. The destination of Omani crude is very much polarized on East Asia. China accounts for some 70 percent of Omani exports, while Japan, South Korea and Taiwan account for nearly 20 percent. This leaves 10 percent to go to a plethora of other destinations, including the U.S., Pakistan and Mozambique. 3) The chart below is from the EIA’s last  Short term Energy Outlook  of the year, released yesterday. It shows how in Q3 of this year, a group of 91 publicly traded global oil companies reported their first quarterly profit from its upstream businesses since Q4 2014. According to earnings statements, the group of companies earned $2.3 billion in Q3, after a loss of $54.1 billion in Q3 of the prior year, driven in part by asset write-downs. The increase this year is in part due to a reduction in write-downs, which dropped 80 percent year-over-year, as well as higher profitability due to reductions in operating expenses (outpacing declining revenue). 4) The graphic below is from this piece on how CME and ICE are planning to launch derivatives which make it easier to trade LNG. Both are working on an LNG futures contract which is based on prices in the U.S. Gulf, to create a liquid transparent market. As LNG capacity is expanded on the U.S. Gulf Coast in the coming years, U.S capacity could increase to over 60 million metric tons annually, which compares to Qatar – the world’s leading exporter – at 77 million. 5) Finally, we said on CNBC back on November 2 that we expected Saudi to ‘bamboozle’ the market at the OPEC meeting by pushing through some type of production cut. The bamboozling to the oil market is nothing compared to their equity market, however, which is up 30 percent since the Algiers meeting at the end of September (h/t @a_coops1 ). Nonetheless, the equity index is still down by over a third since the peak in mid-2014…when oil prices were last up over $100/bbl. http://everythingshale.com/news/2016/december/07/market-currents-is-nopec-just-a-duo/ http://everythingshale.com/news/2016/december/07/market-currents-is-nopec-just-a-duo/ Wed, 07 December 2016 15:27:20 http://everythingshale.com/news/2016/december/07/shell-in-deal-to-assess-3-of-iran-s-oil-gas-fields-officials-say/ Shell will sign a memorandum of understanding with the ministry regarding the South Azadegan and Yadavaran oil fields, near the Iraqi border, and the Kish gas deposit in the Persian Gulf, the official said, asking not to be identified because he isn't authorized to speak to the media. Talks are ongoing with Total for other fields, but no agreement is expected imminently, the official said. He had earlier said Total and Shell would sign agreements on Wednesday. Shell's agreement will be to form working groups to assess the potential for future investment, not to develop fields, according to a person with knowledge of the matter. Representatives of Total and Shell declined to comment. http://everythingshale.com/news/2016/december/07/shell-in-deal-to-assess-3-of-iran-s-oil-gas-fields-officials-say/ http://everythingshale.com/news/2016/december/07/shell-in-deal-to-assess-3-of-iran-s-oil-gas-fields-officials-say/ Wed, 07 December 2016 14:03:05 http://everythingshale.com/news/2016/december/07/shift-happens-the-slow-apocalypse-coming-for-the-shipping-industry/ Take a seat, Nostradamus: I’ve got some news. To quote the rock band REM, it’s the end of the world as we know it. Like the recent gatherings preceding it, speaker after speaker at the Platts 5th Annual Mediterranean Bunker Fuel Conference in Athens last week discussed the ifs, whats and hows of the impending little shipping apocalypse. Ned Molloy, managing editor, fuel oil, discussed bunker prices while Alex Younevitch, managing editor, freight markets, delivered a rather droll presentation on the state of affairs in the bulk market. Sameer Mohindru, senior editor, Asia shipping markets, wasn’t there, but the sonorous words in his recent Platts video kept ringing in my ears: “ 2020 will change the course of maritime history .” So too the venerable oracle of the bunker business, Adrian Tolson, who recently declared 2020 to be “the biggest thing to hit our industry since we switched from coal to fuel.” And they’re right: shift will happen in 2020. And just as in previously-predicted apocalypses, armies of enterprising consultants bearing appropriately-furrowed brows are capitalizing on the rising tide of anxiety, divining many predictions from their briny crystal balls. Those old enough might recall all the professional prognosticators who made big bucks preparing us for another apocalypse: Y2K. For the young ’uns among us, Y2K (meaning ‘Year 2000’) was the expectation that all computers worldwide would become confused and malfunction once their internal clocks ticked one second beyond 23:59:59 on Dec. 31, 1999. A mass freak-out ensued among the world’s governments and many corporations, who proceeded to ply around half a trillion US dollars fixing their IT systems. An array of survivalists, millennialists and messianists eagerly awaited Armageddon with breathless anticipation. But when the Year 2000 was one second old, computers kept on ticking. Yet instead of mass relief, a substantial number of observers strangely concluded that the absence of a cataclysmic crash must have meant that Y2K was a gigantic hype or hoax and that the investment to prevent the supposed catastrophe was an utter waste of money. In retrospect the outrage over the waste seems more like sour grapes — disappointment that the world didn’t actually come to a crashing end. Was the Y2K fear and investment justified? It was: while it was probably a lot more wasteful than it could have been, Y2K phobia was definitely warranted. 2020 is the shipping industry’s Y2K: lowering the marine fuel sulfur limit from 3.5% to 0.5% will be a big and costly affair. As Sameer points out, it will touch all players up and down the shipping food chain: ship owners, operators, bunker traders, barge companies, refiners, ports, engine manufacturers, scrubber makers, shipyards, scrap yards and even banks and insurers — all will be affected for better or worse. We just don’t know exactly how.  All we know is that (as the American President-elect might say) it’ll be huuuge . Given our inability to discern any real details of how things will actually unfold in the not-too-distant future, the perfect vision implied by 2020 is just slightly ironic. Yes, shift will happen — it always does. But beyond many extremely educated guesses, we simply have no idea what to expect, and therein lies the industry-wide worry. To quote the eminently quotable Donald Rumsfeld, former US secretary of defense: too many known unknowns. And those pesky unknown unknowns lurk right behind them. But wait, there’s another apocalypse coming: impending ballast water regulations may have an impact on the industry rivaling that of 2020. When a ship takes on cargo in, say, Singapore for delivery in Seattle, it also takes on water for ballast. And when this Singaporean water is dumped in Seattle, a whole menagerie of invasive species is released with it. This is a profoundly serious problem and the filtering equipment to be installed on 50,000 ships could cost $50 billion.  Huuuge. Thing is, it’s not like 2020 is some random black swan swimming in from the clear oceanic blue. The International Maritime Organization (IMO) regulations limiting sulfur levels in residual marine fuel were first formulated in 1997, implemented at an initial 4.5 % in 2005 and lowered to 3.5% in 2012. The 2020 deadline for the 0.5% limit was penciled in during 2005 — allowing the shipping industry a full 15 years to prepare. I suppose that, ultimately, that’s just how we humans roll. Or shift. The post Shift happens: The slow apocalypse coming for the shipping industry appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/07/shift-happens-the-slow-apocalypse-coming-for-the-shipping-industry/ http://everythingshale.com/news/2016/december/07/shift-happens-the-slow-apocalypse-coming-for-the-shipping-industry/ Wed, 07 December 2016 05:01:05 http://everythingshale.com/news/2016/december/06/democratic-senator-says-keep-it-in-the-ground-anti-energy-extremists-to-blame-for-election-losses/ Earlier this week, U.S. Sen. Heidi Heitkamp (D-N.D.) blamed the “Keep It In The Ground” (KIITG) movement for Democrats’ devastating losses in the November election. When asked by CNBC “Squawk Box” co-host Joe Kernan if the “somewhat radical” energy and climate policy advocated by the KIITG movement has served her party well, Heitkamp responded , “I think when you look at it, it’s so critically important that we live in the real world and not in the world of ideology. I can tell you that… there’s a large number of people that are ‘Leave It In The Ground’ that think we should shut down all fossil fuels. I think people in the fossil fuel industry feel that, whether they’re coal miners, or they’re oil workers, and I think that kind of alignment with ‘Leave It In The Ground’ and not looking at energy policy, has had an effect (on the way voters cast their ballots this year).” There is ample evidence to back up Heitkamp’s assessment, particularly in key swing states such as Pennsylvania and Ohio. Rust belt voters overwhelming supported candidates and campaigns who ran on issues that support domestically produced oil and natural gas in November, rejecting the “Keep-It-In-The-Ground” agenda that poses a serious threat to working families. Heitkamp is also just one of many progressive leaders who feel the KIITG agenda runs counter to good energy policy and sensible politics. KIITG activists are even taking heat for their unrealistic stance against fossil fuels from the most prominent progressive north of the border. Canadian Prime Minister Justin Trudeau , who recently approved the expansion of an oil-sands corridor that will carry more crude oil across the country, has said of the movement’s criticism of his decision, “There isn’t a country in the world that would find billions of barrels of oil and just leave it in the ground while there is a market for it.” Earlier this year, when protesters associated with the movement complained too many Democrats supported fracking, Congressman Dave Loebsack (D-Iowa) replied : “We can’t just flip a switch and say ‘no more fossil fuels, now it’s all renewables.’ That’s not practical, it’s not possible.” Former Pennsylvania Governor Ed Rendell also countered “Keep It In The Ground” protesters’ complaints, saying: “If you regulate [fracking] well, it can be a valuable source of the economy and good for the environment.” He continued, “if we can’t frack, we are not going to have natural gas as a source for electricity. So what’s the alternative?” Rendell and Loebsack’s comments echo those of Obama Science Advisor John Holdren who  recently said , “The notion that we’re going to keep it all in the ground is unrealistic.” They are also right in line with former Hillary Clinton campaign chair John Podesta, who called KIITG activists “ completely impractical .” Political leaders from both sides of the border — and both sides of the political aisle — understand both the U.S. and Canada rely on their natural resources to create jobs and income. That is why adopting innovative ways to use fossil fuels while simultaneously cutting GHG emissions is good politics and necessary for both North American economies. Fortunately, considering increased use of natural gas made possible by fracking has driven down greenhouse gas emissions while simultaneously boosting the economy, those two objectives are no longer mutually exclusive. http://everythingshale.com/news/2016/december/06/democratic-senator-says-keep-it-in-the-ground-anti-energy-extremists-to-blame-for-election-losses/ http://everythingshale.com/news/2016/december/06/democratic-senator-says-keep-it-in-the-ground-anti-energy-extremists-to-blame-for-election-losses/ Tue, 06 December 2016 22:16:05 http://everythingshale.com/news/2016/december/06/us-energy-s-growing-strength-in-global-markets/ Energy trade publisher and data provider S&P Global Platts reports that this month the United States is a net exporter of natural gas, exporting an average of 7.4 billion cubic feet a day (bcf/d) topping the 7 bcf/d the U.S. imported. Given the fact it has been nearly 60 years since the U.S. exported more natural gas than it imported annually, that's a pretty big milestone. Even if it's just for November, the data indicates where things appear to be headed. The U.S. Energy Information Administration projected the U.S. would become a net exporter annually in 2018, but quite clearly it's already starting. Perhaps more importantly, the November natural gas export/import numbers suggest new U.S. muscularity in the global energy marketplace, built by America's domestic energy renaissance. Record natural gas output, largely developed with advanced hydraulic fracturing and horizontal drilling, is creating export opportunities for U.S. liquefied natural gas (LNG) and increasing U.S. energy influence globally. The Wall Street Journal reports : … the exports show how American shale energy producers continue to expand their influence in ways few predicted a decade ago. Gas is just one of the first signs of the growing strength of U.S. production power,†said Anthony Yuen, global energy strategist at Citigroup. More from the Journal: Overseas producers now have to deal with the growing clout of the U.S. energy industry, which is aggressively looking to ramp up its global market share to help offset a long period of low prices. It's indicative of things to come,†said Sid Perkins, managing partner at the brokerage Ion Energy Group. Natural gas is going to be taking on the characteristics of a global-macro market, like crude, where global factors will influence what happens to gas.†LNG exports are increasing. Shipments from Cheniere Energy's Sabine Pass terminal on the Louisiana/Texas border now average 1.5 bcf/d, the Journal reports. Other export projects have been approved by the government and could begin shipping out LNG next year and in 2018. The newly expanded Panama Canal is a boon for U.S. LNG export terminals along the Gulf Coast eying potential buyers in Asia, including Japan . We know that European allies are eager for U.S. gas as the ambassadors of seven central and eastern European countries recently made clear . This summer a NATO communique connected stable, reliable, diverse energy supplies with the ability of the alliance's European members to increase our resilience against political and economic pressure.†Click here for detailed analysis on Europe’s tense energy relationship with Russia. The larger point is one we've made before: The global LNG market is developing, and the United States is well-positioned thanks to abundant domestic natural gas to be a major player in it. We need policies that strengthen America's competitiveness in the evolving marketplace chiefly, to clear away any unnecessary delays in bringing U.S. export projects online. Currently, 30 applications for approval to export are pending with the U.S. Energy Department , almost half of them submitted in 2014 or earlier. Members of Congress are discussing energy legislation that could be completed during the current session. Provisions to expedite LNG export project approvals should be included in the finished legislation. By Mark Green Originally posted November 30 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/december/06/us-energy-s-growing-strength-in-global-markets/ http://everythingshale.com/news/2016/december/06/us-energy-s-growing-strength-in-global-markets/ Tue, 06 December 2016 15:00:29 http://everythingshale.com/news/2016/december/5/epa-set-to-release-final-report-on-fracking-and-groundwater-four-things-to-know/ Just before the Thanksgiving break, Environmental Protection Agency (EPA) Administrator Gina McCarthy gave a speech at the National Press Club explaining what the agency hopes to accomplish in the last few months of the Obama administration. During the question and answer session, McCarthy mentioned that the agency’s finalized groundwater study will be coming out “soon.” McCarthy’s comments come just after Catalyst Environmental Solutions released a  new report  finding EPA’s topline conclusion – that “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources” – is the product of sound science. As the  report explains , “ if a significant correlation between impaired drinking water resources and hydraulic fracturing existed, EPA would have identified it; however, the results did not support this finding. ” Administrator McCarthy alluded to the EPA Science Advisory Board’s (SAB) recommendations on the groundwater report, which suggested EPA provide more details on how it came to its topline finding, but did not ask the agency to change it, despite the way anti-fracking activists may have characterized it. When speaking about the SAB document, McCarthy made a few comments that require a bit of fact checking and clarification. #1. There’s no lack of data McCarthy said at the event, “And so, the challenge for us is to characterize what we know and to make sure that that’s not over-characterized as we know everything because our data is limited, and how we project that and clarify that in this report is what we’re going to accomplish.” This claim that the “data is limited” has been thoroughly debunked in a dissenting opinion  on SAB’s first draft recommendations to EPA, authored by SAB panel member Walt Hufford. As Hufford states, the data may not have been presented in electronic form, which EPA may have found cumbersome, but there was a wealth of data readily available and accessible to the agency nonetheless. From the dissenting opinion: “There is significant data generated and submitted to the various regulatory agencies which have jurisdictional authority over the Hydraulic Fracturing Water Cycle (HFWC) activities.  In many cases, these submittals are not electronic in nature, have voluminous attachments (maps, diagrams, laboratory data, engineering data), and are warehoused in the regulatory agency’s data rooms.  The June 2015 draft EPA report consistently referenced the lack of available data and communicated a sense of uncertainty in their conclusions based on that observation.   Factually, the data exist and are available for review.  The EPA may have found the datasets problematic (from a user point of view), given that many regulatory programs are not digitized or electronic in nature and cannot accept electronic submittals.   Each state has different regulatory reporting requirements which are unique to and meets the needs of those states. Moreover, some regions in a state may have slightly different reporting expectations.  The fact that the EPA found these databases problematic should not be relied on in formulating limitations and uncertainties.  The agency had ample time to work with the regulatory agencies to evaluate the information in the database systems (electronic or paper) in reaching their conclusions.   Further, the public has access to a majority of those database systems.   Under the Freedom of Information Act (FOIA) the public can request to review any publically held submittal to the regulatory agency.  While some files may not be available for public review for legal reasons (i.e. enforcement actions, litigation, confidential business information),  the amount of information available associated with HFWC is extensive.   Any suggestion that data is generally unavailable or insufficient leads to misconceptions that the data does not exist .” (emphasis added) To suggest that the report is not comprehensive or suffers from a “lack of data” is not only inaccurate due to the wealth of information available; it also contradicts what EPA said when the draft report was released last summer.  As EPA’s Thomas Burke said in a press release , “It is the most complete compilation of scientific data to date, including over 950 sources of information, published papers, numerous technical reports, information from stakeholders and peer-reviewed EPA scientific reports.” The  study  text itself explains the sheer breadth of the research that was conducted: “The EPA used a broad search strategy to identify approximately 3,700 sources of scientific information that could be applicable to this assessment. This search strategy included both requesting input from scientists, stakeholders, and the public about relevant data and information, and thorough searching of published information and applicable data.” Not to mention the fact that the report took no less than 5 years to complete! #2. EPA’s science advisors have asked EPA to prove a negative Administrator McCarthy also claimed that “we needed to do a better job at explaining the science” likely again alluding to SAB’s recommendations to provide more details. First, there’s is nothing ambiguous about EPA’s finding. The terms “widespread” and “systemic” are clearly defined and unequivocal. EPA further explained what it meant by that characterization when it said that the number of identified cases where groundwater may have been affected by oil and gas development “was small compared to the number of hydraulically fractured wells.” That really couldn’t be clearer. What SAB is actually asking EPA to do is to  prove that there aren’t  widespread, systemic impacts to groundwater from hydraulic fracturing – to prove a negative. The section of the recommendations that best illustrates this occurs when the SAB requests that EPA alter its finding that fracturing fluid spills haven’t impacted groundwater because “this major finding is supported only by an absence of evidence rather than by evidence of absence of impact.” The fact that EPA spent five years gathering data and information, and in that time could find nothing to support widespread or systemic impacts on underground sources of drinking water, is indeed evidence of absence. Importantly, the SAB itself provided no evidence to contradict EPA’s topline finding. If SAB has such evidence, then it should release it for public review. Absent any such evidence, however, SAB’s request makes very little practical sense. #3. The purpose of the study was to find overall risk – and the data point to only one conclusion: no widespread, systemic impacts When Congress approved funding for EPA to conduct a study on hydraulic fracturing in 2010, the mandate was as follows : “The conferees urge the Agency to carry out a study on the relationship between hydraulic fracturing and drinking water, using a credible approach that relies on the best available science, as well as independent sources of information.” In other words, the purpose of the report was to assess the overall risk . Of course, no one would dispute that in the “small” number of cases where impacts to groundwater have occurred, those impacts would not be positive. But its purpose was not to determine what happens when impacts (rarely) do occur; its purpose was to determine whether impacts are inherent, widespread or systemic to the process of hydraulic fracturing. The data and the science clearly show that they are not. #4. Pavillion, Parker County and Dimock have long been put to rest with environmental regulators finding no contamination from fracking Activists have long been petitioning EPA to include Pavillion, Wyoming, Parker County, Texas and Dimock, Pennsylvania in the report, so it’s worth repeating what environmental regulators have determined in these three cases. The Wyoming Department of Environmental Quality (WDEQ) just released its final report on groundwater in Pavillion, Wyoming and it found that fracking was not to blame for contamination there. From  the DEQ fact sheet : “Evidence does not indicate that hydraulic fracturing fluids have risen to shallow depths utilized by water-supply wells. Also, based on an evaluation of hydraulic fracturing history, and methods used in the Pavillion Gas Field, it is unlikely that hydraulic fracturing has caused any impacts to the water-supply wells.” This final report comes after state environmental regulators and even other federal agencies , namely the  U.S. Geological Survey  and the  Bureau of Land Management , criticized EPA’s initial report on Pavillion. Those criticisms from state and federal officials focused on a pair of water-quality monitoring wells, drilled by the EPA, which were  poorly constructed  and likely introduced the very contaminants that some have tried to blame on fracking. Eventually, under the weight of these criticisms, the EPA backed down. The agency never submitted its draft report, released in late 2011, for peer review and  handed the Pavillion case back to state regulators . In the case in Dimock, the Pennsylvania Department of Environmental Protection (DEP) investigated whether oil and natural gas activity was responsible for contamination. To resolve the issue, the DEP ultimately issued a consent decree with the operator, and the agency determined in November 2011 that the operator had fulfilled its obligations under that order. The EPA  agreed  in late 2011 “The data does not indicate that the well water presents an immediate health threat to users.” Nonetheless, even with no new data in the case, EPA reversed course shortly thereafter and began a high-profile investigation that attracted significant attention from the news media. EPA ultimately  released  four sets of sampling data, and concluded in July 2012 that “there are not levels of contaminants present that would require additional action by the Agency.” The Parker County, Texas case made news on December 7, 2010, when then-EPA Region 6 administrator Al Armendariz issued an unprecedented “endangerment order” against Range Resources, alleging that its gas drilling operations had caused methane to enter groundwater. The case had been brought to EPA after video surfaced of a landowner igniting water coming out of a garden hose. However, a district judge later ruled in early 2012 that a consultant named Alisa Rich had  convinced  the property owner to hook a garden hose up to a gas vent – not the water line – “to provide local and national news media a deceptive video, calculated to alarm the public into believing the water was burning.” The judge also  noted : “This demonstration was not done for scientific study.” Rich had advised the property owner to do this because “it is worth every penny if we can get jurisdiction to EPA.” Subsequent scientific testing through nitrogen fingerprinting, however, proved that the methane was naturally occurring (from the shallow Strawn Formation, not the Barnett Shale), and multiple state investigations determined gas drilling was not to blame. A few weeks later, Armendariz was forced to resign after  a video surfaced of him bragging that his method of regulating the oil and gas industry was similar to how the Romans used to “crucify” villagers. With a mountain of scientific evidence showing EPA’s order to be baseless, the EPA withdrew the order in the spring of 2012. Further, the Railroad Commission of Texas concluded in 2014, “The occurrence of natural gas in the complainants’ water wells may be attributed to natural migration of gas from the shallow Strawn Formation, exacerbated by water well construction practices whereby some water wells have penetrated ‘red beds’ in the transition interval between the aquifer and the Strawn Formation. Contribution of natural gas to the aquifer by the nearby Barnett Shale gas production wells is not indicated by the physical evidence…” (emphasis added) Conclusion EPA’s report is right in line with dozens of reports that have come to the same conclusion.  Researchers at the  University of Cincinnati recently took samples before, during and after shale development and found no groundwater contamination from fracking. Studies by the  U.S. Geological Survey , the  Government Accountability Office , the Groundwater Protection Council ,  California Council on Science and Technology , the Department of Energy, as well as studies by numerous universities, such as  MIT ,  University of Texas at Austin  and  Yale  have found fracking is not a credible threat to drinking water. At an event hosted by Christian Science Monitor today, McCarthy said about the finalized report, “We’re going to stick with the science.” The data are what the data are and the evidence could not be clearer that fracking has not led to widespread, systemic impacts to groundwater. To come to any other conclusion would be to abandon the science and the facts in favor of a political agenda.   http://everythingshale.com/news/2016/december/5/epa-set-to-release-final-report-on-fracking-and-groundwater-four-things-to-know/ http://everythingshale.com/news/2016/december/5/epa-set-to-release-final-report-on-fracking-and-groundwater-four-things-to-know/ Mon, 05 December 2016 18:22:08 http://everythingshale.com/news/2016/december/5/facing-federal-court-mass-ag-tries-to-change-story-on-exxonknew/ Massachusetts Attorney General Maura Healey has shifted her justification for a controversial probe of Exxon Mobil, according to remarks published by the Boston Globe . The change comes as Healey is being forced to appear in federal court over the politically-motivated nature of her investigation. As the Boston Globe reported this morning, Healey made it very clear during a March 29 press conference with Al Gore that she had already determined Exxon’s guilt before she even began her investigation. As she said, “Fossil fuel companies that deceived investors and consumers about the dangers of climate change should be, must be, held accountable. We can all see today the troubling disconnect between what Exxon knew , what industry folks knew, and what the company and industry chose to share with investors and with the American public.” (emphasis added) But now she’s trying to walk back these statements. As she told the Boston Globe this week, “The goal of this investigation is to get to the bottom of what happened, whether or not it’s true that Exxon knew certain information and made misrepresentations to consumers and investors . It’s as simple as that.” (emphasis added) This change in rhetoric comes after a Texas federal judge issued a discovery order  to determine whether “bias or prejudgment” influenced Healey’s decision to initiate what could be a “bad faith” investigation into ExxonMobil. New York Attorney General Eric Schneiderman was recently added to that discovery order, which opens the door to an extensive examination of both AGs’ internal documents. Such an examination may show the extent to which they were conspiring with outside groups, and if their motivation to launch these investigations was political. Like Healey, Schneiderman has repeatedly tried to change his justification for investigating Exxon Mobil. The discovery order isn’t the only major blow to the campaign lately. A New York judge recently ordered that Schneiderman will now have to comply with a Freedom of Information request by the Competitive Enterprise Institute, which Schneiderman has thus far ignored. As the New York Post editorial board put it , “The think tank’s lawyers believe the documents could show improper conduct by the AGs. If they do, Schneiderman faces serious trouble.” The Post went on to make the important point that this #ExxonKnew crusade isn’t cheap – and it’s the taxpayers who are on the hook: “Oh, and New York taxpayers are out some more cash over the AG’s bid to dodge the Freedom of Information Law: The court ordered Schneiderman to cover CEI’s court costs, because his defense of his denial of the FOIL request was so transparently lame. (His brief merely quoted New York law, without even making any argument as to why it applied in this case.)” The Boston Herald previously reported that Healey’s antics are costing taxpayers top dollar, too, as she has hired one of the most expensive law firms in Dallas to represent her. “Attorney General Maura Healey’s office has shelled out $44,000 and counting to a high-powered Texas law firm a judge dubbed the ‘most expensive’ in the Dallas area as she fights an order to appear in the Lone Star State over her probe of Exxon Mobil… “The rates for individual McKool Smith lawyers could not be determined, but its founding partner, Mike McKool, reportedly charges $1,050 an hour, according to a 2015 story in the Houston Chronicle.” That’s why the Herald ’s editorial board recently noted, “If Attorney General Maura Healey wants to campaign for governor or whatever office she covets, fine. But if that campaign is being waged at public expense, well, that could come back to haunt her politically. “Case in point, her recent vendetta against Exxon Mobil…” We already know through previous Freedom of Information Act requests that environmental activist lawyer Matt Pawa and Peter Frumhoff of the Union of Concerned Scientists (UCS) briefed the AGs behind closed doors ahead of their March 29 th  press conference with Al Gore to announce their investigations. But, when Pawa wrote to the New York Attorney General’s office to inform them he’d been asked by a  Wall Street Journal  reporter about his involvement, Lem Srolovic of Schneiderman’s office  told him ,  “My ask is if you speak to the reporter, to not confirm that you attended or otherwise discuss the event.” As part of their effort to keep their correspondence secret, the AGs also  signed on  to a Common Interest Agreement, and the document shows that the agreement was not related to a legitimate law-enforcement objective – instead it was focused on “limit[ing] climate change” and “ensuring the dissemination of accurate information about climate change.” So it’s not surprising that Schneiderman and Healey are fighting tooth and nail not to have to comply with the discovery order or FOIA requests. But the New York Post probably put it best , saying, “If [Schneiderman] does keep refusing to comply with the Freedom of Information Law, you have to think he’s worried about what those documents will reveal.” http://everythingshale.com/news/2016/december/5/facing-federal-court-mass-ag-tries-to-change-story-on-exxonknew/ http://everythingshale.com/news/2016/december/5/facing-federal-court-mass-ag-tries-to-change-story-on-exxonknew/ Mon, 05 December 2016 17:49:08 http://everythingshale.com/news/2016/december/5/wind-surges-to-nearly-15-percent-of-texas-power-supply/ Texas keeps breaking its own wind records, with no end in sight. Texas grid operator ERCOT announced a new record for wind on Monday. For the first time, wind provided more than 15,000 megawatts of electricity to the state on a single day. The record wind on Sunday supplied an average of 41 percent of electricity throughout the day. But it was not an all-time record for wind in Texas. On one day in March, wind supplied more than 48 percent of load during one hour. It is not the hour-by-hour records that are impressive, however. Texas is already the clear leader in wind power in the U.S., and that lead is widening. Texas has more than 18,000 megawatts installed and another 5,000 megawatts under construction, according to the American Wind Energy Association. Wind power made up an average of 11.7 percent of electricity in 2015 in Texas, a figure that will be at least 14.7 in 2016, according to ERCOT. The final tally of wind power's contribution to the Texas electric grid will likely be slightly higher, as the wind blows harder in winter and therefore wind power contributions to the power mix usually go up. Of course, the growing share of wind is still half the amount of coal in Texas and about one-third of natural gas generation. FIGURE: Texas Energy Mix, 2016 Coal and natural gas may dominate in Texas, but the investment the state has made in transmission and improving renewable energy forecasts could allow for even more wind and solar in the future. The wind power in Texas is coming from across the state, including the Texas Panhandle, the west and the south. Texas' success with wind power is largely due to its Competitive Renewable Energy Zones, which were identified mostly in West Texas and the state’s Panhandle region. A key to the project was about $7 billion in transmission lines to carry the wind power where it is needed. With wind power flowing across the state, solar power is now starting to catch on to take advantage of the transmission lines. In 2015, ERCOT did not even list solar as a fuel source on its annual demand and energy report. In 2016, the figures are still very small — but they’re growing. ERCOT reports about 685 megawatts of solar will be on-line in Texas in 2016, up from less than 300 in 2015. For the first time, solar energy received its own designation as a fuel type in ERCOT's annual demand and energy report. Large-scale solar could grow quickly in Texas, but will not even come close to wind. By 2020, ERCOT expects 2.5 gigawatts of solar on its system, compared to more than 28 gigawatts of wind. By Katherine Tweed  Originally published on Greentech Media , November 29  2016 Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/december/5/wind-surges-to-nearly-15-percent-of-texas-power-supply/ http://everythingshale.com/news/2016/december/5/wind-surges-to-nearly-15-percent-of-texas-power-supply/ Mon, 05 December 2016 15:00:51 http://everythingshale.com/news/2016/december/5/setback-is-probably-only-temporary-for-dakota-access-pipeline/ While the decision by President Barack Obama's administration prevents the pipeline's completion for now, analysts and Republican leaders have said Energy Transfer will probably receive the approval it seeks after President-elect Donald Trump takes office in January. The Obama administration's refusal to issue an easement for the Dakota Access Pipeline violates the rule of law and fails to resolve the issue,†North Dakota Sen. John Hoeven, a Republican, said in an email. Instead, it passes the decision off to the next administration, which has already indicated it will approve the easement, and in the meantime perpetuates a difficult situation for North Dakotans.†Trump has expressed support for Dakota Access as recently as Dec. 1. Energy Transfer Partners and Sunoco Logistics Partners LP called the move a purely political action†in a statement Sunday, adding that they are fully committed to bringing the project to completion. This is nothing new from this administration, since over the last four months, the administration has demonstrated by its action and inaction that it intended to delay a decision in this matter until President Obama is out of office,†the companies said in the statement. Dakota Access has been central to the intensifying debate over the need for new pipelines in the U.S. It has become a rallying point for the anti-fossil fuel movement and has drawn intense opposition from Native Americans who say it'll damage culturally significant sites. We wholeheartedly support the decision of the administration,†Dave Archambault II, tribal chairman of the Standing Rock Sioux Tribe, said in a statement on Sunday. In a system that has continuously been stacked against us from every angle, it took tremendous courage.†The pipeline could help cut costs for drillers in North Dakota's Bakken shale region that have turned to more costly rail shipments when existing pipes filled up. Dakota Access, with a capacity of about 470,000 barrels a day, would ship about half of the current Bakken crude production and enable producers to access Midwest and Gulf Coast markets. The permit would be for the final section of the pipeline, which spans four states. The project was originally slated to be operational at the end of this year. The thoughtful approach established by the Army today ensures that there will be an in-depth evaluation of alternative routes for the pipeline and a closer look at potential impacts,†Interior Secretary Sally Jewell said in an e-mail. Energy Transfer owns the project with Phillips 66 and Sunoco Logistics. Marathon Petroleum and Enbridge Energy Partners announced a venture in August that would also take a minority stake in the pipeline. http://everythingshale.com/news/2016/december/5/setback-is-probably-only-temporary-for-dakota-access-pipeline/ http://everythingshale.com/news/2016/december/5/setback-is-probably-only-temporary-for-dakota-access-pipeline/ Mon, 05 December 2016 14:36:00 http://everythingshale.com/news/2016/december/5/oil-advances-to-16-month-high-as-focus-shifts-to-non-opec-cuts/ Futures rose as much as 1.4 percent in New York. The Organization of Petroleum Exporting Countries will meet producers from outside the group in Vienna on Saturday to discuss supply curbs, according to OPEC Secretary General Mohammad Barkindo. The group has invited 14 non-members, which together pump about a fifth of the world's oil, to the talks, he said. Oil has climbed more than 15 percent since OPEC agreed last week to reduce output by 1.2 million barrels a day starting in January, while non-member Russia pledged a cut of as much as 300,000 barrels a day. Attention is now shifting to OPEC's compliance with the accord and efforts to persuade other producers to cooperate. The deal can balance the market, but we tend to cheat,†former Saudi Arabian Oil Minister Ali Al-Naimi said at an event in Washington, D.C. There is a reasonable degree of clarity as to how individual OPEC members will respond to the group's recent decision,†JBC Energy GmbH said in a note. The same cannot be said about Russia, let alone other non-OPEC producers†such as Oman, while U.S. output may rebound next year, it said. West Texas Intermediate for January delivery rose as much as 74 cents to $52.42 a barrel on the New York Mercantile Exchange and was at $52.11 as of 1:35 p.m. London time, the highest since July 2015. The contract gained 1.2 percent to $51.68 on Friday. Total volume traded Monday was 40 percent above the 100-day average. Prices rose 12 percent last week. http://everythingshale.com/news/2016/december/5/oil-advances-to-16-month-high-as-focus-shifts-to-non-opec-cuts/ http://everythingshale.com/news/2016/december/5/oil-advances-to-16-month-high-as-focus-shifts-to-non-opec-cuts/ Mon, 05 December 2016 14:14:35 http://everythingshale.com/news/2016/december/5/week-ahead-opec-s-cut-review-and-cold-front-supporting-gas-prices/ CRUDE OIL Inventory levels for crude oil decreased by 0.9 MMBbl last week as reported by the EIA. The gasoline and distillate inventories increased 2.1 MMBbl and 5.0 MMBbl respectively. The crude oil withdrawal was bullish as it ran contrary to analyst expectations of a slight build. The large builds in gasoline and distillate inventories was bearish, however, especially as refinery utilization remained a modest 89.8%. The most important number to keep an eye on, total petroleum inventories, increased by 0.5 MMBbl. Overall, the report had bullish and bearish indicators leading to little change in the total petroleum inventories number. The market brushed off the uneventful report on Wednesday and chose to focus on the OPEC agreement. OPEC has agreed to a production cut that will reduce output by 1.2 MMBbl/d. The following table summarizes how they intend to reach the 1.2 MMBbl/d cuts (volumes are in MBbl/d): Saudi Arabia will bear the brunt of the cuts. Iraq has agreed to cut although they had previously expressed that they want to remain exempt due to the need for the revenue to fight ISIS. Iran has been allowed to grow production an additional 90 MBbl/d. Nigeria and Libya have been exempted from the cuts. Indonesia’s OPEC membership has been suspended because they declined to participate in the cut. Non-OPEC producer Russia has also agreed to participate by cutting 300 MBbl/d, although their cut will be contingent on technical ability. Russia may not be able to bring back some of that production in the future if they stop production in some of their older fields. The jury is still out as to whether OPEC will be able to avoid cheating by its members on the quotas. If the cut is successfully implemented, the oversupply will be corrected by 2Q2017. By 3Q2017, storage inventory levels would be back to normal levels. Therefore, the cuts are only likely to be enforced through the first part of the year. If the cut is successful, expect WTI prices to climb into the mid-$60/Bbl range. It is prudent to keep in mind that US production can grow around 750 MBbl/d by December 2017 if those kinds of prices can be sustained through the year. Additionally, the higher prices get, the more incentive there is to cheat. The market will continue to keep a close eye on the implementation of the quotas as it will continue to dictate the fate of the current oversupply situation. As expected with the OPEC agreement, price action was bullish last week as WTI prices broke out of the recent range and tested the resistance from early October at $51.93/Bbl. The rally in WTI has prices extended and momentum indicators are approaching over bought levels. WTI will need some time for consolidation as the market digests the impact and success of the OPEC quotas. The run has also created a new near term trading range with $48.03/Bbl being the low end of the range and the high end has yet to be fully defined. An area that may evolve as the high side for a long-term range, dates back to July 2015 between $53.89/Bbl and $55.34/Bbl. Expect more consolidation in the trade this week and less volatility than last week, barring any additional news regarding the OPEC cuts. NATURAL GAS Natural gas production was nearly flat week over week and Canadian supplies were also flat. With forecasted temperatures moving colder in the coming week, expect Canadian supplies to increase. The cold temperatures are currently expected to move into OK and TX in the coming week, with the lows well below freezing in certain areas. This may have an impact on production as the potential for freeze offs increases. Milder temperatures dropped total demand last week below the previous week by 2.7 Bcf/d. Last week’s mild conditions will be reversed in the coming week with the expected cold moving in from Canada effecting not only the Midcon and East but also extending into TX. This pattern should set some of the highest Res/Com demand levels so far this season. The storage report last week was in-line with market expectations but prices continued to rally on cooler weather forecasts. This week’s storage report should be well below historical draws due to warmer temperatures seen last week. Last week’s bullish price action continued with strong gains on the expiring Dec contract and continued with the Jan contract opening with a $0.12 premium as the trade looked beyond the short-term fundamentals. A key technical area was broken, as prices, initially, tried to close the expiration premium, but found significant buying support that sent prices up to and eventually through a price “gap” that has existed since Jan ’15 at $3.366. The rally in Oct ’16 challenged that same area and the rally failed at $3.367. The significance of this break out sent prices $0.20 higher after the storage release as many traders, selling at that resistance area, were forced to cover their short positions. That same area ($3.367) now becomes the low end of the near term range that prices should trade until additional information either confirms the break out or proves it false. The higher end of the near-term range is the Oct ’16 highs of the Jan contract at $3.675. The risks for prices in the coming week are towards the high side. Fundamentals (weather forecasts) are very constructive for price advances and the expectations of this coming week is one of the primary drivers for last week’s actions. The potential for production issues, mentioned above, is a threat to the current supply/demand balance and the result may be significant withdrawals from storage during the coming two weeks. http://everythingshale.com/news/2016/december/5/week-ahead-opec-s-cut-review-and-cold-front-supporting-gas-prices/ http://everythingshale.com/news/2016/december/5/week-ahead-opec-s-cut-review-and-cold-front-supporting-gas-prices/ Mon, 05 December 2016 12:00:18 http://everythingshale.com/news/2016/december/5/opec-deal-gives-suez-canal-hope-for-revenue-fuel-for-thought/ Despite higher crude prices being a negative on the surface for net importer Egypt, the Arab world’s most populous country hopes OPEC’s move to cut production will actually breathe life into the moribund traffic in its Suez Canal and provide badly needed foreign currency. Egypt’s has been a net importer of crude since 2012, and lately has started importing LNG to meet the rising demand for fuel and power. Typically energy importers prefer lower energy prices, but Cairo might be keen to see oil and gas prices rise as the market slump for both commodities since 2014 has had a disastrous effect on the government’s plans to raise more revenue from shipping through the Suez Canal. The need for revenue is acute particularly after Egypt fast-tracked an $8.2 billion canal expansion that was inaugurated in August 2015, only a year after the start of construction. Sailing through the 164-km canal can knock 11 days off a typical intercontinental voyage for which the alternative route would normally be around the Cape of Good Hope. However, tariffs are steep, estimated by shipping line Maersk at around $350,000/vessel. The fees are still too high compared to the extra cost of bunker fuel needed for longer voyages around the cape as the price of the heavy marine fuel has fallen by about two-thirds since mid-2014. Moreover, with recovery from the 2007-2008 financial crisis and subsequent global recession still sluggish, carriers of container cargo, crude and petroleum products that make up the bulk of shipping through the Suez Canal are now seldom in much of a hurry. In late 2015, reports surfaced of as many as 60 cargo vessels/month opting to take the long route around South Africa while running goods from Asia to northern Europe and the US east coast, instead of passing through the Suez Canal. Analysts called the numbers unprecedented. Suez Canal Authority data later showed that Egypt’s annual revenue from canal transit fees had fallen in 2015 by about 5% to $5.18 billion from $5.47 billion the previous year. Lofty revenue promises Authority Chairman Mohab Mameesh pointed out that revenue had actually risen 13% if calculated in Egyptian pounds, despite the slowdown in international trade. The problem is that canal fees are now Egypt’s main sources of foreign currency, which the country desperately needs to pay international contractors and repay sovereign debt as its own currency, devalued in March 2015, continues falling. Revenue has a long way to climb before it reaches $13.5 billion by 2023, forecasted by Authority Chairman Mohab Mameesh. “By 2023 we will have 100 mega-vessels crossing the canal from both directions daily,” Mameesh told delegates at the Seatrade Maritime conference in Dubai last month. To many, the projection seemed wildly optimistic, with some analysts saying it would require a 10% annual increase in global trade in merchandise from 2015-2023, compared with a 3.4% average in the decade up to 2016, as estimated by the International Monetary Fund. By allowing two-way simultaneous non-stop transit of the canal, which was not possible under the original design, the completed project would eliminate the average 11 hours of waiting time in bypass pools that a canal crossing previously entailed, Mameesh said. Other conference speakers outlined ambitious plans to develop intercontinental rail links to the Suez Canal as part of a new silk or spice route linking China and Southeast Asia to the Arabian Peninsula and Europe. Much was made of the potential boost that such connectivity could provide to oil and gas development in the Red Sea and Arabian Peninsula, as spare parts for offshore operations frequently must be sourced from Stavanger or Aberdeen, or from Antwerp or Venice for onshore projects. At home, the fast-track completion, on budget, of the country’s first post-revolutionary mega-project has undoubtedly drummed up a fair amount of nationalist pride and fervor from the Egyptian population. That could backfire if the project does not soon start showing signs of fulfilling its potential. When OPEC announced its plan to cut oil output, oil prices rose, and more importantly bunker fuel prices delivered to the Suez Canal have hit a high not seen in more than a year, Egypt’s Sisi administration and must have breathed a collective sigh of relief. The post OPEC deal gives Suez Canal hope for revenue: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/5/opec-deal-gives-suez-canal-hope-for-revenue-fuel-for-thought/ http://everythingshale.com/news/2016/december/5/opec-deal-gives-suez-canal-hope-for-revenue-fuel-for-thought/ Mon, 05 December 2016 05:56:06 http://everythingshale.com/news/2016/december/2/stanford-study-finds-efforts-to-reduce-oklahoma-seismicity-are-proving-effective/ On the same day the Associated Press reported the rate of earthquakes in Oklahoma has dropped “dramatically” since May, a new study shows how current wastewater injection policies could reduce Oklahoma’s seismic activity to background levels in five to 10 years. The new report, co-authored by Stanford University geophysicist Mark Zoback and colleague Cornelius Langenbruch, used a physics-based statistical model in Oklahoma’s two most seismically active regions to find , “On the basis of our results, the mandated saltwater injection rate reduction in 2016 was an effective step in mitigating the seismic hazard associated with the occurrence of triggered and induced earthquakes in Oklahoma because injection rates in both CO (central Oklahoma) and WO (western Oklahoma) drop below the observed triggering thresholds. Consequently, widely felt M ≥ 3 earthquakes in the affected areas, as well as the probability of potentially damaging events, should significantly decrease by the end of 2016 and return to tectonic levels within the next few years .” In February and March of this year, the Oklahoma Corporation Commission (OCC) issued directives to reduce wastewater injection into the Arbuckle formation by 40 percent below 2014 levels in the state’s two most seismically-prone areas — central as western Oklahoma. The Stanford study suggests those policies — along with the market downturn — are effectively reducing the number of earthquakes in the state. Previous research from EID showed that the rate of earthquakes in Oklahoma of magnitude 2.8 or greater had declined 81 percent in November when compared to the peak month of June 2015. Instances of M 2.8-and-greater earthquakes —the minimum size for which the Oklahoma Geological Survey (OGS) has a complete catalog — have also declined 80 percent from January, as the following EID chart illustrates. As the Associated Press notes, “The rate of earthquakes in Oklahoma has dropped dramatically since late May, when the state limited wastewater injections into energy wells…” Before the restrictions went into effect on May 28, Oklahoma averaged 2.3 magnitude 3.0 or greater quakes a day. The rate of M-3.0-or-greater quakes has dropped to 1.3 a day since then and was down to 0.8 per day in November, according to data posted on the Tulsa World website. The Stanford study notes the average injection volume-per-unit in the 15,000-square mile “ Areas of Interest ” it studied are now similar to 2009 levels, which was the last year in which earthquakes were at historical background levels. The study notes that these two areas “contain almost all recent earthquakes.” As past Zoback-led Stanford research has noted, billions of barrels of wastewater were injected into the highly-permeable Arbuckle formation over the past six years. The researchers believe the Arbuckle is in hydraulic communication with the crystalline basement, located directly below the Arbuckle, and that pressure from wastewater injection triggered seismicity in faults located in the basement. The researchers found that seismic activity increased when injection exceeded the threshold of 950 million gallons a month in central Oklahoma and 1.5 billion gallons a month in western Oklahoma. Injection rates are now below these thresholds, which is why the researchers believe earthquake rates are subsiding , “Several months after wastewater injection began decreasing in mid-2015, the earthquake rate started to decline,” Langenbruch said. “ There is no question that there is a significantly lower seismicity rate than there was a year ago .” (emphasis added) So why haven’t earthquakes completely subsided? Interestingly, the study finds that there were two- and five-month delays between the point in which earthquakes started to subside once injection rates fell below these thresholds in western and central Oklahoma, respectively. The researchers believe the delays can be explained by the fact that it takes time for the pressure from injection to spread throughout the formation, which could explain why maximum earthquake rates were seen months after peak saltwater injection in 2014 and 2015. In other words, as Langenbruch told E&E News, “It is clear that these earthquakes can be stopped by reducing injection rates. The bad news is, it will take some time.” But moving forward, the researchers believe that the OCC’s wastewater restrictions will yield a 58 percent decrease in M-3.0-or-greater earthquakes in 2017 and reduce the chance of a quake as large as 5.0 by 43 percent. Seismicity linked to produced water injection — not fracking flowback water It bears repeating that injection of produced water from day-to-day production is the primary cause of Oklahoma’s seismicity — not the fracking process or injection of fracking flowback water. A recent Zoback study on Oklahoma’s induced seismicity actually found that more than 95 percent of wastewater disposed of in Oklahoma’s most seismically active areas is brine that is co-produced with oil and gas, as Zoback has explained , “Basically, it is not hydraulic fracturing and it’s not hydraulic fracturing flowback water. It’s produced water.” The new Stanford report elaborates further on this fact, “Most of the oil wells in Oklahoma produce more water than oil. Because the produced water is too saline to be put to beneficial use, it is usually recycled back into the producing formation as part of water flooding operations. However, in the past few years, extremely large volumes of produced saltwater were injected into the highly permeable Arbuckle group. This formation is in hydraulic communication with faults in the crystalline basement, where natural geologic processes have accumulated stress on preexisting faults. The increase in pressure resulting from injection reduces the frictional resistance to sliding and can trigger the release of the accumulated stress in earthquakes…” As E&E News noted , the areas where most of Okalahoma’s seismic activity has been concentrated are in the Mississippi Lime play, “which has historically had a higher ration of wastewater than most formations” but “is not a growth region at the moment.” Industry remains supportive Although reducing wastewater injection volumes has reduced seismicity, it is not without cost. Small businesses, local job opportunities and tax revenue in the areas where restrictions are in place have all taken a hit as a result of the OCC’s directives. But despite the “ significant economic impact ” that some of the OCC’s actions have had on oil and natural gas companies, the industry has been coordinating with the state in its response, due to the shared primary objective of managing induced seismicity. “With the swarm we’ve had, we think the action the commission is taking is prudent,” said Kim Hatfield with the Oklahoma Independent Petroleum Association last fall, after a series of seismic events around Cushing. Chad Warmington with the Oklahoma Oil and Gas Association also said earlier this year that the industry “will continue collaborating with state officials, regulators and researchers to determine what information is needed to help make informed, scientific-based decisions that reduce seismic activity in the state.” The industry has invested over $35 million to reduce earthquake risks since March 2015. Companies have also helped secure funds for additional seismic monitoring stations and shared proprietary data with scientists and regulators, including information on previously unmapped faults. Industry is taking the challenge of managing induced seismicity very seriously. And fortunately, the new Stanford report shows that collaboration with regulatory authorities is producing results, and that induced seismicity can be managed going forward. http://everythingshale.com/news/2016/december/2/stanford-study-finds-efforts-to-reduce-oklahoma-seismicity-are-proving-effective/ http://everythingshale.com/news/2016/december/2/stanford-study-finds-efforts-to-reduce-oklahoma-seismicity-are-proving-effective/ Fri, 02 December 2016 23:50:48 http://everythingshale.com/news/2016/december/2/confirmed-rockefellers-admit-funding-pay-to-play-attack-journalism-against-exxon/ After over a year of continuous denial, two members of the Rockefeller family appeared this morning on national TV to own up to the fact that they specifically paid the Columbia School of Journalism and InsideClimate News to write hit pieces on ExxonMobil, in what can only be characterized as a pay-to-play attack on the company. A segment that aired on  CBS This Morning with Charlie Rose featured interviews with David Kaiser of the Rockefeller Family Fund and Valerie Rockefeller Wayne of the Rockefeller Brothers Fund, reporting: “The charities [the Rockefellers] run funded investigations that appeared in the Los Angeles Times and InsideClimate News.” In yet another sign that the Rockefellers have suddenly decided to embrace their bankrolling of #ExxonKnew publically, NPR published a column over the weekend by Marcelo Gleiser who even attributed the hit pieces to the Rockefeller Family Fund, not InsideClimate or Columbia. As Gleiser put it,   “The investigative report from the RFF is quite clear in its findings.” This admission is especially striking considering that the Rockefeller foundations that are bankrolling this campaign – primarily the Rockefeller Brothers Fund and the Rockefeller Family Fund – have maintained that they have “hands-off” relationships with InsideClimate and Columbia, and therefore didn’t exercise any editorial control over the results of their Exxon climate “investigations.” As Lee Wasserman of the Rockefeller Family Fund said in an interview  with  Reuters  last March, “ No specific company was targeted in our push to drive better public understanding and better climate policy .” That same month, InsideClimate News reported : “Rockefeller Family Fund Director Lee Wasserman said the charity supports public interest journalism, including InsideClimate News, but  keeps at arm’s length from the work being done . ‘ We first learned about it when everybody else read about it ,’ Wasserman said. ‘The  information that was unearthed was stunning  and struck us as beyond the pale of what a corporation interested in protecting the public interest would do. … As a matter of good governance, we felt it imperative to sever our tie with the corporation.’” And, of course, InsideClimate’s website claims : “Donors who support our award-winning environmental journalism do not have access to our editorial process or decision-making.” The Columbia School of Journalism has also denied that the Rockefellers had any say in what they’ve been up to. In fact, the Columbia Journalism Review interviewed Dean of the Columbia Graduate School of Journalism, Steve Coll, and reported the exchange this way: “ Both the [ Los Angeles ]  Times  and Coll have reiterated that the project’s funders had a hands-off relationship with its journalism …In addressing those complaints in his written response to Exxon Mobil, Coll mentioned the energy giant’s support of Columbia University research in other fields: ‘You therefore understand that the issue is not who provided funding for this or any other Columbia University project, but whether the work is done independent of the funders… The fact is that this reporting was not subject to any influence or control by the funders,  the  Times  maintained full editorial control over all that it chose to publish, and your letter provides no information to doubt that this is so.’” (emphasis added) Coll went on to explain, “It’s similar to the ethics that had to be managed in the days when this kind of work was supported by commercial advertising,” Coll says. “[Advertisers] were very financially important to the newspaper, but the publisher and the editor in the newsroom figured out how to build a wall between the advertisers and the work. And that’s exactly what we have to do here:  We have to build a wall between the funders and the work. That’s what I’m responsible for .” (emphasis added) Failure to disclose The Rockefellers haven’t always been so forthcoming about their involvement in these hit pieces. In fact, when the Columbia stories appeared in the  Los Angeles Times  last year, there was  no mention  whatsoever that the Columbia School of Journalism was funded by Rockefellers. Only after Energy In Depth and other news outlets  called them out  did the outlet quietly add a correction noting the funding source, but that happened several months after the stories were published. It wasn’t just an oversight by the LA Times , either. Even the website of the Columbia Energy and Environment Reporting Fellowship  did not originally disclose its Rockefeller funding  according to an  archived copy of the page . But once again, after they were called out, the fellowship’s website was quietly updated to include its financial connections to the Rockefeller Family Fund and other #ExxonKnew organizations. After this disclosure problem came to light, the Columbia Journalism Review  reported  that it raises ethical questions, specifically about funding sources for non-profit organizations that produce what many might mistake for objective reporting. As the CJR  explains , “But the practice also  raises questions of balance  in what subjects get reported, as well as  appropriate disclosure of the outside funders and their political leanings . In the case of Columbia, The Energy and Environmental Reporting Project is  funded in part by a group of philanthropic organizations, at least one with a clear advocacy bent  on the issue. The  names of the funders were not listed  on the  two   articles  when they were published by the Los Angeles Times, though they were  later added online .” (emphasis added) Some have even suggested that the Columbia School of Journalism stands to lose its once sterling reputation in the wake of this scandal. Forced to come clean? Considering all the things that the #ExxonKnew campaign has tried to keep hidden, owning up to bankrolling the entire #ExxonKnew effort was likely not in the original plan.  But since they’ve been exposed to this great extent, they’ve pretty much had to come clean. That’s why they’re appearing on CBS This Morning and writing columns like the one that appeared in New York Review of Books in which, Lee Wasserman of Rockefeller Family Fund admitted that his organization “paid for a team of independent reporters from Columbia University’s Graduate School of Journalism to try and determine what Exxon and other oil and gas companies had really known about climate science, and when.” This new strategy has put the spotlight on the family and revealed dissent among their ranks by those in the Rockefeller family that feel the campaign against Exxon is “deeply misguided.” In the CBS segment today, Ariana Rockefeller of the Rockefeller Foundation (which is the flagship foundation and is separate from Rockefeller Family Fund and Rockefeller Brothers Fund) said the Rockefellers bankrolling #ExxonKnew “do not speak on behalf of all 200 family members.”  She also told the New York Times Rockefeller Brothers Fund and Rockefeller Family Fund’s efforts are “counterproductive to our goal of protecting the environment by undermining Exxon’s ongoing good work in clean and renewable energy.” The Rockefeller’s decision to come clean as the masterminds behind the #ExxonKnew campaign has not had the effect they had hoped for. It has exposed a deep rift within their family and raised serious ethical questions about editorial control in non-profit journalism. In an interestingly timed email, InsideClimate News announced it is seeking donations “to ensure that our award-winning nonprofit news organization remains fiercely independent and courageously persistent.” (emphasis added) That ‘fierce independence’ apparently doesn’t apply when the Rockefellers are signing the checks.     http://everythingshale.com/news/2016/december/2/confirmed-rockefellers-admit-funding-pay-to-play-attack-journalism-against-exxon/ http://everythingshale.com/news/2016/december/2/confirmed-rockefellers-admit-funding-pay-to-play-attack-journalism-against-exxon/ Fri, 02 December 2016 19:45:35 http://everythingshale.com/news/2016/december/2/ex-saudi-minister-on-opec-we-tend-to-cheat/ Speaking at an event in Washington on Friday – staged by the think tank Center for Strategic and International Studies – Al-Naimi said, “unfortunately, we tend to cheat.” There's still more supply than demand (now). If (the OPEC countries) make a concentrated effort to reduce there will be a balance. But that remains to be seen.” RELATED:  OPEC said to agree to output cut of 1.2 million barrels a day Al-Naimi, who is touring on behalf of his new memoir, “Out of the Desert,” was replaced by Saudi Arabia in May after running the country’s oil ministry since 1995. He has widely been credited with leading OPEC’s move not to cut crude production in November 2014, driving down global prices and putting pressure on U.S. shale producers. But Friday Naimi threw some water on the idea that was OPEC’s grand plan. In his telling, countries like Algeria and Venezuela had wanted the cartel to reduce supply – but were not willing to do so themselves. Nobody wants to take a cut except Saudi Arabia,†he said. http://everythingshale.com/news/2016/december/2/ex-saudi-minister-on-opec-we-tend-to-cheat/ http://everythingshale.com/news/2016/december/2/ex-saudi-minister-on-opec-we-tend-to-cheat/ Fri, 02 December 2016 19:22:31 http://everythingshale.com/news/2016/december/2/permian-leads-latest-increase-in-oil-rigs-baker-hughes-says/ West Texas’ active Permian Basin added seven rigs actively drilling for oil this week. While the Permian begins to boom, the net rig count in the rest of the country declined. The U.S. rig count grew by just four overall this week, including three drilling for oil and one seeking natural gas, according to Baker Hughes. The Williston Basin, which is mostly in North Dakota, lost two rigs, while two rigs were removed from Colorado’s DJ-Niobrara basins. Louisiana lost four. South Texas’ Eagle Ford shale, however, tacked on two. The total count is 587 rigs, up from a low of 404 in May, according to Baker Hughes. Of the total, 477 are primarily drilling for oil. The Permian now accounts for 235 rigs, almost half of the nation's oil rigs. The next most active area is Texas' Eagle Ford shale with 40 rigs, according to the Baker Hughes data. Despite this week's increase, the oil rig count is down 70 percent from its peak of 1,609 in October 2014, before oil prices began plummeting. But U.S. oil prices have risen above $51 a barrel after OPEC agreed Wednesday to curb oil production. http://everythingshale.com/news/2016/december/2/permian-leads-latest-increase-in-oil-rigs-baker-hughes-says/ http://everythingshale.com/news/2016/december/2/permian-leads-latest-increase-in-oil-rigs-baker-hughes-says/ Fri, 02 December 2016 18:25:30 http://everythingshale.com/news/2016/december/2/australian-lng-company-makes-houston-home/ The problem? No one realizes we're here,†said Greg Vesey, the new chief executive of Liquefied Natural Gas Ltd. and retired Chevron executive. Liquefied Natural Gas Ltd., better known as LNG Ltd., this week received final federal regulatory approval to export LNG and begin building its $4.3 billion Magnolia LNG project south of Lake Charles, La. However, LNG Ltd. only has 25 percent of the proposed LNG output contracted, and more buyers are needed to finance the beginning of construction. That's better than most proposed LNG export projects along the Gulf Coast, but not enough. The goal is to start construction in roughly a year and have the project come online in 2021 or, more likely, 2022 , when global LNG demand is forecast  to pick up again. If you want it then, you really need to work with us now,†Vesey said of potential buyers. We're getting much richer discussions.†LNG Ltd. was  founded 14 years in Perth, Australia with a focus on developing LNG projects there. The focus eventually shifted to North America largely because of the cheap and ample natural gas supplies from the shale revolution. The goal is building modular natural gas liquefaction facilities, called trains, smaller and cheaper than competing projects. So the company opened a Houston office and eventually made it a dual headquarters. LNG Ltd. only has six employees left in Australia, even though the company still trades on the public stock exchange  in Sydney. There's a team of about 20 people in Houston, including Vesey. The 35-year Chevron veteran retired in December 2015 and was looking to take on corporate board seats this year. Instead, Vesey, 58, had discussions with the LNG Ltd. board leadership that shifted to the CEO role. In November LNG Ltd. named a new Houston-based chairman, Paul Cavicchi, a veteran of GDF Suez Energy, now called Engie. While a handful of LNG export projects along the Gulf Coast are already under construction in Louisiana, Freeport and Corpus Christi, LNG Ltd. is competing with a so-called second wave of proposed projects in Texas and Louisiana. But only LNG Ltd. thus far has full regulatory approval and is thus shovel ready.†http://everythingshale.com/news/2016/december/2/australian-lng-company-makes-houston-home/ http://everythingshale.com/news/2016/december/2/australian-lng-company-makes-houston-home/ Fri, 02 December 2016 18:09:41 http://everythingshale.com/news/2016/december/2/market-currents-focus-shifts-to-non-opec-producers/ 1) As the dust settles on the OPEC meeting, we don’t have long to wait before the next whirlwind arrives to stir things up. The Doha meeting of OPEC and NOPEC members is a week today, where OPEC will express to key NOPEC members (Russia, Oman, Kazakhstan, Azerbaijan, Mexico and others?) that their production cut of 1.2 million barrels per day hinges on NOPEC cutting by 600,000 bpd. Russia has said it will do the heavy-lifting for NOPEC, committing to a 300,000 bpd cut. Parallels can be drawn betwixt Saudi and Russia. Just as Saudi has kept production elevated in recent months – when it usually sees a seasonal post-summer swoon – Russian production has just reached a new post-Soviet era high, averaging 11.21 million barrels per day last month. ( Production peak at 11.23mn bpd ). The ole ‘ ramp up n’ cut ‘ is becoming a familiar theme. 2) Although brighter times lie ahead for the Mexican energy complex amid energy reform, immediate challenges are faced as its oil production drops to the lowest since 1980 (hark, below). Nonetheless, it will hold its first deep-water auction of 10 blocks on Monday, which could herald the turning point for the ailing Mexican oil industry, as it looks to secure as much as $11 billion in international investment to revive its oil production, ergo, its fortunes. 3) Yet despite the drop in Mexican oil production, exports continue to hold up as Mexico’s ailing refinery industry processes less crude. We can see in our ClipperData that this is reflected in higher gasoline imports from the U.S. Gasoline imports are above 400,000 barrels per day in November to reach a high for the year. Our data show crude export loadings have held above 1.2mn bpd for the last three months: 4) Interesting to see on the chart below how the inverse relationship betwixt the US dollar and crude oil has reversed – right at the time of the OPEC Algiers meeting in late September. Since then, the two have moved in lockstep, as the expectation of a U.S. interest rate hike gets priced in, as well as an OPEC production cut. 5) After natural gas storage started this year’s injection season at a lofty 2-4-6-8 (who do we appreaciate!) Bcf, we have closed the season out at a new record 4,047 Bcf. But as temperatures fall and heating demand increases, storage has now swung back below the 4,000 Bcf mark, with a 50 Bcf draw from yesterday’s storage report. This was a wee bit larger than the five-year average of -44 Bcf, and mucho larger than last year’s -35 Bcf. As below-normal temperatures blanket the key demand regions of the U.S. on the 8-14 day outlook, natural gas prices have rallied swiftly in recent weeks to mid-three dollardom, a one-year high, up 30 percent since mid-November. (It makes oil’s price swings look tame!). http://everythingshale.com/news/2016/december/2/market-currents-focus-shifts-to-non-opec-producers/ http://everythingshale.com/news/2016/december/2/market-currents-focus-shifts-to-non-opec-producers/ Fri, 02 December 2016 18:04:57 http://everythingshale.com/news/2016/december/2/us-gasoline-prices-spike-in-response-to-opec-deal/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices The January reformulated blendstock for oxygenate blending futures contract on the New York Mercantile Exchange settled at a better than five-month high on the spot continuous chart in concluding its first session as nearest delivery on December 1, continuing a midweek rally ignited by an historic agreement by the Organization of the Petroleum Exporting Countries (OPEC). After two sessions, which included the expiration of the December RBOB contract on November 30, nearest delivered gasoline futures had rallied 16.99cts or 12.3% to $1.5470 gallon. The previous high settlement on the spot continuous chart was reached during the summer driving season on June 23 at $1.6035 gallon, less than 10 days after US gasoline demand reached a weekly record high of 9.815 million bpd, per data from the Energy Information Administration. During their biannual meeting in Vienna on November 30, OPEC agreed to a 1.2 million bpd cut in their production to 32.5 million bpd that takes effect January 1, with the agreement creating a surge in futures trading. The Chicago-based CME Group reported single-day volume traded in Energy-Complex products on November 30 at a record high 4,510,408, well above the previous record of 3,932,201 contracts on February 11. NYMEX West Texas Intermediate futures volume spiked to 2,530,530 contracts, soaring past the prior record of 1,861,909 contracts set the day following the presidential election on November 9. WTI futures with nearest delivery topped $50 bbl for the first time in nearly six weeks on December 1, rallying $5.82 or 12.9% in two sessions to a $51.06 bbl settlement, and could test resistance near $60 bbl in the coming weeks. Volatility in oil futures is expected to increase further following the OPEC agreement, which cuts production for the first time in eight years. OPEC expects another 600,000 bpd in production cuts from non-OPEC members, with Russia reportedly agreeing to reduce output by 300,000 bpd. The quota agreement has a six-month term, with OPEC to review its affect and market conditions in May 2017. The market will closely watch OPEC members for cheating, with the cartel having a checkered past in complying with quotas. Also, the 32.5 million bpd production quota, the low end of a pledge made by members in Algiers on September 28, doesn’t include Indonesia, which suspended its membership, so the production cut is less dramatic than the headline number. Secondary sources report Indonesia produced 722,000 bpd of crude oil in October. The agreement is nonetheless significant and seen aided by strong growth in oil demand from the United States. However, the upside in crude values is also expected to be limited, given ongoing excesses in global oil supply, with US commercial crude inventory at 488.1 million bbl on November 25, 30.9 million bbl or 6.8% more than the comparable year ago period, data from the EIA shows. Moreover, US shale oil producers whom have already been reactivating rigs that helped boost domestic production to an 8.699 million bpd 5-1/2 month high during the Thanksgiving Day holiday week and 271,000 bpd above a 26-month low plumbed in the final days of the second quarter, are seen as benefactors of OPEC’s cut. Many more wells are seen economical with WTI at $55 to $60 bbl that would add oil to the market and slow the draw down in bloated inventory. Gasoline economics are healthy in the United States amid ample crude supply and strong demand both domestically and for exports. Statistics from the EIA for September, the most recent monthly data available, shows U.S. refinery and blender net production of finished gasoline was 10.3 million bpd in September, 303,000 bpd above a year ago. “Refinery output remains strong even in the late fall; the first two weeks of November had a net output of 10.5 million b/d and 10.2 million b/d, respectively, compared with output of 9.7 million b/d and 9.6 million b/d for the same weeks last year,” said EIA in a weekly report November 30. After nearly 11 months, gasoline supplied to the primary market has averaged 9.394 million bpd, 250,000 bpd or 2.7% above the corresponding period in 2015. EIA shows gasoline exports averaged 564,000 bpd in September, up 208,000 bpd from September 2015, with 60% of the country’s gasoline exports that month sent to Mexico. Another dynamic in a busy November for the oil market was an increase in the required amount of renewables in the transportation sector from a May proposal. On November 23, the Environmental Protection Agency finalized the 2017 Renewable Volume Obligation for the nested renewable fuel category which is overwhelmingly satisfied by conventional corn-based ethanol at the 15 billion gallon statutory level, 200 million gallons more than proposed in May. Tradable D6 Renewable Identification Numbers, credits obligated parties under the Renewable Fuel Standard–refiners, importers and blenders–submit to the EPA to show compliance again spiked above $1, surging nearly 30cts or 38% from a mid-November low to $1.07 on December 1. The blend wall, which refers to the 10% maximum ethanol content level in gasoline that can be used in all vehicles on US roads, remains an impediment in adding more ethanol to the gasoline pool even as the mandate to do so expands, spiking RIN values. In a November 28 blog from consulting engineers Turner, Mason & Company, they project ethanol in the gasoline pool at 14.771 million gallon or 10.18% in 2016 compared to 13.59 million gallons or 10.16% in 2012. “The percentage of ethanol in the gasoline pool has stayed remarkably constant over the past five years. The general conclusion is that the blend wall is still a limitation and demand for E15 and E85 has not grown significantly,” explain the consultants.   To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market , click here .   The post US Gasoline Prices Spike in Response to OPEC Deal appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/december/2/us-gasoline-prices-spike-in-response-to-opec-deal/ http://everythingshale.com/news/2016/december/2/us-gasoline-prices-spike-in-response-to-opec-deal/ Fri, 02 December 2016 17:49:35 http://everythingshale.com/news/2016/december/2/egypt-awards-development-blocks-to-apex-international-energy/ Egypt General Petroleum, which is run by the country’s Ministry of Petroleum, awarded the development areas in two blocks during a bid round, according to an Apex statement. Both exploration areas are in the Abu Gharadig Basin in Egypt’s Western Desert, which is considered a highly productive region. RELATED: New oil and gas company establishes Houston office Apex plans to invest $27.4 million in first-phase exploration, consisting of obtaining three-dimensional seismic data and drilling six exploration wells. In a statement, Apex founder and CEO Roger Plank said the development area helps Apex establish a presence in Egypt’s “prolific” Western Desert. “With 1.7 million acres now in hand, this is an important step in our mission to build an oil and gas business of scale in Egypt and we are eager to start investing in the considerable potential of these blocks,” Plank said. Based in Houston and Cairo, newly formed Apex announced that it would pursue Middle Eastern and North African developments but that Egypt was the company’s top investment priority. http://everythingshale.com/news/2016/december/2/egypt-awards-development-blocks-to-apex-international-energy/ http://everythingshale.com/news/2016/december/2/egypt-awards-development-blocks-to-apex-international-energy/ Fri, 02 December 2016 14:36:36 http://everythingshale.com/news/2016/december/2/oil-heads-for-biggest-weekly-advance-in-15-months/ Futures were little changed in New York and poised for an 11 percent weekly gain. OPEC's three largest producers — Saudi Arabia, Iraq and Iran — overcame disagreements to reach Wednesday's pact to reduce the group's output by 1.2 million barrels a day, while Russia pledged a cut of as much as 300,000. The deal will accelerate the decline of global stockpiles, Secretary-General Mohammad Barkindo said in a Bloomberg TV interview Thursday. The Organization of Petroleum Exporting Countries set a collective output target at the lower end of the range outlined two months ago in Algiers, sending oil prices above $50 a barrel and prompting predictions of a possible rally to $60 from Goldman Sachs Group Inc. and Morgan Stanley. Yet some analysts warned the surge in prices may encourage higher output from producers outside the group, including in the U.S. The last time the bloc set a collective quota, members exceeded it for 20 of the 24 months before the cap was scrapped at the end of 2015. The decision has removed a lot of downside risk from the market and we'll probably sniff at $60 even this year,†said  Bjarne Schieldrop, chief commodities analyst at SEB AB bank in Oslo. The OPEC decision is bullish for first half of 2017 and bearish for the second half because higher prices will bring back U.S. oil faster to the market. There will be a shale party.†West Texas Intermediate for January delivery was down 2 cents at $51.04 a barrel on the New York Mercantile Exchange as of 9:04 a.m. in London. Prices gained 3.3 percent to $51.06 a barrel on Thursday, adding to Wednesday's 9.3 percent surge. Total volume trad ed was about 74 percent above the 100-day average. Prices are poised for the biggest weekly gain since the week ended Aug. 28, 2015. Exceeding quota Brent for February settlement lost 10 cents to $53.84 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 4.1 percent to $53.94 a barrel on Thursday. The global benchmark traded at a $1.85 premium to WTI for the same month. Russia's output cuts should be spread proportionally between the country's producers, who have said they support the move, Energy Minister Alexander Novak told reporters Thursday. No oil company has so far explained how they will implement the cuts. State-controlled Rosneft PJSC, the country's largest producer, is likely to bear most of the burden, according to Renaissance Capital. OPEC's cuts are intended to shrink the world's bloated oil stockpiles back to a normal level, paving the way for prices to rise to more than $60 a barrel. “Our objective has been since Algiers to stimulate the joint deal with non-OPEC and accelerate the drawdown of stocks,†Barkindo said. “Inventories have continued to weigh down on prices†and all of OPEC wants to see prices higher, he said.   http://everythingshale.com/news/2016/december/2/oil-heads-for-biggest-weekly-advance-in-15-months/ http://everythingshale.com/news/2016/december/2/oil-heads-for-biggest-weekly-advance-in-15-months/ Fri, 02 December 2016 14:19:33 http://everythingshale.com/news/2016/december/2/a-house-divided-rockefellers-in-family-feud-over-exxonknew/ Rockefeller family members are beginning to speak out against the #ExxonKnew campaign, revealing a sharp divide within the family about the political targeting of oil and natural gas producer ExxonMobil. It’s also a devastating blow to the campaign, which has been flailing for some time. On a segment that just aired this morning on CBS This Morning with Charlie Rose , Ariana Rockefeller said she disapproves of the #ExxonKnew crusade and a number of other anti-fossil fuel efforts. She told CBS: “These family funds do not speak on behalf of all 200 family members.” “I don’t think denouncing a family legacy is the best way to go about doing this.” Ariana Rockefeller’s appearance on CBS comes just days after the New York Times reported her strong criticism of the Rockefeller Family Fund’s anti-Exxon campaign. She called it “deeply misguided” and “counterproductive to our goal of protecting the environment by undermining Exxon’s ongoing good work in clean and renewable energy.” Background on Rockefellers: $4 Billion vs. $1 Billion The divide within the family is notable because two foundations that carry the Rockefeller name have almost entirely bankrolled the #ExxonKnew campaign. These foundations – the Rockefeller Family Fund and the Rockefeller Brothers Fund – have paid for so-called investigative journalism, the development of the legal strategy used by a group of liberal state attorneys general, and political activism from anti-fossil groups. Most news outlets to date, however, have incorrectly assumed the entire Rockefeller family unanimously supports the #ExxonKnew campaign. In reality, just two of the smaller, more left wing Rockefeller foundations are actually behind the campaign. These foundations, the Rockefeller Brothers Fund ( $885 million in assets ) and the Rockefeller Family Fund ( $103 million in assets ), are well known funders of anti-fossil fuel crusades against the Keystone XL pipeline and large funding of anti-fossil fuel organizations like 350.org. Meanwhile, the Rockefeller Foundation, which was founded by John D. Rockefeller himself in 1913, totals over $4.1 billion in assets in 2015 . It continues to be a major philanthropic organization. And Ariana Rockefeller’s father, David Rockefeller Jr. , is a trustee of the foundation and until recently was its chairman, too. Not the First Time the Rift Revealed This is not the first time the divide in the family has been exposed between the Rockefeller Foundation and the separate anti-fossil fuel Rockefeller funds.  RBF claimed it would divest from fossil fuels in 2014, while RFF said it would do the same in March, 2016. But as The Guardian  reported, “the much wealthier Rockefeller Foundation, whose endowment tops $4bn, is understood to be opposed to divestment for now.” RFF and RFB Stepping in the Spotlight as #ExxonKnew Campaign Folds The public rift in the family over #ExxonKnew comes as RFF and RFB race to revive a failed campaign. After spending millions of dollars promoting it, RFF and RFB felt forced to step up their roll to garner more media coverage. Yet these efforts will ultimately prove as successful as every other #ExxonKnew endeavor. With even members of the Rockefeller family now voicing the criticism of the campaign publically, now is the time for the campaign to finally end. Remember: The Rockefellers who are funding the #ExxonKnew campaign are a minority within the Rockefeller family. They can’t even convince their own relatives – the people who know them best – that the #ExxonKnew crusade is justified. The rest of the Rockefeller family has had enough of this debacle and now they are going public with their disapproval. It’s hard to imagine how much worse things can get for the #ExxonKnew campaign. Likewise, it’s hard to see how much longer it can continue after so many embarrassing failures.   http://everythingshale.com/news/2016/december/2/a-house-divided-rockefellers-in-family-feud-over-exxonknew/ http://everythingshale.com/news/2016/december/2/a-house-divided-rockefellers-in-family-feud-over-exxonknew/ Fri, 02 December 2016 13:02:50 http://everythingshale.com/news/2016/december/2/china-dominates-conversations-at-platts-asian-steel-events/ S&P Global Platts stages many steel conferences and forums around the world, but regardless of the location China is invariably the dominating topic. And this was again the case at our Ferrous Forum in Tokyo and Steel Markets Asia conference in Mumbai, both held last month. Within China, there is a sense that the steel industry is starting to cool off – with some industry participants going as far as to describe it as a “sunset industry.” But outside of China, competing steel countries would liken it more to the heat of the midday sun, with many companies feeling burnt by Chinese imports and overcapacity. Japanese attendees listen to S&P Global Platts and TSI editors and analysts at the Platts Steel and Metals Forum in Tokyo. In Japan, if the audience felt like this they were too polite to say – that is until the cocktail hour at the end of the presentations, when some congenial lubrication allowed many inquiries and questions around China to emerge. Attendees wanted to know more about steel price trends; how Chinese mills had weathered the storm in the past year or two; how the Chinese steel industry felt about Beijing’s consolidation push; and whether mills had been affected by tighter environmental controls, among many more questions. Japanese attendees took the opportunity to better understand their Chinese rivals – even though, on the face of it, steel mills in these two countries run their businesses very differently. Japanese mills typically stick to long-term upstream and downstream supply deals, and do their best to protect themselves from price volatility. Chinese mills, on the other hand, are happy to enter the fray of spot pricing, including negotiating for premiums and discounts on monthly average indices, and participating in auctions for certain steelmaking raw materials, such as ferroalloys. Many mills now participate in steel and iron ore futures (not always for hedging purposes), which would be anathema to most Japanese mills. Meanwhile…India peers over its shoulder at China’s exports Unlike Japan and China, where steel output and consumption have largely plateaued, India’s steel sector has plenty of growth to look forward to. India’s steel consumption per capita in 2014-15 was just 61 kg, compared with over 500 kg for both Japan and China, and 70% of India’s population is rural compared with 51-52% in China. But India is desperate to become self-sufficient, particularly in manufacturing. In the words of government steel secretary Dr Aruna Sharma at our Mumbai conference, India wants to break free from its “dependency syndrome.” This means creating space for India’s steel industry to potentially treble its steel production capacity to 300 million mt/year by the end of next decade. India has imposed a number of trade defense measures to protect its steel industry, which fears cheap imports from China could undermine its ambitions for both the sector and economy. Some of the tensions around these issues spilled over into a particularly testy panel discussion at Platts’ Mumbai conference. From left: Paul Bartholomew, Annalisa Jeffries (both Platts); Jayant Acharya, Executive Director, JSW Steel; P.K.Singh, Chairman, Steel Authority of India Ltd., and CISA’s Li Xinchuang at the lamp-lighting ceremony during the Steel Markets Asia Conference in Mumbai. Indian steelmakers on the panel and in the audience rounded on China Iron & Steel Association vice-chairman, Li Xinchuang , accusing China of failing to reign in its capacity and exports. The accusation was stoutly defended by Mr Li, who argued that China was making a big effort in difficult circumstances, and a “net” reduction of 100 million-150 million mt of steel capacity would be removed by 2020. He acknowledged that China’s ratio of exports to production had jumped to 15%, but he pointed out that Japan exported 40% of its output and South Korea 46% in 2015. In a bid to maintain a fair and balanced discussion, the panel chairman raised the specter of India one day being on the receiving end of similar criticism through bringing on so much new capacity in an already oversupplied world – particularly if steel capacity growth outpaces consumption. Not surprisingly, this notion was dismissed by Indian steel panelists. Notwithstanding India’s ambitions for its steel sector, it will never reach China’s proportions. Therefore we can look forward to much more debate and discussion around China’s steel industry in future Platts events. The post China dominates conversations at Platts Asian steel events appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/2/china-dominates-conversations-at-platts-asian-steel-events/ http://everythingshale.com/news/2016/december/2/china-dominates-conversations-at-platts-asian-steel-events/ Fri, 02 December 2016 04:01:08 http://everythingshale.com/news/2016/december/2/reduce-maintenance-costs-with-the-iiot-and-predictive-asset-analytics/ Industrial organizations across multiple sectors are under pressure from shareholders, regulators and customers to increase performance and reliability while keeping costs low. These conditions mean it’s more important than ever for organizations to optimize maintenance and operations. While reactive and preventive maintenance continue to be a key part of a comprehensive maintenance program, more proactive condition-based and predictive strategies are required for critical assets. The growth of the Industrial Internet of Things (IIoT) offers a huge business opportunity to leverage existing data to drive business results by adopting a proactive predictive maintenance strategy. The average plant has over 8,000 data points, and a utility may have more than two million points across their generation fleet. However, without context that data is simply noise, and operators are unable to use it to make informed decisions. Predictive asset analytics , enabled by the IIoT, is key to reducing unscheduled downtime and maintenance costs. Using predictive analytics, customers are able to predict and diagnose problems before they occur. This shifts maintenance from a reactive process to a proactive strategy, moving the organization higher up the maintenance maturity pyramid . When selecting a predictive analytics solution, there are some key points to consider. Hardware and software agnostic solutions are critical, as it drastically reduces implementation cost and time to value. Another important factor is ease of use, specifically in the model building process. Look for a solution with an intuitive model building capability that doesn’t require any programming or detailed equipment knowledge. In addition, for customers who lack the resources to comprehensively monitor their own assets, some vendors provide turnkey remote asset monitoring as a service, including installation, system training, modeling, monitoring, and reporting of anomalies done by an offsite team of experts. This supplements the existing maintenance team, reduces the burden on the organization and is a great way to get started quickly. Enabling Predictive Maintenance As part of Schneider Electric’s Enterprise APM platform, Avantis PRiSM uses advanced pattern recognition and machine learning to identify potential problems days, weeks or months before traditional alarm set points. By catching problems before they occur, PRiSM allows users to reduce unscheduled downtime, better plan maintenance activity, reduce costs and improve asset performance. For companies wishing to outsource monitoring activities, Schneider Electric’s Monitoring & Diagnostics Services Center provides comprehensive offsite monitoring and diagnostic guidance. Companies using PRiSM see immediate results. Two prominent successes we have seen include Tata Power, one of the largest power companies in India, and EDF Group, the largest electricity generator in the world. When Tata Power installed PRiSM across their entire generation fleet , a single early warning catch saved almost $300,000. EDF Group saw even greater benefits when they implemented PRiSM to monitor their nuclear, hydro and traditional assets – the system saved the company over 1 million euros with one catch. To learn more about predictive analytics, listen to the Automation World podcast on Predictive Asset Analytics Enabled by the Industrial Internet of Things , featuring Rob McGreevy, vice president of Information, Asset and Operations Management for Schneider Electric. You’ll hear how predictive asset analytics contributes to closed-loop operations, the value that the IIoT unlocks for industrial organizations, and the importance of well-defined objectives and industry-specific solutions. For more information on Avantis PRiSM and Schneider Electric’s comprehensive Enterprise APM solution, visit http://software.schneider-electric.com/eapm. The post Reduce Maintenance Costs with the IIoT and Predictive Asset Analytics appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/december/2/reduce-maintenance-costs-with-the-iiot-and-predictive-asset-analytics/ http://everythingshale.com/news/2016/december/2/reduce-maintenance-costs-with-the-iiot-and-predictive-asset-analytics/ Fri, 02 December 2016 03:57:37 http://everythingshale.com/news/2016/december/2/buffett-s-firm-facing-pressure-to-sell-fossil-fuel-stocks/ Nebraskans for Peace said Thursday it had submitted a formal proposal for Berkshire Hathaway Inc. shareholders to consider next spring. The same group failed last year with a different proposal related to climate change. Buffett didn't immediately respond to questions about the proposal Thursday. His opinion of the idea will be important because he controls nearly one-third of Berkshire's voting stock. The proposal would apply only to Berkshire's stock investments, such as its nearly 81 million shares of Phillips 66 stock. But the proposal would not apply to the companies it owns outright, which include several major utilities - such as MidAmerican Energy in Iowa, NV Energy in Nevada and PacifiCorp in the Northwest - and specialty chemical maker Lubrizol. Tim Rinne with Nebraskans for Peace said he hopes Buffett and Berkshire shareholders will take a stand at next May's annual meeting because the renowned investor could have a big impact on public opinion. It would be great if Berkshire shareholders would step up and divest of its fossil fuel investments,†Rinne said. Earlier this year, Buffett told shareholders that he didn't think it made sense to follow the group's first proposal requiring a report detailing the risks climate change creates for Berkshire's insurance companies. Buffett has said that the fact that Berkshire generally writes insurance policies for one-year periods allows it to regularly re-evaluate risks, such as climate change. Buffett also resisted the group's calls to take a public stance in favor of measures to reduce consumption of fossil fuels. The conglomerate Buffett leads as chairman and CEO owns more than 90 companies. Besides utilities, it owns Geico and several other insurers, manufacturers of aviation parts and precision tools and clothing, furniture, ice cream, private jet and jewelry companies. It also has major investments in such companies as Coca-Cola Co., IBM and Wells Fargo & Co. http://everythingshale.com/news/2016/december/2/buffett-s-firm-facing-pressure-to-sell-fossil-fuel-stocks/ http://everythingshale.com/news/2016/december/2/buffett-s-firm-facing-pressure-to-sell-fossil-fuel-stocks/ Fri, 02 December 2016 00:12:27 http://everythingshale.com/news/2016/december/01/pipelines-fueling-pennsylvania-and-beyond/ The Keep It In the Ground movement and other fringe activists are using the North Dakota Access Pipeline (#NoDAPL) movement as a basis for fighting everything from pipeline development to leasing in national forests here in the Marcellus and Utica Shales. The Sierra Club even issued a false press release earlier this week claiming the PennEast pipeline was being re-routed through environmentally sensitive areas — even though the company has no such plans at all. With so much misinformation circulating, it is more important than ever for the public to have accurate information not only on fracking, but the infrastructure necessary to move our natural resources. That includes pipelines — which are the safest way to transport oil and gas to consumers across the country. According to the Pipeline & Hazardous Materials Safety Administration (PHMSA), a division of the U.S. Department of Transportation, “The nation’s pipelines are a transportation system. Pipelines enable the safe movement of extraordinary quantities of energy products to industry and consumers, literally fueling our economy and way of life. The arteries of the Nation’s energy infrastructure, as well as one of the safest and least costly ways to transport energy products, our oil and gas pipelines provide the resources needed for national defense, heat and cool our homes, generate power for business and fuel an unparalleled transportation system. The nation’s more than 2.6 million miles of pipelines safely deliver trillions of cubic feet of natural gas and hundreds of billions of ton/miles of liquid petroleum products each year . They are essential: the volumes of energy products they move are well beyond the capacity of other forms of transportation. It would take a constant line of tanker trucks, about 750 per day, loading up and moving out every two minutes, 24 hours a day, seven days a week, to move the volume of even a modest pipeline. The railroad-equivalent of this single pipeline would be a train of 75 2,000-barrel tank rail cars everyday. Pipeline systems are the safest means to move these products. ” (emphasis added) Pipelines are particularly essential in Pennsylvania, where PHMSA data show there are currently more than 87,000 miles of pipelines , including the following types : Gathering Pipelines — which transport natural gas from the well head to larger transmission lines Transmission Pipelines — which are larger capacity lines that allow natural gas to travel across a state or multiple states to storage or distribution systems Distribution Pipelines — which distribute natural gas to end users in homes, businesses and power generation facilities In fact, Pennsylvania’s pipeline network dates all the way back to the 1800s when “Colonel” Edwin Drake drilled the first commercial oil well in 1859 in Titusville. And while a lot has changed since then — as steel has replaced iron, and improved safety measures and better technology have been introduced — one thing that hasn’t is Pennsylvania’s continued investment in this needed infrastructure, which is not only essential to bringing abundant Marcellus gas to markets outside the Commonwealth, but the very areas where the gas is produced. Bringing Distribution Networks and Savings To Rural Communities The development and growth of the Marcellus Shale over the last decade has brought with it a renewed discussion on how to get the gas being produced in rural Pennsylvania to the folks living there. Despite the Commonwealth’s extensive distribution network, the majority of these lines are only available to consumers in cities across the state where there are manufacturing industries and people live in closer proximity. Fortunately, steps are being taken to address this issue. State Senator Gene Yaw began working on passing legislation in 2012 to bring greater access to his district, which includes some of the top Marcellus producing counties in the state, including rural communities in Bradford, Lycoming, Sullivan, Susquehanna and Union counties. From his December 2012 press release : “According to the Center for Rural Pennsylvania, only 51 percent of Pennsylvania homes are heated with natural gas,” Senator Yaw said. “Certainly, the lack of natural gas service is a hardship for citizens in Pennsylvania who are required to purchase more expensive heating sources simply because of a lack of natural gas distribution infrastructure. Expanding that infrastructure is critically important to providing consumers with the best energy value, both now and into the future.” Also in 2012, Leatherstocking Gas Company was granted approval to bring gas to residents in rural Susquehanna County, which previously had no gas utility infrastructure despite being one of the top gas producing counties in the state. Tunkhannock , another rural community in Wyoming County, entered a 10-year plan in 2015 with UGI Utilities to get much-need access to natural gas services. Also last year , the Pennsylvania Public Utility Commission (PUC) approved a five-year plan with UGI called the UGI Growth Extension Tariff , or GET Gas, a program that makes the conversion process more affordable to provide greater access to consumers. And just last month, a $24 million grant was approved called the Pipeline Investment Program (PIPE), that could rapidly shift the availability of gas infrastructure for rural residents, manufacturers and others, and in doing so hasten “the development of low-cost energy and creating new jobs.” From Gov. Wolf’s press release : “Pennsylvania boasts tremendous natural gas resources, and it makes sense that our residents should benefit from the assets right under their feet,” said Governor Wolf. “Doing so will also have a significant impact on the economic well-being of the commonwealth by creating jobs and making low-cost natural gas more readily available.” A major hurdle to overcome in bringing about a utility services to regions where none previously existed is to have enough interest to make the investment worthwhile. Many times, this requires what’s called an “anchor” to be the primary consumer, allowing residents and businesses along the route the ability to also tap into the new supply. And that’s exactly what the PIPE grant addresses by offering ,  “… up to $1 million for pipeline project expenses including construction; acquisition of land, rights of way, and easements; land clearing and preparation; and engineering, design, and inspection costs. Applicants must provide matching funds equal to at least 50 percent of the total project cost.” PIPE grants specifically seek out the following anchors for gas service: Businesses – A corporation, partnership, sole proprietorship, limited liability company, business trust or other CFA-approved commercial entity Economic Development Organizations – A nonprofit corporation or association whose purpose is the enhancement of economic conditions in their community Hospitals – An entity licensed to provide inpatient care and services under either the Public Welfare Code or the Health Care Facilities Act Municipalities – Any city, township, borough, town, county, or home rule municipality School Districts If the grant program is successful, it may soon offer folks like myself who rely on wood, propane or oil an affordable alternative for heat, saving residents millions of dollars and creating jobs in the process . Ramping Up Pennsylvania’s Status As A Net Exporter Expanding pipeline infrastructure not only helps distribute natural gas to the rural Pennsylvania communities that produce it, but is also essential to further enhancing the Commonwealth’s status as a net exporter . Ironically, Pennsylvania’s status as the second largest producer of gas in the U.S. has filled the transmission capacity that exists in the state, impeding distribution at the same time that demand in markets such as New York, New Jersey and New England has continued to increase . Fortunately, according to the U.S. Energy Information Administration (EIA), several key projects came online in 2015 and early 2016 that have already helped to alleviate the growing need for the abundant supply of Marcellus gas in major out-of-state markets: “The Rockies Express Pipline (REX) reversal project had added westbound capacity to flow natural gas to the Midwest in 2014. In late 2015, Texas Eastern Transmission Company’s (Tetco) OPEN project added 550 million cubic feet per day (MMcf/d) of pipeline takeaway capacity out of Ohio.” “Columbia Gas Pipeline’s East Side Expansion , a 310 MMcf/d project that flows natural gas produced in Pennsylvania to Mid-Atlantic markets.” “Tennessee Gas Pipeline’s Broad Run Flexibility Project , a 590 MMcf/d project originating in West Virginia that moves natural gas to the Gulf Coast states.” “Tetco’s Uniontown-to-Gas City project flows up to 425 MMcf/d of natural gas produced in the Marcellus region to Indiana.” “Williams Transcontinental Pipeline’s Leidy Southeast project provides additional capacity to take Marcellus natural gas to Transco’s mainline, which extends from Texas to New York. From there, the natural gas serves Mid-Atlantic market areas as well as the Gulf Coast.” Several transmission projects are also in various stages of the approval process with the Federal Energy Regulatory Commission (FERC), which regulates these types of pipelines. A 2015 Pittsburgh Post Gazette article reported that Pennsylvania can “expect to see about 17 pipeline projects meant to ship about 17.3 billion cubic feet per day of natural gas out of Pennsylvania, West Virginia and Ohio to end-users.” From the article, “Those destinations are varied, and in addition to New England, some are targeting the Midwest, eastern Canada and the South,” said Matthew Piatek, associate director of North American natural gas for IHS, which tracks energy markets. “ Given the amount of production in the tri-state area currently, it will be able to satisfy the lion’s share of Mid-Atlantic and New England demand and still export a net amount of natural gas ,” Mr. Paitek said. (emphasis added) Some of those projects include: Atlantic Sunrise Constitution PennEast Rover Tennessee Gas Pipeline Expansion Projects: Orion and Triad In addition to increasing pipeline capacity, these projects provide huge impacts for Pennsylvania’s economy. Just to give a snapshot: Atlantic Sunrise will travel across 10 counties in Pennsylvania and result in : A $1.6 billion increase in economic activity across the 10 counties An estimated 2,300 direct construction jobs for Pennsylvanians An additional 6,000 full-time equivalent (FTE) jobs through support services $245 million in income generated from new labor Around $50 million in new state and federal tax revenue $859 million in total value-added impact to Pennsylvania 29 new and permanent full-time equivalent positions $1.9 million once operational More than $1 billion in total in economic activity PennEast will provide : $890 million in construction costs $733 million in construction labor $520 million direct to Pennsylvania $210 million direct to New Jersey 12,160 total jobs $740 million in worker wagers $1.6 billion total economic impact In addition to that, it’s estimated that had the PennEast pipeline been operational last winter, it would have saved consumers in Pennsylvania and New Jersey $893 million. Conclusion Pennsylvania has an opportunity to be a tremendous supplier of natural gas, not only within its own borders, but to millions of people across the country. As pipeline capacity increases, distribution of gas developed in the Marcellus will result in more affordable, reliable energy, as well as lower emissions in areas where natural gas is utilized for heating and electricity generation. But that will only happen if infrastructure gets built and groups that partake in the Keep-It-In-the-Ground mentality are unsuccessful in holding Americans hostage to higher energy costs because they do not have access to this resource. http://everythingshale.com/news/2016/december/01/pipelines-fueling-pennsylvania-and-beyond/ http://everythingshale.com/news/2016/december/01/pipelines-fueling-pennsylvania-and-beyond/ Thu, 01 December 2016 22:27:11 http://everythingshale.com/news/2016/december/01/california-offshore-development-benefits-the-economy-our-security-and-the-environment/ When it comes to energy production, it is important to produce locally and think globally. In this spirit, the Obama Administration’s plan to ban offshore energy development in California’s federal waters through 2022 is a mistake for three important reasons. First, it would result in less home-grown energy when we need more of it. Second, it would reverse progress toward making the United States energy independent, thereby increasing our national security. Third, it would stall progress in mitigating the impacts of global climate change. It is a simple fact that, in the near term, we need more oil and gas, not less. The Energy Information Administration recently predicted that U.S. demand will continue to grow, and the International Energy Agency also forecasted that global oil consumption grow, for the next 24 years. California is the world’s sixth largest economy – larger than France or Brazil — and the most populous state and we require an enormous amount of energy from all sources to power our universities, our industries, our schools, our homes and our planes and cars (yes, even the electric ones). The good news is that we are a major energy producer. California is the third largest oil producing state, with the industry responsible for nearly half a million jobs and contributing to vital public services with $20 billion in annual state and local tax revenues. The bad news is that we produce only 37 percent of the energy we consume. The oil and gas we don’t produce here is imported by tanker or train, from countries — like Iraq, Angola and Russia – with laxer environmental protections. Critically, these countries are often not always aligned with the interests of the United States. So importing oil increases both our global carbon footprint and makes us less geopolitically secure. The benefits of increased offshore production could be significant. Developing even some of our resources would make a huge dent in our imports and the math suggests that if we developed all of our offshore oil and gas, we would produce enough to provide for ourselves without imports for 30 years. In addition, a study by ICF International estimates that, by 2030, such development could create more than 14,000 new jobs, $3 billion in economic activity and $12 billion in government revenues. And what about safety? First, California’s energy producers operate in the strictest regulatory environment in the country. In the past 40 years California has produced more than a billion barrels of oil in federal waters and about 870 barrels have been spilled. For perspective, approximately 70,000 barrels of oil seep naturally off the coast of Santa Barbara each year.  More oil per week seeps naturally into the ocean than has been spilled during oil production in four decades. As well, offshore production has led to a reduction of seepage as it decreases subsea reservoir pressure. As for fracking, a frequent target of anti-industry activists, a recent federal analysis of well-stimulation treatments on the 23 oil and gas platforms on the Outer Continental Shelf off California’s shore found “no significant impact” on the environment. Happily, energy independence and emission reductions are correlated: as we produce more energy in California, we reduce our carbon footprint because we aren’t importing, which makes us less dependent on foreign oil. This is a welcome complement to the shale revolution, and the fracking that has made it possible, elsewhere in the country which has allowed the U.S. to emerged as a leader in both producing energy and in slashing greenhouse gas emissions. It is a shame that the Obama Administration – which in the past has supported increased production of domestic energy resources while touting its economic, geopolitical and environmental benefits – would now seek to thwart these benefits. Californians treasure our beautiful beaches and scenic coastline, as well as our bipartisan tradition of putting a premium on environmental stewardship, and sometimes the best solutions are counter-intuitive. http://everythingshale.com/news/2016/december/01/california-offshore-development-benefits-the-economy-our-security-and-the-environment/ http://everythingshale.com/news/2016/december/01/california-offshore-development-benefits-the-economy-our-security-and-the-environment/ Thu, 01 December 2016 21:09:04 http://everythingshale.com/news/2016/december/01/calpine-closes-900-million-noble-americas-acquisition/ The companies first announced acquisition plans in October. Calpine expects a net cost of $900 million. The company covered the cost with cash on hand and a $550 million, one-year loan, according to a company statement. RELATED:   Calpine buys Noble Americas Energy for nearly $1 billion Noble had retail power customers in 18 states across the West, Mid-Atlantic and Northeast U.S. Noble president Jim Woods will remain and report to Calpine’s executive vice president and chief commercial officer Trey Griggs. “Noble Solutions has built an impressive retail platform serving sophisticated commercial and industrial customers, and we are excited to welcome their talented professionals into the Calpine family,” Griggs said in a statement. Houston-based Calpine provides natural gas- and geothermal-generated electricity to customers in 24 states through a network of 82 power plants, some of which are under construction. http://everythingshale.com/news/2016/december/01/calpine-closes-900-million-noble-americas-acquisition/ http://everythingshale.com/news/2016/december/01/calpine-closes-900-million-noble-americas-acquisition/ Thu, 01 December 2016 19:44:06 http://everythingshale.com/news/2016/december/01/as-mexico-welcomes-oil-giants-its-colossus-slowly-erodes/ The reign of Petroleos Mexicanos, the government-owned oil producer known as Pemex, is slowly being dismantled after a 2013 overhaul ended its monopoly and opened up the industry to foreign rivals for the first time in more than seven decades. A Dec. 5 auction in which oil majors including Exxon Mobil, Chevron and BP may bid on deepwater blocks marks the most significant step yet in Mexico's effort to reclaim its spot as a global crude-producing powerhouse. Mexico needs the auction to be a hit. Out of the gate, the industry overhaul suffered a major blow when the country's oil prices collapsed from above $100 a barrel in 2014 to as low as $19 a barrel in January. The drop stymied participation in the nation's debut auctions last year, while accelerating the decline of Pemex, once the world's third-largest producer. All of that raises the stakes for next week's sale. What we're seeing right now is the ongoing impact of years of neglect of the national oil company,†Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington, said in a phone interview. Without the energy reform, Pemex was on a road to bankruptcy. The country is now trying to right the sinking ship, but it still might be as many as 10 years before the entrance of significant investment can help do that.†Today, Pemex's output is falling faster than foreign producers will be able to ramp up production, even if the auction on Monday is a success. Its production is on course to fall to a 36-year low as the Mexico City-based company is hogtied by nearly $100 billion in debt and 16 straight quarterly losses that have decimated investment spending. The fall in Pemex's oil production can be attributed to the maturation and decline of the Cantarell field, Pemex said in an e-mailed statement. Cantarell was one of the world's largest oil discoveries when found in the Gulf of Mexico in the 1970s. Reform promises The most ambitious of the promises included in the oil industry reforms are already at risk. When the law was signed in December 2013, President Enrique Pena Nieto vowed it'd lead to thousands of jobs, increased output and a stronger, more efficient Pemex. Instead, Pemex has reduced its staff by almost 30,000, and local service companies that counted the oil monopoly as its only client were forced to freeze activities or shut down because of delayed payments and cut contracts. One of the energy overhaul's key milestones — hitting national production of 3 million daily barrels by 2018 — is likely to fall short by more than a third. Once a bigger supplier to the U.S. than Saudi Arabia, Pemex's output may dwindle to about 1.6 million barrels a day by 2020, less than half its 2004 peak, because it lacks the technology and funds to revamp aging fields, Morgan Stanley analysts said in July. Without sufficient liquidity and investment, Pemex will continue to shrink, they said. Pemex's priority in the upcoming years is to be profitable, which will require slowing the accumulation of debt and improving midstream and downstream operations, Pemex said in an e-mail. The company said it aims to increase profitability without further job cuts. ‘Crown jewels' Government officials are also hoping Monday will signal the start of the turnaround for Pemex, as well as the oil industry. The blocks up for grabs are by far the sexiest of the nation's potential crude reserves, often referred to as the country's crown jewels†by Energy Minister Pedro Joaquin Coldwell. More than three-fourths of prospective oil resources are located offshore in deep waters, according to the energy ministry. We've attracted some of the largest companies in the world that have the technology and investment capacities to develop deep water resources,†Hector Moreira, a commissioner for the Mexican oil regulator and a former Pemex board member, said Nov. 28 in a meeting to announce the companies that would participate in the Dec. 5 auction. This is a result of the energy reform.†Also up for sale is a joint-venture stake with Pemex. The deal would create the company's first-ever partner in deep waters at the Trion light-crude field in the Gulf of Mexico just south of the maritime border with the U.S. Pemex forecasts that $11 billion in investment will be needed to develop Trion, which the company says holds as many as 485 million barrels of oil equivalent. Pemex expects to see investments from the partnership in the Trion field as soon as 2017, Jose Antonio Gonzalez Anaya, the company's chief executive officer, said today in an interview with Bloomberg Television. The field is expected to record crude production as soon as 2022, he said. The only way to make Pemex wake up and push it to the next level is through competition,†said Juan Francisco Torres-Landa, managing partner of Hogan Lovells' Mexico City office. It is going to have to be a much more efficient company or it won't be able to compete.†http://everythingshale.com/news/2016/december/01/as-mexico-welcomes-oil-giants-its-colossus-slowly-erodes/ http://everythingshale.com/news/2016/december/01/as-mexico-welcomes-oil-giants-its-colossus-slowly-erodes/ Thu, 01 December 2016 19:00:59 http://everythingshale.com/news/2016/december/01/market-currents-more-twists-left-in-the-opec-tale/ 1) The oil glut of recent times may have been initiated by U.S. shale, but its momentum has been carried on by Saudi, Iraq and Iran. As the chart below illustrates , Saudi has flooded the market since early last year, in an attempt to flush out higher-cost production. Iraq has similarly ramped up exports, but due to opportunity as opposed to strategy, while Iran’s return to the global market this year after the lifting of sanctions has added an extra layer of oversupply. After OPEC’s landmark decision yesterday, the hard work begins for the cartel. Saudi’s heavy lifting of nearly 500,000 bpd doesn’t seem that back-breaking, given it seasonally reins in production by this much anyway after a mid-summer peak (a drop we didn’t see this year…hmmm). As for Iran, oil minister Bijan Zanganeh seemed as happy as Larry after yesterday’s meeting, and so he should be, given Iran is still allowed to increase production, while most others cut. The willingness of Saudi to get this deal done is starkly illustrated by it granting its arch-rival such a concession. As for who feels most gipped from this meeting, it has to be Iraq, given it has rolled over and agreed to cut by 200,000 bpd. There’s plenty more twists left in this tale, I assure you. 2) The graphic below is a nifty aggregated view of OPEC production. Not only does it affirm what we mentioned above re Saudi, Iraq and Iran being key players, but it also highlights how these three have been the nations to see the biggest pop in output in recent years. Meanwhile, there is Gabon at the opposite end of the spectrum. 3) The epic graphic below  underscores why OPEC has finally been corralled into a cut; production costs of U.S. shale have roughly halved in recent years, indicating that we’ll see increasingly higher production going forward if prices remain supported. In the Bakken, the first U.S. shale play to see production over 1mn bpd, there are around 2,000 square miles in Dunn County where production costs have dropped to $15/bbl . About a fifth of North Dakota’s production – some 200,000 bpd – come from this county. All five shale plays in the graphic below show average wellhead breakevens below $40/bbl . 4) Yesterday morning I was interviewed on NPR Texas to give an immediate response to the OPEC decision, and what it means for Texas. While the total US oil rig count has increased by 50 percent from its lows in May, the Permian rig count has accounted for much of this increase, rising by 72 percent. After bottoming out in late April, two months after oil prices reached their lows, the Permian basin now accounts for 228 rigs, nearly half of the U.S. total of 474. As the chart below highlights , as prices grind higher, the rig count is only going to go one way….up. 5) Yesterday’s weekly inventory report somewhat faded into the background amid the OPEC circus. The key takeaway was that inventories yielded a modest surprise draw, led by a big drop in crude inventories on the East coast amid lower imports – even though refinery runs also dropped off. Total refinery runs showed a counter-seasonal drop (hark, below), but subdued crude imports meant we still saw a draw to inventories. The overall report was fairly neutral given solid builds to gasoline and distillates; mildly bullish crude, modestly bearish for the products. http://everythingshale.com/news/2016/december/01/market-currents-more-twists-left-in-the-opec-tale/ http://everythingshale.com/news/2016/december/01/market-currents-more-twists-left-in-the-opec-tale/ Thu, 01 December 2016 18:27:45 http://everythingshale.com/news/2016/december/01/new-legislative-committee-highlights-major-benefits-of-shale-development-to-colorado-s-economy/ The benefits of shale development will to be a hot topic when the Colorado state legislative session convenes in January, as legislative leaders have just announced that they’ve have formed a new committee solely focused on “energy and environmental issues facing Colorado.” As a press release announcing the committee points out, the move comes in anticipation of expected policy changes in due to the results of the election. State-Sen. Ray Scott said : “Colorado’s already well known for our passionate interest in all issues related to energy and the environment, so this seems like a logical response to the growing demand we see for more study, deeper discussion and innovative policy ideas,” said Scott. “The changes in attitude and approach we’re expecting from the Trump administration will only add to the importance and relevance of the work this select committee will do.” Another member of the committee, state-Sen. John Cooke, who represents Colorado’s top energy producing county, touted the importance of energy development to the state’s economy as an example of why legislative leaders saw the need for a new committee to examine energy issues in greater detail: “Energy is one of the two or three top economic engines driving Colorado’s economy, so we must find a way to support those jobs and revenues while also protecting the natural places that make Colorado special,” added Senator Cooke. The state’s leading Democrats and Republicans have long-recognized the importance of energy development. Colorado’s Democrat governor, John Hickenlooper has been a stalwart supporter of oil and natural gas development, and a leader against ballot initiatives aimed at driving fracking out of the state. And Colorado’s bipartisan support for fracking also extends to the state’s US Senators where Democrat , Michael Bennet and Republican , Cory Gardner have both touted the importance of energy development to the state. Shale development has delivered millions of dollars in revenue to fund Colorado schools; has boosted important safety and infrastructure improvements; and provided an important funding stream for many other critical economic development projects across the state, even during a time of low commodity prices. For example, a round of grants disbursed by The Mesa County Federal Mineral Leasing District – totaling nearly $300,000 – were awarded earlier this year to fund street repairs and enhancements, utility improvements, equipment upgrades for a rural fire department, and an initiative to improve school safety in a Mesa County school district. As KJCT 8 reports : “The Mesa County Federal Mineral Lease District is giving $100,000 to District 51 schools to upgrade the classroom door lock system — making school more secure.” The report goes on: “It’s really exciting to be able to get the funding to put better locks on our class room doors, so teachers are able to lock down their classrooms and keep their students safe a lot faster,” said Crystal Stephenson, Principal of Nisley Elementary. And along with mineral leasing revenues, shale development has been found to significantly benefit surrounding communities in many other ways. Researchers at Duke University found that shale development has been boosting public revenue for local governments across the country. An example of their findings can be seen in a case study on Colorado’s Piceance Basin , released alongside the report that shows dramatic increases in economic activity and public revenue in shale regions. From the case study : “Tax revenues grew very quickly from 2002 to 2008, the peak of regional natural gas development, rising from $2.6 million to $12.4 million, led by sales taxes. A variety of capital grants, including DOLA grants from severance tax and federal mineral lease revenues, added an additional $11.6 million in 2008 (Rifle Department of Finance 2002-2013). Overall revenues grew from roughly $10 million in 2002 to a peak of $34 million in 2008.” (Emphasis added) And along with the increased tax base, it is also clear from the case study that town officials see oil and natural gas development as having a lasting impact. Also from the case study : “Overall, the city manager describes the surge in natural gas development in the mid-2000s as a net benefit for Rifle’s fiscal health, as new businesses and buildings have boosted the city’s tax base far above the levels of the early 2000s.” Colorado shale development continues to be an important revenue stream for rural communities across Colorado. So while “Keep-It-In-The-Ground” activists fly in from other states attempting   to block federal mineral lease auctions and  stage protests and publicity stunts , it is clear that Colorado’s legislative leaders are seeking to advance policies that benefit all Coloradans. http://everythingshale.com/news/2016/december/01/new-legislative-committee-highlights-major-benefits-of-shale-development-to-colorado-s-economy/ http://everythingshale.com/news/2016/december/01/new-legislative-committee-highlights-major-benefits-of-shale-development-to-colorado-s-economy/ Thu, 01 December 2016 18:22:10 http://everythingshale.com/news/2016/december/01/larger-than-average-withdrawal-pushes-gas-prices-up/ U.S. natural gas storage inventories decreased by 50 Bcf during the week ending Nov. 25, per EIA. The 50 Bcf draw was relatively in line with market expectations of a draw in the low 50s and full range of forecasts expecting a draw between 26 and 65 Bcf. The withdrawal compares to a 35 Bcf reported last year. The report is bullish as prices are up 11 cents this morning with about 3 cents of the gains happening after the storage report. Prompt month (Jan2017) is trading at $3.47 per MMBtu, at time of writing. Storage inventories dropped below the 4 Tcf mark and stand at 3.995 Tcf, level only 0.6% above 2015 which is also the prior 5-year high, and 6.3% above the 5-Year average. There is a bullish sentiment in the market that started about 3 weeks and that have been more pronounces since last week. The Jan17 contract is up 28% or 75 cents since the lows seen on Nov 9th. Winter weather is finally materializing and although there will be a bearish storage report next week (smaller-than-average draw), the following two weeks will see significant higher draws than historical and will push inventories below last year and 5-year highs. Drillinginfo continues to project price gains over the current forward curve with prices reaching levels north of $4.00+/MMBtu during winter months in 2017. http://everythingshale.com/news/2016/december/01/larger-than-average-withdrawal-pushes-gas-prices-up/ http://everythingshale.com/news/2016/december/01/larger-than-average-withdrawal-pushes-gas-prices-up/ Thu, 01 December 2016 16:26:05 http://everythingshale.com/news/2016/december/01/bp-sanctions-9-billion-deep-water-gulf-project/ The green light for the second phase of BP's Mad Dog field comes three years after the company delayed plans to assemble a massive $20 billion oil-production spar in the region. The British firm redesigned the project and cut costs by more than half during a two-year oil bust that forced companies to shelve multibillion-dollar offshore projects. OPEC signaled it’s trying to bring the oil-price slump to an end on Wednesday with its first oil-production cut in eight years. A computer model of BP’s deep-water Mad Dog field in the Gulf of Mexico. Courtesy of BP. Big deep-water projects can still be economic in a low price environment in the U.S. if they are designed in a smart and cost-effective way,†said Bob Dudley, BP's chief executive, in a written statement. BP said it could drill up to 14 wells and believes the deep-water platform would be able to pump as many as 140,000 barrels of oil a day, starting in 2021. The company estimates the Mad Dog field holds 4 billion barrels of oil. Its partners Chevron and Australian company BHP Billiton, which together own nearly 40 percent of the Mad Dog project, are expected to make a final decision on the investment in the first quarter. http://everythingshale.com/news/2016/december/01/bp-sanctions-9-billion-deep-water-gulf-project/ http://everythingshale.com/news/2016/december/01/bp-sanctions-9-billion-deep-water-gulf-project/ Thu, 01 December 2016 15:49:43 http://everythingshale.com/news/2016/december/01/tudor-pickering-holt-co-completes-merger-with-new-york-firm/ The 175-person Houston boutique firm keeps the Tudor, Pickering name and now operates as the energy practice for the bigger Perella Weinberg Partners firm, they said. The merged firm has 650 employees across eight offices in New York, Houston, London, Denver, San Francisco, Dubai, Abu Dhabi, and Calgary. Perella Weinberg acquired the majority ownership of Tudor, Pickering, but the two privately held firms declined to disclose the financial terms of the deal. The recent oil bust is creating more consolidation and bankruptcies within the energy sector, and now those mergers are extending into associated investment and banking spaces. Early this year, investment banking firm Piper Jaffray bought Houston-based energy investment bank Simmons & Co. International for $139 million. http://everythingshale.com/news/2016/december/01/tudor-pickering-holt-co-completes-merger-with-new-york-firm/ http://everythingshale.com/news/2016/december/01/tudor-pickering-holt-co-completes-merger-with-new-york-firm/ Thu, 01 December 2016 15:23:25 http://everythingshale.com/news/2016/december/01/epa-says-emissions-too-high-at-four-texas-power-plants/ Sulfur dioxide is a product of burning coal and other fossil fuels used to make electricity.  Short-term exposure to high levels of the gas can be life-threatening, but exposure to lower amounts can cause heart and lung trouble, according to the Sierra Club, a national environmental advocacy group. Luminant, a Dallas-based energy company, owns the four power plants targeted in the EPA’s notice, three east of Dallas and one east of  Austin.  Meranda Cohn, a spokeswoman for Luminant, said that all four of the company’s plants are operating in compliance with state and federal regulations. Luminant thinks that the models the EPA used to determine the emissions levels were inaccurate, Cohn added. Cohn also raised concerns that some of the air quality models used by the EPA were provided by the Sierra Club, according to documents from the EPA. The state of Texas has its own air quality monitors in place that show no violations in emissions, although none of those monitors were in the six counties mentioned in Wednesday’s notice, according to a letter from the state sent to the EPA in September. Instead, Luminant ran its own air quality models for those counties, but the EPA did not take those models into consideration,  Cohn said. “The state of Texas will begin the process to evaluate whether potential control or operational changes, if any, may be necessary to demonstrate attainment and we are considering our legal options,” said Cohn, who added that the state’s objections to the EPA’s determination can be taken to court. The EPA has had its eye on the plants for years as part of an on-going attempt to reduce air pollution in Texas. This week, after a months-long court battle, the EPA decided to withdraw another federal regulation that would have required Luminant and other companies to reduce emissions from the plants by upgrading scrubbers, air pollution control devices. The companies objected to the rule saying that it would have forced them to shut down the coal-fired power plants. Five of the six counties, Titus, Rusk, Panola, Freestone and Anderson, are part of a sulfur dioxide non-attainment zone, where levels of the gas are higher than the EPA recommends.     http://everythingshale.com/news/2016/december/01/epa-says-emissions-too-high-at-four-texas-power-plants/ http://everythingshale.com/news/2016/december/01/epa-says-emissions-too-high-at-four-texas-power-plants/ Thu, 01 December 2016 15:21:05 http://everythingshale.com/news/2016/december/01/iraq-can-t-commit-to-opec-s-oil-output-deal/ Despite pressure from OPEC to cap its oil production, the Iraqi government can neither afford a production cut nor enforce it upon the Kurdistan Regional Government. Under tremendous fiscal pressure, OPEC members may cut a deal in Vienna this week that would cap oil production in order to raise global prices. The deal is being championed by the cartel’s largest producer , Saudi Arabia, but the second largest producer, Iraq, has resisted a cap. Although low oil prices threaten Iraq’s stability, Baghdad cannot afford to cut itself off from potential revenue — its already massive public spending has been aggravated by the ongoing war against the Islamic State (IS) and the looming reconstruction effort. Even if it were willing to risk the lost revenue, it could not implement any such commitment because the country’s energy policy and industry remain divided between the central government and the Kurdistan Regional Government. Accordingly, the KRG should consider how it could benefit from helping Baghdad secure an exemption from OPEC’s output quota. OPEC’S EXPECTATIONS VS. IRAQ’S CHALLENGES One of OPEC’s central missions is to manipulate global oil prices by limiting global oil supplies, which it does by negotiating output quotas for its members. As in any cartel, however, OPEC deals are marred by cheating. Due to wars and sanctions, Iraq has not seriously committed to such a deal since the inception of the quota regime in 1986, and it has been exempt since 1991. It wishes to remain so, similar to Iran, Libya, and Nigeria. But as a much larger producer than those states, Iraq is under renewed pressure to commit to the imminent production ceiling. Facing a financial crunch and shrinking cash reserves due to low oil prices, OPEC members have sought to address the global oil glut in recent months, but Baghdad has been quick to push back. Iraq’s production level reached 4.7 million barrels per day (bpd) in September, according to Oil Minister Jabbar al-Luaibi, and its output could increase further due to maturing investment projects, revamped infrastructure, and successful efforts to eject IS from oilfields such as al-Qayyara and Hamrin. Yet while Luaibi is adamantly opposed to a cut, he signaled that Iraq may be amenable to a production freeze at September levels. This view is likely rooted in the steep global price drop of late 2014, which crippled Iraq’s economy. Oil sales account for 60% of the country’s GDP and 90% of government revenues. Hence, the government dominates the economy and the labor market, resulting in an inefficient and bloated public sector. For example, IMF data indicates that Baghdad spent more than 11% of its 2011 GDP on electricity subsidies, the second highest rate in the Middle East. And the Iraqi and Kurdish governments employ an estimated 40% and 50% of the labor force, respectively — a huge political patronage machine lubricated by previously record-high oil prices. Today, however, the KRG is months behind on paying salaries, and its ratio of public spending to GDP is over 50%. These problems are compounded by the campaign against IS, which along with the Syria war has resulted in a mass wave of refugees and internally displaced persons. Of Iraq’s total 5.5 million IDPs and refugees, the KRG hosts 1.8 million, or about 28% of its total population. This takes a toll on the local economy and public services, since many of the new arrivals live in urban areas instead of refugee camps. The KRG has also accumulated debilitating debts — estimated at $20 billion — to a mass of creditors, including international oil companies (IOCs). This year, for example, only 67% of oil revenue flowed into KRG coffers on average; the rest had to be used for repaying IOCs and oil traders. Against such financial needs, the KRG cannot afford to limit its oil production and sales, despite sharing Iraq’s OPEC quota. In fact, the KRG plans to increase its oil exports in 2017, even as Baghdad considers a production freeze. A FRACTURED ENERGY POLICY When Iraq last agreed to an OPEC quota, its energy policy was nationalized and centrally managed from Baghdad. Today, IOCs dominate the country’s energy sector, and management is divided between federal officials in Baghdad and KRG officials in Erbil. Production cuts would be costly to both governments given their contractual obligations to IOCs, who produce 100% and 80% of KRG and Iraqi oil, respectively. Such cuts would put IOCs at a disadvantage since their payments in Baghdad’s service contracts and the KRG’s production sharing contracts are directly associated with oil output. Yet OPEC still regards Iraq as a unitary country and counts KRG output toward Baghdad’s quota, even though the Kurds maintain their energy industry and policy independently. At present, the KRG contains several significant oil fields and controls the northern pipelines to Turkey’s Ceyhan port, from which it has exported about half a million bpd this year. The fields in question were developed through a string of KRG contracts with IOCs. Moreover, around 245,000 bpd is pumped from the Avaneh and Bai Hassan fields in Kirkuk, which came under KRG control in June 2014 when IS began its large-scale offensives in northern Iraq. The 4.7 million bpd figure touted by the Iraqi Oil Ministry in September may therefore be artificially inflated by as much as 190,000 barrels — apparently, Baghdad double-counted Kirkuk’s production, once as part of KRG output and again under the portfolio of the North Oil Company, the federal ministry branch that managed Kirkuk’s fields before the IS assault. Such discrepancies weaken Baghdad’s position vis-a-vis its fellow OPEC members, who estimated Iraq’s output at 4.159 million bpd in January. Given their persistent institutional disagreements and the ongoing war with IS, Baghdad and the KRG have resorted to dealmaking in order to alleviate disputes over management of the country’s petroleum resources. Yet these deals are inherently unstable due to changes in government, economic dynamics, or the national balance of power. Prime Minister Haider al-Abadi has been more conciliatory than his predecessor, Nouri al-Maliki, who cut the KRG’s share of the federal budget in 2014 when the Kurds refused to turn their oil exports over to the central government. After the IS incursion, the KRG pipeline to Turkey became the sole export route for Kirkuk’s oil, which Iraq sells via Ceyhan. Still, given the political risk conjured by Baghdad’s looming claim on Kurdish oil, the KRG has had to sell its exports at a discount of around $10 per barrel — a significant loss of revenue. OPPORTUNITIES FOR COOPERATION If Baghdad is to commit to an OPEC production freeze, it will need to reach a new, mutually beneficial agreement (however episodic) with the KRG. The time is right — there is increasing goodwill between the two parties, as manifested by military cooperation in Mosul and visits by Abadi and KRG president Masoud Barzani to their respective capitals. The KRG already cooperates with Baghdad on technical matters, such as handing half of Kirkuk’s oil output to Iraqi authorities at Ceyhan. Because Iraq can neither afford a production cut nor enforce it upon the KRG, Erbil and Baghdad have a common interest in an OPEC deal that exempts Iraq from a quota and yet raises oil prices. Instead of embarrassing federal authorities, the KRG should bolster Baghdad’s position at OPEC toward either an exemption or a freeze at a projected quota. Doing so would not dilute the KRG’s hard-won political autonomy. In turn, the central government could ease the legal restrictions on Kurdish oil sales that have resulted in the aforementioned risk discount. Likewise, Baghdad and the KRG’s IOC partners have a strong interest in the stability and predictability of Iraq’s large energy sector, which they can facilitate in part by encouraging each side to adopt a unified stance at OPEC. Finally, OPEC pressure provides an opportunity to increase the transparency of Iraq’s oil output and sales. Both Baghdad and the KRG have voiced commitments toward this end. The Kurds recently contracted with the firms Deloitte and Ernst & Young to audit their oil and gas value chain, and greater transparency would bring both sides closer to comprehensive data sharing. Baghdad should also include a KRG official in its delegations to OPEC, similar to how it approached the annual IMF meeting in October. Maintaining open channels for cooperation and dealmaking would help defuse conflicts that threaten to further disrupt their energy industries and economies. Bilal Wahab is a Soref Fellow at The Washington Institute. Originally Posted on November 29, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission.†Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/december/01/iraq-can-t-commit-to-opec-s-oil-output-deal/ http://everythingshale.com/news/2016/december/01/iraq-can-t-commit-to-opec-s-oil-output-deal/ Thu, 01 December 2016 15:00:15 http://everythingshale.com/news/2016/december/01/at-cap-event-former-dem-ag-admits-exxonknew-crusade-politically-motivated/ In the wake of a federal judge issuing a discovery order to determine if Massachusetts Attorney General Maura Healey and New York Attorney General Eric Schneiderman acted with “bias or prejudgment” in issuing a subpoena to ExxonMobil, one former Democratic Attorney General has openly admitted this is indeed the case. At an event held at the Center for American Progress (CAP) this week, keynote speaker Douglas Gansler, the former Attorney General of Maryland, must not have gotten the memo that the #ExxonKnew campaign has been denying they are motivated by politics, because he openly admitted the entire affair is “politically motivated.” Not only that, but he actually said it’s “good politics”! Here’s exactly how he put it: “The idea that AGs are politically motivated is an old one and a real one. Yes, they’re politically motivated in the sense that they are part of the political process; they have to run for office, they have to do what their constituents ask for, the voters that put them in office ask for, and there is no bigger issue that they ought to be thinking about and working on than climate change . And yes, that’s politically motivated. It’s good politics .” It may not have been such “good politics” for billionaire activist Tom Steyer who is a major funder of CAP and has spent millions of dollars trying to make climate a key issue in the election. Steyer ended up being the “ biggest loser ” in the 2016 election season, with the majority of his candidates suffering major defeats. This revelation by Gansler comes only a few months after a hearing where lawyers representing Healey’s office swore their subpoena was not political. But the federal judge, Ed Kinkeade, wasn’t buying it, saying, “ like Al Gore wasn’t frickin’ involved !” Speaking of politics, Gansler could barely contain his enthusiasm for the Martin Act – the nearly century-old law that New York Attorney General Eric Schneiderman is using to investigate Exxon – noting that the law is so powerful that Schneiderman doesn’t even need to provide proof that Exxon committed fraud before bringing charges against the company. “The wonderful component of using the Martin Act as an enforcement tool, as a litigation tool, is that it is unique in the sense that no proof of intent to deceive or that anyone was actually defrauded needs to exist .” In other words, it’s the perfect tool to initiate a politically motivated crusade, like #ExxonKnew. That’s exactly why prominent legal experts have pushed back against Schneiderman’s use of the Martin Act. As Columbia Law Professor Merritt B. Fox wrote in an op-ed earlier this year, “The Exxon subpoena is an abuse of [the Martin Act’s] extraordinary powers…At the extreme, the Martin Act subpoena power could be used to bully corporations into any kind of desired reform under the guise of a securities investigation.” “Good politics”? Schneiderman has repeatedly refused to turn over documents related to his investigation. The Energy and Environment Legal Institute (E&E Legal) has been forced to sue to obtain them, and a New York Supreme Court judge just ordered that he will need to comply with that request. It’s not surprising that he hasn’t been forthcoming, considering that every time the curtain has been drawn further back, it becomes more and more apparent that politics is the motive here. Instead of maintaining the confidentiality that is expected in a case such as this to avoid bias or prejudgment, Schneiderman went on a media blitz to promote his investigation. Mere hours after Exxon received Schneiderman’s subpoena,  The New York Times  was reporting on it, noting that it focused on “the company’s own long running scientific research” on climate change. Only a week later, Schneiderman appeared on  PBS NewsHour  to proclaim that his investigation of the company centered on his concerns that Exxon had “shifted [its] point of view” on climate change over the years. Less than a month later, Schneiderman attended a  Politico  event in New York where he was openly prejudicial in his rhetoric about his investigation into ExxonMobil. If that’s not enough, Schneiderman and his coalition of AGs tried to make their investigations an even bigger story by announcing their grand, partisan plans at their March 29 th   press conference  with Al Gore. At the event, Schneiderman and Healey made it very clear that they had  already determined  Exxon’s guilt before the investigation ever began. Emails obtained through freedom of information requests reveal that environmental activist lawyer Matt Pawa and Peter Frumhoff of the Union of Concerned Scientists (UCS) briefed the AGs behind closed doors ahead of their March 29 th  press conference with Al Gore. But, when Pawa wrote to the New York Attorney General’s office to inform them he’d been asked by a  Wall Street Journal  reporter about his involvement, Lem Srolovic of Schneiderman’s office  told him ,  “My ask is if you speak to the reporter, to not confirm that you attended or otherwise discuss the event.” As part of their effort to keep their correspondence secret, the AGs also  signed on  to a Common Interest Agreement, and the document shows that the agreement was not related to a legitimate law-enforcement objective – instead it was focused on “limit[ing] climate change” and “ensuring the dissemination of accurate information about climate change.” It’s been abundantly clear from the start that the motivation is political and that the AGs were acting in “ bad faith .” Former AG Gansler’s admission further confirms that fact. http://everythingshale.com/news/2016/december/01/at-cap-event-former-dem-ag-admits-exxonknew-crusade-politically-motivated/ http://everythingshale.com/news/2016/december/01/at-cap-event-former-dem-ag-admits-exxonknew-crusade-politically-motivated/ Thu, 01 December 2016 13:53:59 http://everythingshale.com/news/2016/december/01/indians-wait-patiently-as-steel-moves-to-front-of-queue/ To their surprise, delegates and speakers flying into Mumbai last month for Platts Steel Markets Asia conference were witnesses to history in the making. Ten days earlier, on November 8, the Modi government had launched a “demonetization” drive, the core of which was the gradual removal of Rupees 500 and Rupees 1,000 notes from circulation. The surprise announcement led to long snaking queues in front of ATMs as Indians waited (mostly patiently) to change their bundles of old notes. Yet the public’s response was generally calm. Photo by Charlotte Rao “Fear turned to acceptance,” quipped a Chinese delegate.  She might have added the word “quickly” as people seemed to recognize and support Modi’s aim of transforming the country’s economy into a cashless one where payments made via credit cards, mobile phones and Paytm (online payments) are the new norm. It was a shock to the system but one the population seemed to embrace with minimal rancor, as our China delegate observed. Other attendees were impressed with the efficiency they witnessed as Mumbai raised its standards of ease of doing business, despite the cash crunch. The economy should be able to move to cashless transactions within a month, forecast Dr. Aruna Sharma, secretary at India’s Ministry of Steel. She expects the demonetization drive to bring about more transparency to India’s steel markets, she told Platts. Exhibiting similar zeal, though not about currency but about consumption, were leading Indian steelmakers Steel Authority of India Limited and JSW Steel whose presenters promised their audience the Indian government’s Make in India campaign will drive up steel demand as manufacturers step up. The campaign aims to raise the percentage of the manufacturing sector in the country’s GDP from the current 17% to 25% by the year 2025. “We see steel demand rising by 5.4% y-o-y this year and by a further 5.7% in 2017,” said SAIL chairman P.K. Singh. Few other countries the size of India will achieve anything like such growth for the foreseeable future, with the notable exception of China. New Delhi maintains that India continues to target crude steel production of around 300 million metric tons/year by 2025, from the current 90 million mt produced in the year to last March. However, the Make in India initiative will help drive steel consumption to a realistic figure of 200 million mt/year by 2025 from the 80 million mt during the year ended March, predicted Jayant Acharya, commercial director JSW Steel. Rising demand from sectors such as automobiles, auto component manufacturing, building construction, roads, railways, oil and gas development and defense manufacturing will further drive steel consumption, Acharya said. The potential for investment in India’s infrastructure alone is estimated to be about $1.7 trillion, he told delegates. Demand for steel products such as hot rolled coils, rebars and structurals is likely to rise due to such public works projects. A residential housing block typically requires 1,000-2,000 mt of steel per block, said Ajit Shenoy, procurement general manager at Mumbai-based Hindustan Construction Company. Similarly, a power transmission project of 400 kvA spanning 200 kms requires about 7,000 mt of steel, he told delegates. New Delhi aims to raise per capita power consumption fourfold to 4,000 MW by 2030. However, it takes about nine months from the launch of a project for this to translate into steel supply business, Shenoy told Platts. Most delegates approached by Platts agreed that growth in Indian steel consumption is likely to be visible only in 2018. The post Indians wait patiently as steel moves to front of queue appeared first on The Barrel Blog . http://everythingshale.com/news/2016/december/01/indians-wait-patiently-as-steel-moves-to-front-of-queue/ http://everythingshale.com/news/2016/december/01/indians-wait-patiently-as-steel-moves-to-front-of-queue/ Thu, 01 December 2016 04:01:51 http://everythingshale.com/news/2016/december/01/in-race-for-house-minority-leadership-fracking-continues-to-impact-elections/ Just a few days ago, the New York Post published an article, “Can this man save the democrats?” which outlines Congressman Tim Ryan’s (D-Ohio) run against U.S. House Minority Leader Nancy Pellosi (D-Calif.) to take over the leadership of the House Democrats and change the party’s trajectory.  Another article called the challenge “Tim Ryan’s Rust Belt Reboot” . While Ryan lost his bid today, his run was – at least in part – a symbolic stand against a Democratic platform that decided last year to remove the term “all of the above” from its energy platform. This last-ditch effort to “save the democrats” might have a lot to do with what’s happening within the unions, where the building trades are hungry for jobs and are staunch supporters of oil and gas development (while taking on other unions they call “bottom-feeding organizations” supporting the “Keep-It-In-The-Ground” campaign). Ryan took a bold stand in support of fracking in 2011, arguing shale gas development is a great way to combat climate change. As he said , “ … There is great opportunity now because the number 1 threat to our world is global warming. Having clean, accessible natural gas can transform our economy and reduce our dependency on foreign oil, which we are doing now. It’s a clean fuel. It’s jobs here in the United States and it reduces our dependency on foreign oil, so we an wind these wars down and get out of Afghanistan and get out of Iraq, and use that money to invest back into the United States.” And he was absolutely right. Since 2011, carbon emissions are the lowest they have been since 1992 —thanks to fracking. As Utica shale development started, Congressman Ryan penned a guest blog for EID entitled “ Energy + Manufacturing = JOBS . At a speaking engagement last year, Ryan also explained how the oil and natural gas industry is starting to bring the region back to life: “Growing up and watching the factories close and watching people lose their jobs, and watching it ripple throughout the community… the whole thing that we have seen in Northeast Ohio for the last 20-30 years, we are still trying to recover from some of that…so when we all started to learn about the shale play, which was not necessarily in our lexicon a few years back, and started to really understand what was happening with Utica and Marcellus Shale…I was so excited about what the possibilities were, because we haven’t seen this in so long… We got a break, we got an opportunity.   We have a competitive advantage . We should be aggressively pursuing global manufacturing to come here. We’ve got the location, we’ve got the workforce, and we got our friends in the building trades who are ready-set-go. We have the culture of manufacturing, we got the location, two-thirds of North America is within 500 miles of this area, and we have the Tier 1, Tier 2, and Tier 3 suppliers all the way down the lines. We have the research and development. We have got the job training… what direction do you want to go?  Things are happening around here.” (emphasis added) As the national media has covered this debate over the past few weeks they have missed the fact that in Youngstown, we are making steel again, and it’s entirely because of fracking. Elected officials from both parties know this to be true and as a result are saying things like “we’re not standing on natural resources, we’re standing on jobs.” The same is true to union households, who played a major factor on Election Day. Policies that would stop fracking and the infrastructure required to move the product to market has a direct impact to their jobs. The union vote was significant, as Fox News reported , “Union households — long a stronghold of Democratic support — went for Clinton by eight points. That’s a 10-point drop from Obama’s total last time, and the lowest union support for a Democrat in the past 20 years.” In Ohio, the story was even more compelling as Fox News reported , “(Trump) He won a majority of union members — 52 percent — a dramatic improvement over the 37 percent Romney took home in 2012.” These realities likely had something to do with Congressman Ryan’s run to challenge the democrat leadership. In a recent interview with The New Republic, Ryan showed that he was doubling down on his stance to re-boot the America’s economy through natural gas development, “Asked for specifics on the economic message he’d like to see, Ryan points back to his own district and other former industrial strongholds. Ohioans have had to get creative about new industries, he says, ticking off the successful business incubators in Youngstown, the new natural gas plants replacing coal-fire energy, and the additive and 3D manufacturing in cities like Cleveland and Dayton. Everywhere there are these burgeoning little fresh new parts of the economy, and as Democrats, we should be the ones throwing gasoline on this stuff,” Ryan said. “You need these public-private partnerships with strategic government intervention with layering capital for start-up businesses.” In a statement today after he lost his bid, he continued to push the party to toward his ideologies, “ … It is clear as we learn more about the outcome of our elections that we’re ignoring crucial voices that deserve to be heard. The people I represent in Northeast Ohio and the tens of millions of workers across our country are proud to be called blue collar. Democrats must adopt a progressive economic message that focuses on large, direct infrastructure investments , affordable health care, portable pensions, and public-private investments that promote advanced manufacturing . Hopelessness is a product of economic and social adversity. That is why Democrats must always be the party of aspiration and inclusion.” (emphasis added) Inclusion, up until two months ago, meant the Democrat National Committee had an “all of the above” energy platform. Today, that no longer exists because “Keep-It-In-the-Ground” anti-fracking activists and democratic platform committee member Bill McKibben successfully lobbied the party to reject fossils fuels entirely from their energy platform. McKibben stated in July, “No more all of the above. No more bridge to the future. Sun and wind and are now above natural gas”. McKibben also said on the campaign trail in Ohio that his fringe anti-fossil fuel agenda “was not completely popular” with Democrats.  It’s obvious that his agenda is “not completely popular” with the majority of Ohio voters either. In fact, it’s been flat out rejected. So will the Democrat party move farther toward their “some of the above” energy platform, rejecting union jobs along the way? Time will tell. http://everythingshale.com/news/2016/december/01/in-race-for-house-minority-leadership-fracking-continues-to-impact-elections/ http://everythingshale.com/news/2016/december/01/in-race-for-house-minority-leadership-fracking-continues-to-impact-elections/ Thu, 01 December 2016 00:15:33 http://everythingshale.com/news/2016/november/30/sierra-club-falsely-claims-pipeline-being-re-routed-through-environmentally-sensitive-areas/ Anti-fracking activists have been known to spread misinformation a time or two to distort the discussion on domestic energy production in their favor. That’s a fact demonstrated in films like Gasland or even more recently when Keep-It-In-the-Ground protesters faked getting hit by an SUV at a Bureau of Land Management meeting in Colorado. But those examples don’t even come close to what the New Jersey Sierra Club did this week when it released a press release claiming the PennEast Pipeline Co. submitted an alternative route for its proposed 118-mile natural gas pipeline. The statement looks pretty legit considering the group even created a map of the new pathway for the pipeline, but spoiler alert: the alternative route doesn’t exist. Yes, it would appear N.J. Sierra Club has taken a page right out of PennEnvironment’s playbook that a picture is worth a thousand words. Recall that Pakistani rig the latter group group claimed was under water in Pennsylvania during Hurricane Lee? But we digress. The press release hasn’t been posted on the group’s website yet, but EID obtained a copy of it that can be found here . Here are some of the highlights: “PennEast Now Targeting New Hope and Central Bucks County The day before Thanksgiving PennEast has proposed an alternative route for their proposed pipeline to the FERC Docket.” — “PennEast’s new alternative 20-mile route targets central Bucks County, including areas like New Hope, Washington’s Crossing, Solebury, Newton and more. This would cause much more environmental devastation and destruction along the way. The longer route means more wetlands and streams will be disrupted and polluted by drilling. Places like Delaware Township and Holland Twp. will see more HDD since PennEast can now use permit-by-rule instead of individual permits. The addition of two more River crossings creates twice as much chance for pollution and degradation to the Delaware,” said Jeff Tittel, Director of the New Jersey Sierra Club. “ This route will mean more people put in harm’s way and more waterways being threatened. We’re going to need more people from the Pennsylvania side to join us in our fight against this pipeline. If we want to stop PennEast we have to stand together .” (emphasis added) And while the actual press release has not yet been added to the group’s website , Tittel’s statements from it have appeared in The Express-Times this week : “FERC reopened the docket on their DEIS recently because of the games they were playing by rerouting the project after public comment was closed,” the club’s executive director, Jeff Tittel, said in a news release. “They made these changes after the close of public comment without the ability for anyone to review or comment on these changes. … The FERC DEIS is fatally flawed and they cannot meet the regulatory requirements for water quality permits. The pipeline will destroy the Delaware Valley and change the landscape forever.” Tittel certainly makes his appeal sound dire, but fortunately for him none of his worries are founded. From the PennEast response to these claims: “ PennEast has not submitted route alternatives since the end of September , when it announced 33 route modifications largely in response to input from landowners, agencies and others. This is the latest example of the New Jersey Sierra Club and its director, Jeff Tittel, spreading misinformation, deceiving communities and making inflammatory statements about the Projec t,” said Pat Kornick, PennEast spokesperson. “The irresponsible release might bode well for Sierra Club fundraising, though such questionable credibility hinders honest, factual dialogue about the Project.” (emphasis added) Kornick goes on to offer some pretty logical explanations for why such claims from Tittel are so far-fetched: “It is clear that PennEast has NOT recommended submitting the route to which Jeff Tittel refers, and while disconcerting, it is not surprising that he would mischaracterize it this way,” said Kornick. “ When other mitigation measures are available, it is ludicrous to suggest that PennEast would propose adding 20 miles to the length of the Project and to cross the Delaware River not once, but twice . He either was sloppy in his reading of PennEast’s response or he intentionally misrepresented it. Either scenario demonstrates that neither he nor the New Jersey Sierra Club can be trusted as a credible source, particularly regarding the PennEast Pipeline.” (emphasis added) But that logic wouldn’t matter to the Sierra Club. Nor does it matter to the Sierra Club that the Federal Energy Regulatory Commission (FERC) released an Environmental Impact analysis finding that any potential impacts would be “less than significant.” Or that the project is “expected to generate more than $1.6 billion in short-term economic impact, followed by hundreds of millions in annual savings to electric and natural gas customers.” After all, as Tittel said in the press release and to The Intelligencer : “He stressed that the Sierra Club opposes any route for the pipeline . ‘PennEast keeps coming up with more options for this dangerous and unneeded pipeline but the only option should be no-build .’” In reality, this opposition at all costs — and no matter the solutions offered — is part of a larger movement highlighted just this week when Lena Moffitt, director of the Sierra Club’s Dirty Fuels campaign, explained in a Bloomberg article: “We’re in this critical window where renewables are going to be cost competitive in a few years,” said Moffitt, who is based in Oakland, California. “ If we can forestall gas infrastructure being put in the ground and locking in that demand for the next 60 years — if we can forestall that by maybe just five years — the hope is that renewables will come in and be cost competitive in all markets .” In the meantime, states like New Jersey and those further north in New England are fighting increasing costs each winter due to fuel shortages — all because a few fringe activists have the hopes that maybe renewables will be ready if they just hold the rest of the country hostage a few more years. http://everythingshale.com/news/2016/november/30/sierra-club-falsely-claims-pipeline-being-re-routed-through-environmentally-sensitive-areas/ http://everythingshale.com/news/2016/november/30/sierra-club-falsely-claims-pipeline-being-re-routed-through-environmentally-sensitive-areas/ Wed, 30 November 2016 23:05:42 http://everythingshale.com/news/2016/november/30/article-funded-by-anti-fracking-foundations-silliest-attempt-yet-to-manufacture-controversy-over-epa-groundwater-study/ This morning, Marketplace and American Public Media (APM) published what was meant to be a hit piece entitled, “ EPA’s late changes to fracking study downplay risk of drinking water pollution ,” but in reality, the article has the distinction of being the most ridiculous attempt yet to manufacture controversy over the Environmental Protection Agency’s (EPA) draft groundwater report. Before we get into why, it’s worth pointing out that APM has received tens of thousands of dollars from the anti-fracking Park Foundation and APM and Marketplace were awarded millions in grants by the anti-fracking Tides Foundation, specifically to create a program on “global sustainability and the economy.” From that press release : The grant will primarily support the creation of a new desk for American Public Media’s  Marketplace business programs, including  Marketplace ™ ,  Marketplace Morning Report ™ , and  Marketplace Money ™ , a personal finance program. Neither Marketplace nor APM disclose where their  funding comes from for this article. The article tries to argue that EPA made “critical changes” to its Executive Summary by including a “late” addition of the phrase, no “widespread, systemic impacts” to groundwater resources. The authors show that exact phrase does not appear in the draft Executive Summary that was circulated on April 24, 2015. APM/Marketplace would like readers to think there’s something fishy there, except for the minor fact that the April 24, 2015 draft Executive Summary clearly states: “Despite these risks, the number of documented impacts is quite low.” So how is that any different from saying the impacts aren’t widespread or systemic? Not only that, but the phrase “Agency identified small number of documented impacts relative to number of fracked wells” appears prominently in the subtitle of the draft press release written before June 3 as the below image shows. In the final press release, the subtitle clearly states that the report “identifies important vulnerabilities to drinking water resources.” In other words, none of the meaning was changed at any stage in the process. All the draft Executive Summaries and press releases contain the two primary elements that appeared in the final materials: EPA found some instances where groundwater was affected by oil and gas development, but the data show it was a “small number of documented impacts relative to number of fracked wells.” The data are what the data are, and they abundantly show the impacts were not widespread or systemic. Interviews well-known anti-fracking researchers The APM/Marketplace article goes on to interview a number of anti-fracking researchers, including former EPA scientist Dominic DiGiulio, who was involved in the agency’s famously botched groundwater study in Pavillion, Wyoming. They also interview Robert Jackson, who published studies in  2010  and  2013 claiming fracking could have contaminated groundwater, which have been debunked by the USGS ,  Syracuse University  and other reputable research  organizations . The article claims that “DiGiulio, after leaving his job as an EPA scientist, joined Jackson in a research project at Stanford that found fracking had a ‘clear impact’ on drinking water in Pavillion, Wy.” But what APM/Marketplace does not mention is the fact that EPA’s Pavillion report received wide criticism from state environmental regulators and even other federal agencies – namely the  U.S. Geological Survey  and the  Bureau of Land Management due to pair of water-quality monitoring wells that were drilled by EPA, which were  poorly constructed  and likely introduced the very contaminants that some have tried to blame on fracking. Eventually, under the weight of these criticisms, the EPA backed down. The agency never submitted its draft report, released in late 2011, for peer review and  handed the Pavillion case back to the Wyoming Department of Environmental Quality . Earlier this month, the DEQ released the final report, which finds “Evidence does not indicate that hydraulic fracturing fluids have risen to shallow depths utilized by water-supply wells” and “it is unlikely that hydraulic fracturing has caused any impacts to the water-supply wells.” With his previous work completely debunked, DiGuilio teamed up with Jackson to repackage and re-release that old, debunked data from EPA’s previous Pavillion report. But that attempt fell pretty flat considering it was abundantly clear fracking was not to blame. Actually suggests that EPA is doing industry’s bidding APM/Marketplace also quotes DiGiulio actually suggesting that EPA crafted that topline finding to please oil and gas producers. From the article: “There’s not really a wall between science and politics,” said Dominic DiGiulio, a former EPA scientist. “In my opinion, that statement was put in there to ensure that there would not be blowback from the oil and gas industry.” The suggestion that EPA would be set on doing industry’s bidding is laughable at best. Remember in May of 2012, the  Washington Post  editorial board  said  that the EPA was “earning a reputation for abuse,” primarily due to its attack on the industry and its lackluster handling of fracking issues.  That editorial came shortly after the release of  a video  showing then-EPA Region 6 Administrator, Al Armendariz, explaining that EPA’s philosophy was to “crucify” oil and gas producers – to “hit them as hard as you can” and “make examples of them.” Far from the claims of industry supposedly calling the shots, there is a well-documented history of influence from anti-fossil fuel groups within the EPA. As the  New York Times   reported  in 2014, the NRDC has been working hand in glove with EPA to write some of the most expansive environmental regulations in U.S. history. As E&E News reported in 2013, “ it would be hard to find a group with more connections in state or federal agencies than NRDC .” The EPA has been known to have what the Times Picayune called a “ cozy relationship ” with other activist groups like the Bucket Brigade, which played a starring role in the  dubious scientific case against fracking  in New York.  They also have  come to the aid  of Keystone XL and Pebble mine opponents. In fact, EPA granted anti-fracking activists’ wishes by significantly expanding the scope of its groundwater study to include processes and procedures used in oil and gas development that have nothing to do with fracking at all. As a  meeting summary  from 2010 between EPA and environmental groups shows, anti-fracking groups “expressed concern that the study will not include all aspects of the HF and natural gas extraction process. EPA will use a lifecycle framework to organize the study. While a complete mass balance will most likely be beyond the scope of the study, EPA is currently planning to consider all stages of HF activities, including initial water withdrawals and waste storage and disposal.” Not only that but EPA also used a significantly expanded definition for what constitutes “drinking water” making it “broader than most federal and state regulatory definitions” and including “non-fresh bodies of water.” Yet even with the expanded definition of fracking and drinking water, EPA still found the number of impacts to groundwater was “small.” Conclusion To its credit, APM and Marketplace do mention the economic boon from oil and gas development in shale areas, quoting a Dimock, Pa. homeowner who said, “We’ve had a shot in the arm. It’s probably the best thing that’s happened to this community in 50 years.” Nevertheless, their failure to disclose their anti-fracking foundation funding, as well as their attempt to manufacture a headline suggesting that EPA made a “critical change” – when all the draft summaries and press releases include exactly the same sentiments that appeared in the final versions – is simply ridiculous, not to mention entirely misleading for their readers. http://everythingshale.com/news/2016/november/30/article-funded-by-anti-fracking-foundations-silliest-attempt-yet-to-manufacture-controversy-over-epa-groundwater-study/ http://everythingshale.com/news/2016/november/30/article-funded-by-anti-fracking-foundations-silliest-attempt-yet-to-manufacture-controversy-over-epa-groundwater-study/ Wed, 30 November 2016 19:35:59 http://everythingshale.com/news/2016/november/30/weekly-petroleum-stocks-11302016/ US crude oil stocks decreased by 0.9 MMBbl last week. Gasoline and distillate inventories increased by 2.1 MMBbl and 5.0 MMBbl respectively. Yesterday afternoon, API had reported a crude oil withdrawal of 0.72 MMBbl, whereas analysts had expected a small build of 0.58 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted an increase of 0.5 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be up 9 MBbl/d from last week per EIA’s estimate. Imports were down 0.03 MMBbl/d last week to an average of 7.5 MMBbl/d. Refinery inputs averaged 16.3 MMBbl/d (114 MBbl/d less than last week), leading to a utilization rate of 89.8%. The petroleum stocks report has bullish and bearish elements this week. The crude oil withdrawal is bullish, as it runs contrary to the analyst expectations of a build. However, the large builds in gasoline and distillate inventories are bearish, especially given that refinery utilization remains below 90%. Prices are trading on the news that OPEC has agreed to a production cut and very little attention is being paid to the storage report. Prompt month WTI prices are up $3.25/Bbl today, trading at $48.48/Bbl at the time of writing. See Drillinginfo’s EIA Charts . Crude oil prices jumped this morning on news that OPEC has agreed to reduce output by 1.2 MMBbl/d. OPEC is expected to provide more details later today regarding the mechanics of the cut. If successfully implemented, the oversupply could be fixed as soon as 1Q2017. The market had largely expected an agreement to be announced, as without one the integrity of OPEC would have been compromised. Now the focus shifts to understanding the details of the deal and the likelihood of OPEC being able to enforce the production cut. The cartel has a bad reputation in terms of making good on production quotas, as “cheating” among members has been a marked problem in the past. The details of the deal will come under great scrutiny as the market will look for a set and feasible plan to achieve the 1.2 MMBbl/d cut. Prices in the short-term will depend on how believable the details of the production cut are. In the coming months, traders and analysts will keep a close eye on how well OPEC enforces the quotas. If the 1.2 MMBbl/d cut is successfully implemented, the effects would be quantifiable starting in February, as cargo schedules are usually set one to two months in advance. The market was already on track to fix the oversupply situation by 2H2017, so the OPEC cut would speed that process up and fix the inventory overhang quickly. However, the duration of the OPEC production quotas becomes uncertain when considering the supply deficit would start to become significant in the latter part of next year. If the 1.2 MMBbl/d cut can be implemented successfully, prices could average in the $60/Bbl range next year. Drillinginfo expects that enforcing the 1.2 MMBbl/d cut will be tough and the amount taken off the market is likely to be less than that. The details of the deal will prove crucial in determining whether the quoted production cuts are believable, so expect prices to remain volatile until the market can digest the mechanics of how the cuts will be implemented. http://everythingshale.com/news/2016/november/30/weekly-petroleum-stocks-11302016/ http://everythingshale.com/news/2016/november/30/weekly-petroleum-stocks-11302016/ Wed, 30 November 2016 17:10:16 http://everythingshale.com/news/2016/november/30/america-knows-better-addressing-climate-change-is-good-business/ President-elect Donald Trump made claims of his own business smarts a cornerstone of his campaign. Vote for him, the logic went, and send a first-rate businessman to the Oval Office to apply business acumen to make America great. Unfortunately, Trump's actions to date on climate and energy notably charging a climate change denier with leading the EPA transition and signaling desire to abandon the historic Paris climate accords send a message of business obliviousness. In contrast, a smart business approach would embrace tackling greenhouse gas emissions and supporting clean energy. Here are four reasons why: 1. Create American jobs The opportunity to create new American jobs in the transition to clean energy is tremendous. There are now more jobs in solar energy than in coal mining, and the number of solar jobs has grown more than 20 percent in each of the last three years. States like Florida and Nevada are bountiful in sun and can contribute to American energy self-sufficiency. Moreover, just as smart action to nurture domestic clean energy can accelerate jobs in the renewable sector, there are jobs on the line helping the oil and gas industry reduce its air pollution in a cost effective way. Environmental Defense Fund found that there are over 70 American firms employing Americans to help keep potent methane emissions in natural gas pipelines and out of the atmosphere. These jobs, thriving in states like Texas and Pennsylvania, are mainly small business and above average wages exactly what we all want to see more of. Of course, it's a competitive global economy, and taking our foot off the pedal in creating green jobs could well cede the space to others like China, which already leads the United States in clean energy investment. Whatever a politician's personal views on climate change, it is undeniable that global demand is growing for clean energy solutions. Growing demand means growing commercial opportunity for the United States in terms of innovation and exports. But only if we seize it. 2. Listen to leading American businesses Savvy business people listen to each other. So Mr. Trump should be interested to learn that 154 American businesses supported the American Businesses Act on Climate Pledge in the run-up to the Paris climate accords. These businesses are a part of the backbone of the American economy, employing nearly 11 million people across all 50 states, with a then market capitalization of over $7 trillion. Participating companies of particular interest: 21 st Century Fox, Dupont, Wal-Mart, even a name that will be familiar to any casino magnate MGM Resorts. These companies not only voiced support for a strong Paris outcome, they committed to increase their low-carbon investments in line with the direction of America's leadership. Pulling out the rug from American businesses investing in low-carbon would send a destabilizing signal to the market. More recently, 365 companies including Unilever, Intel, General Mills and others reinforced that implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in existing low-carbon investments into the trillions of dollars the world needs to bring clean energy and prosperity to allâ€. In sum, the overwhelming voice of businesses who have weighed in on the Paris talks are supportive of climate action. This business groundswell cannot be ignored. Nor should Trump ignore his own prior signing of a 2009 letter that failure to act on climate and the environment would cause catastrophic and irreversible consequences for humanity and our planet. 3. It hits home Continued American leadership on climate change can help mitigate physical risks to some of Mr. Trump's most cherished investments, for example the Mar-a-Lago golf club in Palm Beach. NOAA found that tidal flooding is increasing in frequency within the U.S. coastal communities due to sea level rise from climate change and local land subsidence.†Just a week before the election, the Palm Beach Daily News reported that the local Shore Protection Board unanimously recommended a six-figure coastal vulnerability evaluation†as flooding has remained long after high tide in certain cases. 4. Voters want clean energy One of many things that will change for Donald Trump is that going from CEO to President means having a boss actually about 300 of million of them. A recent Gallup poll found that 64% of Americans worry a fair amount†or a great deal†about climate change, an increase from last year, and including 84% of Democrats, 64% of independents, and 40% of Republicans. Clean energy is also wildly popular, with over 80% of Americans saying they support increased wind and solar, according to a recent Pew Poll . Early on the campaign trail, Donald Trump often used his association with his alma mater, the Wharton School at the University of Pennsylvania, as Exhibit A in establishing his business smarts. Political leaders including Mr. Trump must learn from experts like Wharton's Professor Eric Orts, who noted that moving away from President Obama's climate change polices would come with stiff costs. From missing out on job creation to ignoring business leaders who have studied the issue and have a stake in its resolution, and from fueling risk to Trump's own business interests to overlooking voter desires, the case is clear that the costs are stiff indeed. Climate action is good business, and the smart money says it's time to stay the course. By Ben Ratner Originally Published on November 21, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/30/america-knows-better-addressing-climate-change-is-good-business/ http://everythingshale.com/news/2016/november/30/america-knows-better-addressing-climate-change-is-good-business/ Wed, 30 November 2016 15:00:45 http://everythingshale.com/news/2016/november/30/desperate-anti-fracking-wayne-forest-campaign-tries-to-use-nodapl-to-revive-interest/ Fringe anti-fracking activists, feeling a bit desperate after their failed attempt to ban fracking in the Wayne National Forest, are now calling on “national and international voices” to try to stop oil and gas development. Recently, two Ohio activists tried to make a big deal about the fact that they’ve been recruiting activists from California to lobby their cause in Washington, D.C. against development in the Wayne National Forest. Those California folks come from a group called SprouTogether and one of its activists, Nathaniel McCarthy, created a petition on Change.org to “Stop the Auctioning of Wayne National Forest for Oil” and recently delivered it to the BLM. Activists boasted that they had collected over 90,000 signatures, but how many were actually from Ohio? Well, their media stunt put their desperation in the spotlight as the activists openly admitted they had no choice but to recruit help “ from all over the world .” As Roxanne Groff, leader of the Athens County Fracking Action Network stated, “When over 90,000 people weigh in from all over the world (and) not just Ohio, that’s an outcry from all over to say climate change is an issue that must be dealt with.” The level of support, especially from Ohioans, is pretty obvious in the following picture taken at the “rally.” Photo: from SprouTogether Facebook page shows the “huge” the interest really was “from all over the world”. After suffering enormous defeats on Election Day, it’s not at all surprising that anti-fracking activists are literally throwing spaghetti on the wall to see if anything sticks. So in an effort to try to revive their failed campaign, they’ve taken to the Dakota Access Pipeline playbook for help. According to their Change.org petition, “ It started with the Dakota Access Pipeline (DAPL). We have proven that through peaceful protest, we can fight back against fracking, which can destroy wildlife, poison water sources, and even push forward climate change. Even so, companies silently continue to push fracking in other areas, Even a national forest. Wayne National Forest is located in Southeastern Ohio. Among rare plants and abundant wildlife, a large portion of the Wayne runs along the Ohio River, which supplies drinking water to over 5 million people. This forest is still in danger of fracking, however. The United States Bureau of Land Management is holding an auction to lease off 1,600 acres of the forest with special interest to oil companies. These companies will drill wells, extract oil, and leave once the lease is up. But that is still enough time to leak into the Ohio River, poisoning millions of people, just like the DAPL risked.” According to the Stop Fracking Ohio Facebook page, the defeated anti-fracking fringe environmentalists are now calling on “Any of the Ohio or American Native-American tribes, #nodapl Church, or are interested press or other individual or group,  please gather at the front entrance of Wayne National Forest at 9:00 am on Saturday, December 10 with petitions and literature in hand as well as thermos containers of much needed coffee and refreshments. Let’s start ALL working together for the Wayne!” Of course, their proclamations are short on the facts. BLM and the U.S. Forest Service have been reviewing the merits to lease federal minerals located under the Wayne National Forest for over six years, long before interest in the Dakota Access Pipeline began. There has been extensive public scoping and input after which the federal agency determined leasing would move forward, with the first sale of minerals slated to be auction via a an online sale December 13 th . BLM consulted with the Ohio State Historic Preservation Office (SHPO) and tribes. According to the BLM’s Environmental Assessment the SHPO “found no adverse effect within the scope of the Proposed Action” (to lease federal minerals). Further, the BLM specifically states (page 19) of the EA , “On November 6, 2015, the BLM sent certified letters to seven federally recognized tribes who have a known connection to the area notifying them of the Proposed Action and asking to identify any concerns with respect to the Proposed Action. To date, the BLM has received no responses to these letters .” (Emphasis Added) The bottom line is that the Change.org petitions “from all over the world” are not actual protests and for the most part, they’re not coming from actual Ohioans. The BLM is very clear as to what exactly constitutes a “protest” at this point in the process and a bunch of internet generated petitions are not official protests as is clearly defined by the BLM . Of course, it’s a lot easier to stage media stunts than it is to read the fine print and engage formally, as bipartisan elected officials, landowners, and groups from all over the state have done in support of leasing mineral in the Wayne. http://everythingshale.com/news/2016/november/30/desperate-anti-fracking-wayne-forest-campaign-tries-to-use-nodapl-to-revive-interest/ http://everythingshale.com/news/2016/november/30/desperate-anti-fracking-wayne-forest-campaign-tries-to-use-nodapl-to-revive-interest/ Wed, 30 November 2016 12:09:34 http://everythingshale.com/news/2016/november/30/what-would-a-us-china-trade-war-mean-for-commodity-exporters/ During the election the now President-elect Donald Trump made much of “making America great again” and bringing manufacturing back to America. He singled out steel in particular as a sector that had been destroyed by imports, especially from China, saying during the televised presidential debates that China was dumping steel and “killing our workers.” In January this year Trump even suggested that he would put a 45% tariff on Chinese imports in part to rescue US manufacturing. In reality Chinese exports of steel to the US have long been in decline – mainly due to the numerous countervailing duties and  anti-dumping tariffs which the US applies to Chinese finished steel products. This can be seen in the chart below which shows Chinese exports of finished steel products to the US and the rest of the world. In 2015 Chinese exports to the US were only 2.4 million mt, down 29% on the previous year, accounting for just 2% of China’s total exports of 112 million mt. However, when we look at Chinese exports of not only finished steel but also items manufactured from steel and aluminum like pipes, tubes, sheet piling, tanks, drums, fabricated sections, nails, cables and even barbed wire, the picture is somewhat different. We have used Harmonized System (HS) trade data that classifies traded products into internationally standardized groups to analyze China’s trade with the US. The chart below shows China’s exports of three groups of metal products to the US; iron and steel (HS code 72) – primarily finished steel like HRC and bar; products manufactured from iron and steel like drums, nails and wire (HS code 73); and also aluminum and products manufactured from aluminums (HS code 76). As can be seen trade in steel and aluminum metals and products has risen over the last couple of years to reach $15 billion last year with articles manufactured from steel items accounting for 70% of this trade. This makes China the second-largest source of imports of steel and aluminum products into the US after Canada but above Mexico, which sounds significant. But to put these exports in context, steel and aluminum account for just 4% of China’s $410 billion of total exports to the US in 2015. China also imports steel and aluminum from the US, although the trade flow is much smaller at around $1.3 billion in 2015. Should a Trump presidency put a 45% tariff on Chinese imports then we could expect to see a dramatic fall in these Chinese steel and aluminum exports. But when it comes to trade policy, as in physics, for every action there is an equal and opposite reaction. And the US could expect to see China retaliate, slapping tariffs on US goods exported to China. Interestingly, although the industries mostly likely to suffer from such an action are high end manufactured goods like commercial aircraft, processors and integrated circuits and automobiles, US commodities could also suffer as China is a major importer of US soya beans which are used primarily as animal feed. Indeed, as can be seen in the chart below when we analyze the 6 digit HS code data for 2015, Chinese imports of US Soya beans were $12.5 billion second only to imports of commercial aircraft which totaled $16.4 billion. What is interesting about China-US commodities trade is that across most categories of commodities (and here we include steel and aluminum articles in our definition of commodities), China runs a trade deficit. This can be seen in the chart below. Prior to 2008, China was a net exporter of commodities as exports of iron and steel exceeded imports of agricultural products. Since 2008 Chinese exports of iron and steel to the US have not recovered to the levels we saw before the financial crisis, while Chinese appetite for imported agricultural products – primarily soya beans – as well as metals ores and fossil fuels from the US have all contributed to China’s commodity trade deficit with America. Whether a Trump presidency will really raise tariffs on Chinese imports remains to be seen. If it does, any attempt to block Chinese steel imports may well have a fairly minor impact on US exporters of coal, oil and metals. But, given that the US exports around 50% of its total soya bean production, any attempt to save US manufacturing may well have unintended consequences for its agricultural sector. The post What would a US-China trade war mean for commodity exporters? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/30/what-would-a-us-china-trade-war-mean-for-commodity-exporters/ http://everythingshale.com/news/2016/november/30/what-would-a-us-china-trade-war-mean-for-commodity-exporters/ Wed, 30 November 2016 04:21:27 http://everythingshale.com/news/2016/november/30/environmental-think-tank-with-pro-gas-policies-the-us-can-outperform-paris-emission-targets/ Many environmentalists have bemoaned the election results as nothing short of a “ nightmare ” for international efforts to address climate change. But a new report by researchers that Time Magazine has called “ heroes of the environment ” illustrates why that view is actually irrational. Ted Nordhaus and Jessica Lovering of the environmental think tank, The Breakthrough Institute, ask the question in a new analysis: “Does Climate Policy Matter?” The answer is an emphatic “no.” The report finds CO2 reductions have thus far been driven by market forces rather than “emissions targets and timetables or international agreements intended to legally constrain national emissions.” To put it another way, increased use of natural gas — not government policy —has driven down emissions and will likely to continue doing so in the future, regardless of the political landscape. From the report, “… if results to date are any guide, real progress on decarbonization primarily depends upon specific domestic energy, industrial, and innovation policies , not emissions targets and timetables or international agreements intended to legally constrain national emissions.” It is for that reason that the analysis finds that the Trump administration’s expected opposition to the Obama administration’s Clean Power Plan and the U.S.’s Paris commitments are largely irrelevant, “It’s certainly possible that a Trump administration will drop the Clean Power Plan and renege on the Paris accord. But as long as it keeps the nation’s nuclear power plants online, continues tax incentives for wind and  solar energy  and stays out of the way of the shale revolution … the United States might outperform the commitments that the Obama administration made in Paris…” (emphasis added) Indeed, publicly available data show the U.S. is already on pace to meet its Paris commitments even without the implementation of the Clean Power Plan, which the report notes would only serve to codify a coal-to-gas transition that has been underway in the power sector for more than a decade, as the following graphic from a recent U.S. Department of Energy report illustrates. As the above graphic shows, natural gas’ share of total U.S. electrical generation has increased 76 percent during since 2005. And experts agree this is the No. 1 reason why energy-related CO2 emissions have declined 12 percent since 2005. The U.S. Energy Information Administration (EIA) recently noted the current shift of electrical generation fuels to natural gas has accounted for 68 percent of the total reduction in U.S. energy-related CO2 emissions during last decade. The Breakthrough Institute (BTI) has previously found that natural gas has prevented 17 times more carbon dioxide emissions than wind, solar, and geothermal  combined . And a recent report by the Manhattan Institute shows that for every ton of CO2 emission reductions attributable to solar power, 13 tons can be attributed to natural gas. EIA also reports that between 2006 and 2014, natural gas has prevented 1.25 billion metric tons of carbon dioxide   from being emitted from power plants in the United States. By comparison, the use of renewable energy has prevented 789 million metric tons of carbon dioxide, according to the EIA. Supporting the Breakthrough Institute analysis’ topline conclusion, these reductions have come without the U.S. ratifying the Kyoto Protocol or adopting the Waxman-Markey cap-and-trade bill that failed to pass the U.S. Congress in 2010. In fact, the Breakthrough Institute report points out that the proposed emission cap in that bill would have been higher than actual emissions have proven to be to date , as the following graphic from the report illustrates. The analysis even finds that U.S. CO2 emissions might have been higher had the cap-and-trade bill passed, “By some accounts, moreover, emissions might have fallen more slowly had Waxman-Markey been enacted due to the over-allocation of free emissions credits and a number of other provisions that would have supported coal generation in the early years of the policy.” In comparison to the U.S., the report notes that countries that have tried to reduce emissions through government-mandated conversion to renewables have struggled to meet emissions targets. For instance, Germany  — which in 2010 announced an energy policy called Energieweinde , or energy revolution, with the target of increasing the relative share of renewable energy in gross electrical generation to 35 percent by 2020, 50 percent by 2030, 65 percent by 2040, and 80 percent by 2050 — actually has higher CO2 emissions than were targeted by that government-mandated policy. The Breakthrough Institute analysis also notes that the United Kingdom appears to be the lone exception of a country actually seeing success reducing CO2 emissions via government policy, but also notes that success has been thanks in part to efforts to increase natural gas use , “In most other cases, climate commitments and policies have had little or no discernible impact upon emissions .” This analysis led to the New York Times — of all media outlets — to publish a story headlined “Trump’s Climate Policies May Work Out in the Planet’s Favor,” with author Eduardo Porter conceding, “For all his promises to bring back coal jobs in Appalachia, Mr. Trump might be drawn in a different direction by his own objectives of promoting natural gas and achieving energy independence. If he gives those goals high priority, he could well end up pursuing policies that would ultimately lower carbon emissions.” The analysis even notes, “By contrast, a Democratic administration indifferent to the fate of the nation’s existing nuclear fleet and hostile to shale gas production might ultimately slow US decarbonization trends .” This prompted Berkeley physicist Richard Muller, a well-known pragmatist with regard to natural gas, to say , “Carbon-dioxide emissons will be lower under Trump than they would have been under Clinton. Trump appears to favor nuclear power and shale gas, and both reduce carbon emissions substantially, at least when compared to coal. If you are optimistic about solar and wind, then you can say that shale will not reduce emissions as much as solar and wind would have. I saw no similar support for these energy technologies from Clinton, who seemed to agree with the Obama approach: don’t oppose, but don’t reduce the impediments.” These developments — made possible by natural gas — should really come as no surprise at this point. A recent Global Carbon Project (GCP) report notes the U.S. saw its CO2 emissions decline 2.6 percent from 2014 to 2015 despite using more oil and gas last year. This is no coincidence considering natural gas overtook coal as the top source of electrical generation for the first time last year. The U.S. is also projected to see its carbon emissions decline another 1.7 percent in 2016, according to the report, as U.S. energy-related CO2 emissions fell to their lowest levels since 1991 during the first six months of 2016. We’ve reduced our overall CO2 emissions a whopping 11.5 percent from 2005 levels — giving us the distinction of being the only major country to see carbon reductions during that timespan. And more remarkably, the current three-year trend of flat worldwide CO2 emissions and declining U.S. emissions detailed in the GCP report has come at a time in which both the U.S. and world economy has grown 15 and three percent, respectively, an unprecedented trend. And although environmentalists often incorrectly claim that methane emissions from oil and gas development outweigh the CO2 reductions the U.S. has achieved recently, EPA data shows that overall methane emissions are down six percent since 1990. All of this points to the fact that the U.S. is setting the tone for the rest of the world in terms of GHG emissions thanks to the shale revolution. No wonder Robert Stavins of Harvard University echoed the conclusions of this Breakthrough Institute analysis when he recent said , “The most important factor in terms of carbon emissions in the United States is the price of natural gas” rather than any government scheme or regulation. http://everythingshale.com/news/2016/november/30/environmental-think-tank-with-pro-gas-policies-the-us-can-outperform-paris-emission-targets/ http://everythingshale.com/news/2016/november/30/environmental-think-tank-with-pro-gas-policies-the-us-can-outperform-paris-emission-targets/ Wed, 30 November 2016 02:56:21 http://everythingshale.com/news/2016/november/29/tapping-the-next-generation-of-supercomputers-to-bring-fusion-energy-to-the-world/ Leading the initiative are the U.S. Department of Energy (DOE), the Department of Defense and the National Science Foundation. Within the initiative, DOE has the lead on exascale. Once developed, exascale computers will perform a billion billion operations per second, a rate about 50 times faster than the most powerful supercomputer in the U.S. today. Exascale machines are expected to be ready in the United States in the mid-2020s. The PPPL-led program will develop the first complete simulation of the superhot gas called plasma that fuels fusion reactions. Such simulations will enable physicists to predict how the plasma will behave in fusion facilities and could lead to well-engineered reactors that put a star in a jar†to produce safe, clean and abundant energy for generating electricity. Plasma, made up of free-floating electrons and atomic nuclei, comprises 99 percent of the visible universe and often is called the fourth state of matter. Fusion of light elements is the process the sun and stars use to create energy, and scientists need this massive computing power to help simulate the plasma behavior and recreate these reactions here on Earth. If successful, fusion could provide energy for all humankind essentially for millions of years. Directing the PPPL-led, four-year project is Amitava Bhattacharjee, head of the Theory Department at PPPL and Professor of Astrophysical Sciences at Princeton University. Co-principal investigators are PPPL physicist C.S. Chang and Andrew Siegel, a computational scientist at the University of Chicago. Joining the highly complex project are the Argonne, Lawrence Livermore and Oak Ridge National Laboratories, together with Rutgers University, the University of California, Los Angeles (UCLA), and the University of Colorado, Boulder. The participants will work to combine a computer code called XGC, which models behavior at the edge of the plasma, with a code called GENE, which models behavior of the plasma core. Combining the two high-performance codes - a feat never before attempted - will provide a holistic view of the entire plasma volume. The two codes have been years in the making. Chang and his group developed and maintain the XGC program; Frank Jenko at UCLA created and maintains GENE. The code is so complex that it uses 90 percent of the capacity of Titan, the fastest supercomputer in the United States. Titan performs at the petascale and completes a million billion calculations per second at the Oak Ridge Leadership Computing Facility, a DOE Office of Science User Facility at Oak Ridge National Laboratory. Taking into account all the physics in a fusion plasma requires enormous computational resources,†Bhattacharjee said. With the computer codes we have now, we are already pushing on the edge of the petascale. The exascale is very much needed in order for us to have greater realism and truly predictive capacity.†Watch the video above to view a high-performance simulation of the development of blobby turbulence at the edge of fusion plasma. This simulation was produced on Titan with the XGC code. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/29/tapping-the-next-generation-of-supercomputers-to-bring-fusion-energy-to-the-world/ http://everythingshale.com/news/2016/november/29/tapping-the-next-generation-of-supercomputers-to-bring-fusion-energy-to-the-world/ Tue, 29 November 2016 15:00:57 http://everythingshale.com/news/2016/november/29/do-new-doe-pace-guidelines-do-enough-for-low-income-residents/ As PACE expands beyond California, stricter consumer protections will be needed. The U.S. Department of Energy has updated its guidelines for property-assessed clean energy financing for homes, as residential property-assessed clean energy programs begin to blossom beyond California. In a few short years, the residential PACE market has grown from nearly nothing to more than $2 billion . Most of the projects are in California, but there are also expanding markets in Florida and Missouri. PACE programs allow investments in water- and energy-efficiency retrofits and distributed renewable generation to be paid back through property taxes, which lowers the risk for both lenders and property owners. PACE financing can potentially open up a far larger swath of the energy-efficiency market than traditional programs have been able to. For example, in a few short years, PACE has become one of the largest loan programs by volume, according to Lawrence Berkeley Lab, with the Mass Save HEAT Loan program being the other leader. The DOE guidelines are not binding, and are therefore limited — since they are essentially voluntary. Even if they were binding, they do not go far enough to protect consumers, some consumer groups argue. At a minimum, PACE loans should have at least as strong of protections as conventional mortgages. States also need to adopt enforceable rules to protect homeowners from abusive sales practices,†Brian Simmonds Marshall, policy counsel at Americans for Financial Reform, said in a statement. No one argues that the most recent guidelines are not an improvement, however. The guidelines suggest there should be an eligible products list and that the term of the assessment of the PACE loan should not exceed the useful life of what's being installed. The DOE also calls for PACE contractors to recommend basic weatherization as part of their package, which can boost energy savings. People don't often set out to do energy efficiency,†said Ellen Qualls, VP of communications at Renovate America, the largest residential PACE administrator by far with its HERO program. They set out to do solar or another project, then they'll get energy efficiency.†The question is, what is the cheapest and most readily available form of financing when people set out to do those projects? Renovate America argues it opens up a market that other financing mechanisms, from utility programs to home equity loans, have been unable to tap in the decades they've been in existence. But some consumer protection groups argue that there can be lower-cost options. Interest rates for residential PACE are often around 7 percent, while a home equity line of credit could be half of that and the Mass Save HEAT program has 0 percent financing for low-income residents. But few, if any, contractors offer comparison shopping for all of the financing options and rebates available to people in one easy format. At the very least, the DOE's latest guidelines say that PACE cannot be represented as a no-cost or government program. The DOE has also recommended that an energy audit should be required. But while the DOE says that it should be done only by a qualified energy assessor, the largest PACE program administrator in the country argues that technology can also do the job, and at a lower cost. We encourage home energy audits, but to require them…would be an impediment to energy-efficiency projects moving forward,†said Qualls. As the HERO program integrates a software energy audit technology it bought last year from CakeSystems , it could become the default baseline for auditing for most customers. However, stakeholders have all acknowledged that an audit may not be best in the case where it is an emergency replacement, such as for a furnace. Beyond the audit issue, it is the terms of the loan and potentially predatory sales tactics that have consumer groups most concerned. National Consumer Law Center attorneys said that nearly every legal aid they've spoken to in California have heard from poor or elderly customers about aggressive sales tactics or financial burdens they didn't anticipate from PACE programs. Renovate America said it is trying to increase disclosure, and it now offers a ‘know before you owe' disclosure form, similar to disclosures for home mortgages. We want to make sure as we expand access to more kinds of homeowners we do it in a way that isn't a bad idea for them financially,†said Qualls. For now, these guidelines will ideally impact how states beyond California lay out their rules for residential PACE. Renovate America has said it will adopt what the DOE has outlined. California, as a first mover, has also strengthened its consumer protection rules for PACE earlier this year. We pledge to make these best practices the operating manual for our program going forward,†J.P. McNeill, founder and CEO of Renovate America, said in a statement about the new DOE guidelines. For leading residential PACE providers, such as Renovate America and Ygrene, they have a vested interest in comprehensive regulation where there is a level playing field that keeps out bad actors. As for federal oversight, we would welcome that,†said Qualls. We want to make sure everyone is playing by the same rules.†By Katherine Tweed  Originally published on Greentech Media November 22, 2016 Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/29/do-new-doe-pace-guidelines-do-enough-for-low-income-residents/ http://everythingshale.com/news/2016/november/29/do-new-doe-pace-guidelines-do-enough-for-low-income-residents/ Tue, 29 November 2016 15:00:18 http://everythingshale.com/news/2016/november/29/oil-demand-and-electric-cars-a-disjointed-dilemma/ With the automotive industry tipped as ripe for disruption and a growing imperative to rein in climate change, the recent rise of electric cars has sparked both excitement and angst of late within the global energy industry. Tougher emissions regulations, falling battery costs, and breakneck advances in networked technology means affordable alternative to conventional vehicles are on the verge of a mainstream breakthrough. Once a critical tipping point is reached — so the narrative goes — mass market adoption of electric transport will trigger an abrupt and painful end to the hydrocarbon age, taking with it the fortunes of oil producers. In reality, the future of electric cars and their impact on oil demand remains far from clear. Forecasts of their market penetration vary widely and require substantial guesses on oil prices, further efficiency in existing motors, and government policies. One thing that is clear is the potential scale of the disruption for the oil industry. More than 90% of the world’s road transport fleet continues to run on oil products and the sector accounts for over 40% of total oil demand. So how painful could a radical, faster than expected transition away from oil be for the industry? Last week the International Energy Agency took a stab at answering that question for the first time. According to a “disjointed transition” scenario in its industry touchstone World Energy Outlook, the answer is potentially “massive”. Oil demand could collapse by 16.4 million b/d and producers would face “major losses” with $380 billion of above-ground investment written off, the IEA believes, if the oil industry is caught off guard by a surge in green energy use from 2030. The ‘disjointed’ scenario assumes that, prior to 2030, operators invest on the assumption that prices and demand will continue to rise under its central scenario. But, given the sharply diverging outlooks for oil demand in its central and low-carbon scenarios, the IEA warns that risks to the industry are even greater the longer it waits to readjust to a lower carbon world. Predictably, oil producers themselves are more sanguine over their long-term business prospects. They note, correctly, that oil and gas will still play a major role in the global energy mix for decades to come. Pressed on the future potential for large-scale stranded assets that may become too costly or dirty to produce, they point to average industry reserve life ratios of little more than a decade and the fact that more reserves are needed to replace output from mature fields. Indeed, at current rates, the world is losing 5 million b/d a year of oil supply from fields in decline. It may be a back-of-the-envelope guesstimate but the very fact that the IEA has modelled such a traumatic oil demand scenario is a telling sign. At the very least it is a nod of recognition that concerns over the potential for major oil industry upheaval due to falling demand in transport are taking root. Overall, however, the IEA is more conservative than most on the likely and potential impact of electric cars on global oil demand. Its central energy scenario assumes an additional 1 million b/d of oil demand is displaced by electric cars in 2040 up from 300,000 b/d last year. That figure rises to 6 million b/d under its lower carbon demand scenario but that is less than half of the more alarming 13 million b/d prediction by Bloomberg New Energy Finance which grabbed headlines earlier this year. Much of the difference comes down to judgment calls on the future costs of storing electric power. EV battery prices have not only plummeted by more 65% since 2010 but the fall has consistently outpaced most previous projections. This progress on bringing down costs and improving capacity — so the logic goes — and will continue to surprise to the upside. The IEA is more cautious here also. It believes the math over when EVs become competitive with conventional cars based on their battery costs is too simplistic. Even if EV battery costs more than halve by 2040, and conventional cars continue to become more fuel efficient, the higher cost of EV’s and home charging equipment will negate their cost advantage, it claims. As a result, payback times for the extra outlay on EV cars are still “well above the two-to-three-years that a consumer would typically tolerate” even by 2040. Oil prices are also a key factor influencing the adoption of EVs over internal combustion engines. A lower price outlook shifts the cost competitiveness advantage towards conventional oil-fueled engines, which continue to improve on fuel efficiency. As such, the current “lower for longer” industry mantra on future oil prices may prove a silver lining for oil companies staring into an increasingly blurry crystal ball on demand for their oil. The post Oil demand and electric cars: A disjointed dilemma appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/29/oil-demand-and-electric-cars-a-disjointed-dilemma/ http://everythingshale.com/news/2016/november/29/oil-demand-and-electric-cars-a-disjointed-dilemma/ Tue, 29 November 2016 13:41:51 http://everythingshale.com/news/2016/november/29/opec-may-end-up-taking-a-tough-route-in-spite-of-itself/ OPEC meets November 30, as Energy Economist goes to press, in an attempt to reach some form of production freeze deal, but amid a number of disputes that make agreement very difficult. There are short-term incentives, under the pressure of summitry, to come up with something — anything! — but the underlying problems mean that any deal reached is unlikely to have much substance or longevity. There are a plethora of problems. First and foremost, Saudi Arabia has nothing to gain from acting alone. It could reverse its market share strategy, and resume its traditional role as swing producer, but this would only serve to rejuvenate non-OPEC production. Moreover, future growth in Iraqi and potentially Iranian output means that Saudi Arabia would face competition not just from non-OPEC producers, but internally within OPEC. Even short-term production constraints fly in the face of Iraq and Iran’s medium-term growth ambitions. More broadly, the need to monetize oil reserves has become more pressing, not just because of short-term budgetary requirements, but because of the possibility that low carbon energy initiatives will eventually see oil demand start to decline. As a result, whether OPEC can function as a cohesive organization is going to depend in future on whether Saudi Arabia, Iran and Iraq can find common ground. The basic rule on this is that they must all benefit or suffer equally from any policy position, not least because Saudi Arabia and Iran are locked in various proxy wars in the region and it is oil money that funds them. But both Iran and Iraq view themselves as special cases. Iraq is still fighting Islamic State, Iran is recovering from sanctions. Whatever the legitimacy of their claims, either historically or based on current problems, exemptions mean unequal burdens. Moreover, Iran and Iraq are not the only special cases. Libya and Nigeria too have claims for lenient treatment. Libya is very slowly, in fits and starts, raising production, hitting an 18-month high of about 600,000 b/d in October. Nigerian output remains below capacity because of further outages at one of its main Niger Delta export grades. Together they have about 800,000 b/d of production that could come back on-stream in the relatively near future; equally, output could be hit by further instability. The unpredictability of production from Nigeria and Libya makes concerted action by Iran, Iraq and Saudi Arabia all the more necessary, if an OPEC deal is going to have any real impact. Russian participation is contingent on unanimous agreement within OPEC and even then offers little — a freeze in Russian output at record levels, when little further growth is expected. This suggests that the actual numbers probably now mean less than the principles, if any, that this meeting establishes. If agreement can be reached between Saudi Arabia, Iran and Iraq, it might suggest a return to a more traditional OPEC policy in which all three are prepared to act together as swing producers. If such a message could be engineered, oil prices would probably rise, but agreement and implementation are two different challenges, and it would be a shaky, unstable coalition at best. If OPEC fails to agree anything, oil prices are likely to fall, and OPEC’s credibility as an organization will be tarnished further. The most likely outcome is, of course, the middle ground — a face-saving fudge, which the market may well buy for a time. Ironically, free market competition is the only route by which OPEC can re-establish its control over the market, and create sufficient space to meet the growth ambitions of its major producers. It is also the toughest route, but one that OPEC will probably end up taking in spite of itself. The post OPEC may end up taking a tough route in spite of itself appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/29/opec-may-end-up-taking-a-tough-route-in-spite-of-itself/ http://everythingshale.com/news/2016/november/29/opec-may-end-up-taking-a-tough-route-in-spite-of-itself/ Tue, 29 November 2016 05:01:19 http://everythingshale.com/news/2016/november/28/the-week-ahead-opec-meeting-on-wednesday-to-bring-price-volatility/ CRUDE OIL • Crude oil inventories decreased by 1.3 MMBbl last week as reported by the EIA. The gasoline and distillate inventories increased 2.3 MMBbl and 0.3 MMBbl respectively. The unexpected crude oil withdrawal was due to lower imports (down 845 MBbl/d) and slightly higher refinery runs (up 271 MBbl/d). The most important number to keep an eye on, total petroleum inventories, posted an insignificant decline of 0.1 MMBbl. The report was neutral, as the bullish decline in crude oil stocks was offset by the bearish, higher than expected, growth in gasoline inventories. Reporting early due to the Thanksgiving holiday this week, Baker Hughes reported on Wednesday that five rigs had been added in the US, extending the rig count gains. • The markets chose to focus on OPEC related news and largely ignore any other fundamental news this week: 1. The market began the week optimistic about the prospects of an OPEC cut. The cartel was believed to be close to agreeing on the details of a cut of 4-4.5% from current output levels. Libya and Nigeria were going to be kept exempt and Iran was going to be allowed to cap production at current levels. 2. The market started giving back the gains on Tuesday as the prospects of Iran and Iraq agreeing to cap or cut production was placed under scrutiny. Iran is still targeting higher production levels (4-4.2 MMBbl/d) since the sanctions have been lifted and Iraq has made it clear that they want to remain exempt, as they need the revenue to fight ISIS. 3. Prices were down 4% on thin trade Friday, as Saudi Arabia pulled out of a Monday meeting with Russia regarding non-OPEC involvement in the cut. Saudi Arabia believes that OPEC members should reach a consensus regarding the cut before meeting with non-OPEC members. Russia was largely expected to propose to cap its production at current levels. The announcement once more highlighted that the cut (or the mere credibility of its enforcement) is still uncertain. 4. News also emerged that Saudi Arabia is planning to increase exports to Asia in January. The news comes fresh on the heels of data showing Russia has overtaken Saudi Arabia as the top exporter to China in October. It is unclear how Saudi Arabia would increase exports to Asia while also bearing the brunt of the production cut. • Crude oil prices are going to be dictated by OPEC this week. The market still expects OPEC to announce a cut after the meeting on Wednesday. The lack of a cut would significantly damage OPEC’s reputation. However, the clear indication from Saudi Arabia that no consensus has yet been reached among cartel members may be an attempt by them to save face in the event of a non-agreement. In the event of a cut announcement, the market will pay special attention to the details. Without a credible plan to reduce production, price gains from an announcement may be limited. It is also worth noting that any announced cuts would have little effect on production volumes until February, as exports are usually scheduled two months out. Drilinginfo expects prices to be volatile leading up to and in the immediate aftermath of the OPEC meeting. Additionally, traders may close open positions prior to the risky Wednesday announcement. NATURAL GAS • Total natural gas supply increased week-on-week by 200 MMcf/d driven by higher production from the Rockies, mainly a recovery from the prior week lows seen in the region. Canadian imports were unchanged again last week. • Demand for natural gas was the key player last week as some winter weather finally materialized. Total demand increased by over 9 Bcf/d last week. Res/Com drove the gains while Power, LNG and Mexican exports reported some losses. Weather forecasts for the upcoming week have increased to above normal and are expected to push demand down next week. • The first withdrawal of the season was reported by EIA last Wednesday, which came in a week earlier than expected. A 2 Bcf withdrawal was reported for the week ending Nov. 18 compared to a range of forecasts between -1 to +15. The market is currently anticipating a withdrawal in the 40’s Bcf on Thursday’s report, which is about 15% higher than last year. • The bullish storage report combined with the cooler weather last week had prices trading higher over 20 cents week-on-week. Although the storage report is expected to show a withdrawal larger than last year’s, the risk this week for gas prices is to the downside as temperatures are forecast to be warmer and could push demand lower. — Drillinginfo has acquired the assets, product lines and related services associated with Ponderosa Energy. Customers can now rely on a single partner for real-time, actionable intelligence and analytics and predictive support for investments in the industry, whether they are investing in exploration, production, buying, selling or trading. Learn more here. Learn more here: DrillinginfoPonderosa_Acquisition http://everythingshale.com/news/2016/november/28/the-week-ahead-opec-meeting-on-wednesday-to-bring-price-volatility/ http://everythingshale.com/news/2016/november/28/the-week-ahead-opec-meeting-on-wednesday-to-bring-price-volatility/ Mon, 28 November 2016 16:22:54 http://everythingshale.com/news/2016/november/28/energy-economist-africa-picking-on-the-little-polluters/ The recent spate of plans for coal-fired power plants in Sub-Saharan Africa has generated opposition on environmental grounds. Campaigners and some European governments argue that such projects are irresponsible in terms of carbon emissions. Yet while the contribution to climate change is certainly unwelcome, such criticism misses a lot of wider points. South Africa has been a coal producer and consumer of global importance for decades, but the rest of Sub-Saharan Africa has never consumed much coal. However, a 1.2 GW project is planned by Zuma Energy in Okobo in Nigeria and a 2 GW plant is to be developed on the Ghanaian coast by China’s Shenzhen Energy Corp. and Ghana’s own Volta River Authority. In addition, a string of plants are planned in two Southern African states with large coal reserves of their own, Botswana and Mozambique. Most recently, Power China and two Kenyan firms, Gulf Energy and Centrum, announced advanced plans to build and operate a 1,050 MW coal-fired plant at Lamu on the Kenyan coast, at the heart of a proposed huge new port and industrial complex. A $1.2 billion loan has already been agreed with Industrial and Commercial Bank of China. However, in this instance, Kenya’s Energy Regulatory Authority has rejected a licence application for the project. Criticism of such schemes in terms of the effect on air quality is entirely justified. The Global Burden of Disease Project earlier this year calculated that more than 5.5 million people die every year around the world because of air pollution, much of it caused by coal. This is appalling. But most of the flack aimed at Sub-Saharan Africa at present relates to climate change not local air pollutants. Accusations that African countries are being carbon negligent when they sanction coal plants seem unfair. Climate change has largely been caused by the industrialized world, to a large extent through coal consumption. The carbon emissions and coal demand of Sub-Saharan Africa are still a tiny fraction of those of developed nations, even of Western Europe after years of carbon restrictions. At the same time, millions of Africans still lack access to electricity, unlike their European counterparts. Coal-fired plants are to be developed in some African countries for the first time ironically because global warming is making rainfall more variable in some parts of the continent. This will almost certainly reduce power production at hydro schemes, including in Ghana and Kenya. In addition, lower international demand for coal has made it a cheap feedstock option for a time, although prices are now recovering. A little understanding would not go amiss. If the international community really wants Africa to have plentiful power supplies without the climate implications, then helping to fund low carbon alternatives would be a better strategy. The post Energy Economist Africa: Picking on the little polluters appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/28/energy-economist-africa-picking-on-the-little-polluters/ http://everythingshale.com/news/2016/november/28/energy-economist-africa-picking-on-the-little-polluters/ Mon, 28 November 2016 16:00:03 http://everythingshale.com/news/2016/november/28/indonesia-s-biodiesel-mandate-the-long-road-ahead-fuel-for-thought/ The Indonesian government should be congratulated for keeping its biodiesel blending mandate afloat despite a prolonged period of low oil prices. But the road to full B20 implementation is a long one and several factors including a recovery in oil prices, biodiesel exports and logistics will play an important role. Indonesia in late 2013 mandated that by 2016, the proportion of biodiesel blending in gasoil is to be 20% for subsidized and non-subsidized gasoil sold to transport, industries, and commercial sectors and 30% for gasoil sold to power plants. The mandate serves two purposes—lower gasoil demand and hence lower reliance on imports; and support for the biodiesel industry reeling from the effects of low oil prices and Europe’s anti-dumping duties. Since the government was implementing B20 at a time of low oil prices, industry observers were convinced that Indonesia will not be able to foot the bill of a mandate that looked expensive—in the billions of dollars for a full B20 implementation—to fulfill. Despite skepticism, the government seems to have, at least partially, overcome the key hurdle of a rising price tag for biodiesel blending in the face of low oil prices. The Indonesian government has financed the mandate with a $50/mt levy imposed on crude palm oil exports. Funds collected through this levy are used to subsidize state-owned biodiesel buyers Pertamina and AKR Corporindo so they do not need to pass on the blending cost to the end user. The export levy generated an income of Rupiah 1.72 trillion ($130 million) collected by the Indonesia Estate Crop Fund, or IECF from January to September 2016, according to an estimate by Rabobank. But the funds collected depends on export volumes, which in turn depends on weather and policies in Europe and the US. For example, recent EU court rulings could kick anti-dumping duties out the door, resulting in the EU market opening widely to imports from Indonesia. Meanwhile in 2017, palm oil production from Indonesia is projected to bounce back after a production crippling El Nino in 2016. This could mean a jump in exports and levy collection, which can be used to finance a much larger biodiesel blending program, said Caroline Midgley, Head of Biofuels Research at LMC International. Logistical hurdles According to a Pertamina source, the company is blending biodiesel in non-subsidized gasoil as well, but other industry players in Indonesia believe that it is not fully meeting the B20 mandate in this segment due to the costs involved. Although the blending mandate has been going reasonably well, logistics for the mandate are extremely slow and complex. Regulations for non-subsidized blending are more stringent than for subsidized gasoil since approximately half of the non-subsidized blending is done on customers’ facilities by Pertamina instead of at its own terminals. This creates an additional safety risk and Pertamina’s biodiesel suppliers are not willing to back safety guarantees asked for by the company. Pertamina terminals, which are located all over the country, do not have enough storage for the incoming biodiesel, therefore the company uses the barges which deliver the biodiesel as floating storage. This creates long delays and large demurrage bills for the suppliers, according to one biodiesel supplier. Pertamina does not pay for those bills, which then cut into the profitability of the suppliers. Industry observers estimate that actual blend volume currently could range anywhere from B7 to B12, while government sources claim a B16 blend percentage across the country, said a major Indonesian producer. Pertamina and AKR have procured 3.2748 million kiloliters (20.6 million barrels) of biodiesel via tenders in 2016. Biodiesel procurement data for private petroleum companies like Shell and Total, who also participate in the blending mandate, is not publicly available. The blending mandate may be supporting the local biodiesel industry, but it is yet to make a significant dent in Indonesia’s gasoil demand and imports. Gasoil imports have come off by a modest 2.7% year on year to 3.73 million mt over January-September 2016, according to official data. At the same time, gasoil demand is estimated to be flat at around 23 million kl (145 million barrels) this year compared with 2015. The post Indonesia’s biodiesel mandate—the long road ahead: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/28/indonesia-s-biodiesel-mandate-the-long-road-ahead-fuel-for-thought/ http://everythingshale.com/news/2016/november/28/indonesia-s-biodiesel-mandate-the-long-road-ahead-fuel-for-thought/ Mon, 28 November 2016 05:01:37 http://everythingshale.com/news/2016/november/25/secretary-of-defense-carter-presents-the-dod-distinguished-public-service-award-to-secretary-of-energy-moniz/ WASHINGTON, D.C. Secretary of Defense Ash Carter honored Secretary of Energy Ernest Moniz with the Department of Defense Distinguished Public Service Award, the department's highest civilian honor. Secretary Carter presented the award to Secretary Moniz at a ceremony at the Department of Energy (DOE) headquarters in Washington, D.C., in recognition of Secretary Moniz's leadership in strengthening the partnership between the Department of Defense (DoD) and the DOE in support of vital national security missions. We face a nuclear landscape that continues to pose challenges,†Carter said. Secretary Moniz has been a key player in helping to shape that landscape for decades, and for the better. He's led numerous international efforts to counter proliferation of weapons of mass destruction, engaging international partners to improve nuclear safeguards, and made verifiable nuclear reductions. He also personally played an instrumental role in the technical analysis and negotiations to secure the historic deal that is preventing Iran from developing a nuclear weapon. And of course supporting our nuclear deterrent mission and collaborating with DoD and all of our scientific challenges is only a part of what DOE does every day on behalf of the country.†The Distinguished Public Service Award is the DoD's highest honor for private citizens and non-career public servants. This award to Secretary Moniz, Carter said, underscores the fact that America's nuclear deterrent is the bedrock of national security and the highest priority mission of the Department of Defense. This year, Secretary Carter also presented the award to former Secretaries of State Madeline Albright and Henry Kissinger; former National Security Advisers Zbigniew Brzezinski and Brent Scowcroft; former Sen. John Warner; Director of National Intelligence James Clapper; and Secretary of Homeland Security Jeh Johnson. I am honored to accept this award from Ash Carter, a friend, a colleague, and an outstanding public servant,†Moniz said at the ceremony. And especially in front of this audience that shares in this award. It recognizes how the men and women of the Departments of Defense and Energy work together to ensure America's national security. We are proud to partner with DoD, uniformed and civilian, in sustaining the deterrent through our shared commitment to technology, innovation, and science.†Secretary Carter and Secretary Moniz emphasized the investments DoD and DOE have partnered to make in the technology, people, and infrastructure that supports the nation's nuclear deterrence and security. Carter commended the departments' shared devotion to what he called the American approach,†where we recognize a problem and work to solve it. Because of the American approach you've led here and in the DoD-DOE partnership, you have helped ensure that millions and millions of our fellow countrymen can get up in the morning, go to school, go to work, live their lives, dream their dreams, they can give their children a better future…†Carter said. Secretary Moniz also emphasized that DOE-DoD symbiosis goes well beyond sustaining the deterrent: securing and eliminating nuclear materials that could fall into the hands of terrorists; shared responsibility for nuclear propulsion of aircraft carriers and submarines; national laboratory innovation supporting the broader nation security and intelligence communities. He also noted how the DOE's responsibility for clean energy innovation, energy infrastructure and global energy security support national security, as has been emphasized by military leaders. Secretary Moniz has served as Energy Secretary since May 2013. Prior to his nomination, he was the Cecil and Ida Green Professor of Physics and Engineering Systems at the Massachusetts Institute of Technology, where he also has served as head of the physics department and Bates Linear Accelerator Center; founder of the MIT Energy Initiative; and Director of the MIT Laboratory for Energy and the Environment. He also served as Under Secretary of Energy from 1997 until 2001, where his work included a review of nuclear weapons stewardship and negotiations over the disposition of Russian nuclear materials. He served from 1995 to 1997 as Associate Director for Science in the White House Office of Science and Technology Policy. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/25/secretary-of-defense-carter-presents-the-dod-distinguished-public-service-award-to-secretary-of-energy-moniz/ http://everythingshale.com/news/2016/november/25/secretary-of-defense-carter-presents-the-dod-distinguished-public-service-award-to-secretary-of-energy-moniz/ Fri, 25 November 2016 15:00:15 http://everythingshale.com/news/2016/november/24/iran-and-china-are-strengthening-their-military-ties/ Amid uncertainties about the incoming U.S. administration’s approach to the Middle East and the nuclear deal, Tehran and Beijing appear to be entering a new era in their strategic partnership, including the potential transfer of advanced weapon systems down the road. Last week, Chinese defense minister Chang Wanquan concluded a three-day trip to Tehran, the latest in a series of high-ranking bilateral military exchanges over the past two years. Previously, during a January visit by President Xi Jinping, the two countries signed a twenty-five-year strategic cooperation agreement that included a call for much closer defense and intelligence ties. The June appointment of Maj. Gen. Mohammad Hossein Bagheri as Iran’s Armed Forces General Staff chairman is expected to expedite that process. Military relations between the two countries date back to the early 1980s, but they went through a period of reduced cooperation as a result of international nuclear sanctions on Tehran. Today, they are once again poised to revive a relationship that could have considerable geopolitical implications for the region. The Chinese defense minister called the latest meetings a “turning point” in the strategic partnership, while Iran has continued to present itself as Beijing’s only reliable oil supplier. Regarding specific initiatives, defense officials reportedly discussed expanding China’s use of Iranian air bases and naval facilities in the Persian Gulf, ostensibly for training and logistical purposes. They also agreed to exchange their hands-on military experience, mentioning examples such as facing the U.S. military at sea and in the air. OTHER SIGNS OF COOPERATION Apart from last week’s meetings, rumors persist that Iran is interested in acquiring Chinese Chengdu J-10B third-generation fighter jets as well as airborne radar and avionic sets to equip its own future designs. Last year, Iranian air force commander Gen. Hassan Shah-Safi was warmly welcomed in China, where he toured several aircraft factories and air bases. Similarly, the Iranian unmanned aerial vehicle industry can learn a lot from China, as Beijing continues to unveil an array of increasingly capable drones. Tehran might seek Chinese help in jointly developing tactics such as “drone swarming” to add a new dimension to its asymmetrical way of warfare. Beijing could also help improve Iranian UAV guidance systems with satellite navigation and communication links. In October 2015, Iranian electronic defense firm SaIran signed an agreement with Chinese firms to begin using their BeiDou-2 satellite navigation system for military purposes. The system’s military-grade signals are more accurate than commercially available GPS services, so they could significantly improve Iran’s use of satellite navigation in its missiles, UAVs, and other hardware. POTENTIAL NAVAL, MISSILE, AND ARMOR ACQUISITIONS In October 2014, Iranian naval commander Adm. Habibollah Sayyari visited China to ask for help in overhauling and modernizing the Islamic Republic’s submarine and surface fleets. He also discussed possible purchases of a wide range of Chinese naval equipment, including frigates, submarines, and missiles. Through various public statements and actions, the Iranian navy has shown its desire to become a major “blue water” power in the Indian and Atlantic Oceans, and China can help meet that goal by offering intelligence and training in the short term, and modern vessels and weapons systems down the road — perhaps after UN military sanctions are lifted in late 2020, if not sooner (see the next section for more on these legal restrictions). Several existing Chinese systems would suit Iran’s need for a flexible navy capable of operating in both littoral and blue water, including the Type 052 destroyer, the C-28A corvette (armed with four C-802 antiship missiles and the HQ-7 surface-to-air missile system), the Type 054A frigate (which even Russia has considered buying), the Type 057 frigate (armed with state-of-the art weapons systems), the P-18 export frigate (with a point-defense missile system and four C-803 antiship missiles), and the missile-armed semi-stealth corvette built by Wuchang Shipyard. Tehran might also try to expand its antiaccess/area denial (A2AD) reach by obtaining China’s much-vaunted Type-022 stealth fast-attack missile catamarans, sometimes described as “carrier killers.” These cost-effective warships could enable Iran to perform more effective patrol missions at longer ranges for longer periods of time. In addition, notwithstanding current sanctions, China has a long history of cooperating with Iran on various antiship missile projects, covering ranges from 35 to over 300 kilometers. Such cooperation could bring Iran’s capabilities to a new level if Beijing transfers any of its later generations of supersonic missiles such as the CM-302 and CX-1 (which can reach 290 and 280 kilometers, respectively, and are designed‌ to target carrier battle groups with their advanced seekers) or the YJ-22 (the land-attack version of the C-802, with a 400 kilometer range). These weapons are ideal for denying access to the Persian Gulf. Iran recently spoke of fielding supersonic missiles for A2AD purposes, but it is not known to have developed such a capability itself. The Iranian navy could also use Chinese (and Russian) technologies to equip and modernize its own ship designs. Tehran tends to prefer self-sufficiency and domestic R&D in building up its fleet, but so far its domestically produced vessels have been based on outdated designs that lack advanced equipment such as effective multilayer air-defense systems. This has forced the navy to reuse old systems from retired ships. Given the expansion in Chinese cooperation and Tehran’s desire to sustain a viable shipbuilding industry, the Iranians could decide to abandon their recycled systems and look for modern Chinese hardware (e.g., the FL-3000N/HHQ-10 close-in air and missile defense system) to add more teeth to their warship designs. The Iranian navy has likewise been developing three different midsize submarines for many years, and frequent delays in their production could point to problems with systems integration and reliability. It might therefore seek to acquire customized Chinese submarines such as a Yuan-class vessel equipped with air-independent propulsion (AIP), a quieter system compared to the Russian-made Kilo-class submarines currently in Iran’s service. China offers an advanced yet cost-effective AIP-equipped Type 039A version of the Yuan for export, as well as the improved Type 039C and the smaller S20 (which Pakistan has sought to acquire). If Iran chooses to pursue the “strategic partnership model” outlined recently by Defense Minister Hossein Dehghan and General Staff chairman Bagheri, it could look to combine Russian single-hull submarine designs and Chinese AIP technology to optimize its own submarine development. Chinese submarines can also launch up to ten cruise missiles, which in Iran’s service could include the Soumar, a copy of the Russian Kh-55 with a theoretical range of 2,500 kilometers — assuming the national navy is able, and allowed, to use them on submarines. While it is by no means certain that Iran will be able to deploy the Soumar operationally anytime soon, such a development would give its navy a credible land-attack capability. Alternatively, Tehran might seek to arm its subs with the Chinese CM-708UNB antiship missile, which has a 290 kilometer range. Another area to watch is land warfare. Ties with Beijing could give Iran the opportunity to examine, purchase, or even assemble modern Chinese tank designs such as the MBT 2000 or the highly developed MBT 3000 (VT-4); this also applies to modern armored personnel carriers, which Iran has yet to develop indigenously. INTERNATIONAL OBSTACLES When UN Security Council Resolution 2231 was implemented in January, it required all member states to seek the council’s approval before selling any warships, combat aircraft, missile systems, or tanks to Iran for a period of five years. Once that period expires, there will be no restrictions on Iran’s purchase of military hardware from countries like China. In the meantime, Tehran hopes to hedge against outside interference by aligning itself more closely with a world power like China, which Iranians often perceive as a more reliable strategic partner than Russia. Iran has yet to be admitted to the Beijing-led Shanghai Cooperation Organization as a full member, so the deeper military cooperation that comes with membership remains just out of reach for now. But the recent high-level meetings with China suggest that may soon change. Moreover, expanding oil industry cooperation between the two countries could allow Iran to pay for major new weapons purchases with oil. CONCLUSION Recent reports in the semiofficial Iranian media outlet Fars News have emphasized Tehran’s strong interest in expanding its naval reach as far as the western expanses of the Atlantic Ocean. Yet its current equipment would hardly allow for a sustainable and meaningful presence there, so Iranian officials seem to be placing particularly high priority on expanding naval cooperation with China. As a result, one can expect increasing naval exchanges and joint maneuvers, and perhaps even future exchanges of temporary basing facilities. Iran also seems keen on creating a missile-firing submarine fleet — probably using Chinese help — in order to counter Israel’s expanding strategic submarine fleet. Yet unlike the high-profile Iranian arms deals with Russia, any such agreements with China can be expected to remain highly classified for some time to come. More broadly, while Tehran’s defense pact with Beijing has been presented as operationally focused, it could ultimately pave the way for more strategic cooperation. This includes Iranian acquisition of advanced weaponry from China after current restrictions are lifted in a few years, as well as upgrades to Iran’s existing systems, both of which would complement their joint training efforts and military maneuvers. To be sure, China can be expected to assume a more cautious stance than Russia, which has directly intervened in the region on behalf of Tehran’s Syrian client and is cooperating with Iran-aligned forces on the ground. Yet Beijing is more than willing to offer Iran broader strategic partnership, potent conventional weaponry, and new technologies. Together with Iran’s significant indigenous military industries, even limited Chinese assistance could substantially improve the Islamic Republic’s regional military posture in the medium to long term. Farzin Nadimi is a Washington-based analyst specializing in the security and defense affairs of Iran and the Persian Gulf region. Originally Posted on November 22, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/24/iran-and-china-are-strengthening-their-military-ties/ http://everythingshale.com/news/2016/november/24/iran-and-china-are-strengthening-their-military-ties/ Thu, 24 November 2016 15:00:35 http://everythingshale.com/news/2016/november/24/smart-connected-pipeline-setting-the-standard-for-success-for-the-oil-gas-industry/ Schneider Electric is forever forward-thinking. That means, implementing architecture that enhances control, safety, and performance is the foundation of our operations. Embracing the IT-OT convergence has become this foundation, abandoning archaic, cost-cutting measures for an innovative and forward-thinking model—optimized collaboration between people, processes and technology. Application of a Smart Connected Pipeline solution has curbed the chance of error and offered a competitive framework for our business, positioning Schneider Electric as an industry leader and setting the standard for success within the oil and gas industry. Oil and gas companies have struggled to use real-time operating data to improve functional and business capabilities due to a deluge of data. Schneider Electric provides the opportunity to invest in a Smart Connected Pipeline solution to rectify this data dilemma, bringing companies into the 21 st century. We understand integration breeds efficiency. So, by abandoning the antiquated and ineffective practice of isolated operations—transactional interactions that impede collaboration—Schneider Electric has sought consistent improvements and insights within integrated pipeline management. And, companies that have come to follow this model have benefitted. Alan Acquatella, vice president of major capital projects states, “More data means more efficiency. Better data means more opportunity for analysis.” Investing in a smart connected pipeline solution is an investment that stands to provide a return over many, many years. This type of purchase can provide the building blocks for faster innovation and achieving desired business outcomes long-term. Success is reliant on the integration between: Technology (to access data): Fund data management and analytics as a business case at the enterprise level. Strive to ensure availability of high-quality, actionable, trusted, and complete data. People: Build skills in advanced analytics and complement those capabilities with a culture of collaboration. Apply analytics-driven insights to management decision-making. Work with data scientists and the business to ensure that data analytics align with business objectives. Processes: Emphasize development of governance and performance measurement capabilities, internally or externally. Governance skills are critical to ensure proper deployment of data analytics. Also, create processes for information management and application development, along with information consumption. As business conditions continue to increase in complexity and competitiveness, oil and gas companies will be challenged to remain profitable and viable. New approaches involving collaboration between organizations and solutions providers can be a powerful approach to overcome these challenges. By establishing an integrative, smart connected pipeline strategy that provides exceptional operational and competitive advantages, Schneider Electric has proven the viability of this innovative model and our role as a thought leader within the oil and gas industry . For more information, click here .   The post Smart Connected Pipeline – Setting the Standard for Success for the Oil & Gas Industry appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/november/24/smart-connected-pipeline-setting-the-standard-for-success-for-the-oil-gas-industry/ http://everythingshale.com/news/2016/november/24/smart-connected-pipeline-setting-the-standard-for-success-for-the-oil-gas-industry/ Thu, 24 November 2016 05:43:12 http://everythingshale.com/news/2016/november/23/first-withdrawal-of-the-season-moves-prices-up/ Drillinginfo has acquired the assets, product lines and related services associated with Ponderosa Energy. Customers can now rely on a single partner for real-time, actionable intelligence and analytics and predictive support for investments in the industry, whether they are investing in exploration, production, buying, selling or trading. Learn more here . The EIA announced the first storage withdrawal of the season, which is about a week earlier than expected. A 2 Bcf withdrawal was reported for the week ending Nov. 18 compared to a range of forecasts between -1 to +15. The storage report is therefore bullish and the entire forward curve is up following the release. Prompt month (Dec16) is currently trading up 6 cents and back to the $3 level at $3.04/MMBtu, at time of writing. U.S. storage inventories are relatively unchanged week-on-week at 4.045 Tcf, which is 39 Bcf higher than this time last year and 241 Bcf higher than the 5-year average. Changes in weather patterns will continue to drive price volatility throughout the winter. Despite the current cold front we’re experiencing across most of the US, temperatures in the Midwest and Northeast are projected to go back to warmer-than-normal next week. This will cause next week’s storage withdrawal to be above last year, but fall short the week after. Price action next week will have the above information and is expected to leave prices relatively unchanged unless an updated forecast becomes available and reflects a significant change in weather temperatures for December and forward. http://everythingshale.com/news/2016/november/23/first-withdrawal-of-the-season-moves-prices-up/ http://everythingshale.com/news/2016/november/23/first-withdrawal-of-the-season-moves-prices-up/ Wed, 23 November 2016 18:14:53 http://everythingshale.com/news/2016/november/23/weekly-petroleum-stocks-112316/ Drillinginfo has acquired the assets, product lines and related services associated with Ponderosa Energy. Customers can now rely on a single partner for real-time, actionable intelligence and analytics and predictive support for investments in the industry, whether they are investing in exploration, production, buying, selling or trading. Learn more here . US crude oil stocks decreased by 1.3 MMBbl last week. Gasoline and distillate inventories increased by 2.3 MMBbl and 0.3 MMBbl respectively. Yesterday afternoon, API had reported a crude oil and distillate withdrawal of 1.28 MMBbl and 0.35 MMBbl respectively alongside a 2.68 MMBbl gasoline build. Analysts had expected builds of 1.0 MMBbl/d and 0.9 MMBbl/d in crude oil and gasoline stocks respectively. The most important number to keep an eye on, total petroleum inventories, posted a decrease of 0.1 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be up 9 MBbl/d from last week per EIA’s estimate. Imports were down 0.845 MMBbl/d last week to an average of 7.6 MMBbl/d. Refinery inputs averaged 16.4 MMBbl/d (271 MBbl/d more than last week), leading to a utilization rate of 90.8%. The petroleum stocks report is neutral as it came within expectations of API and analysts. Prompt month WTI prices were up following the report, but came down shortly after and currently trading at $47.93/Bbl. Crude oil prices rose at the beginning of the week with reports that OPEC was close to agreeing on the details of a cut. Crude oil gave back some of its gains on Tuesday amidst reports that Iran and Iraq were not on board with the proposed agreement. OPEC is said to be targeting a 4-4.5% cut from current output levels. Additionally, Libya and Nigeria have been kept exempt from the cuts, due to currently lower production caused by militant fighting and terrorist activity. However, the deal still hinges on Iran and Iraq agreeing to participate. Recent reports have suggested that Iran has been offered a deal to cap production at current levels, which would fall short of the 4-4.2 MMBbl/d production levels Iran has pledged to reach since the lifting of the sanctions. Iraq has also previously asked to be exempt from the quotas, as they defend that they need the revenues from oil sales to continue fighting ISIS. The market largely expects the announcement of a deal on November 30th, as the lack of one would destroy the credibility of OPEC. However, it remains to be seen if they can agree on quotas at the country level or if they will target a ceiling level for the whole cartel’s output. Any initial price gains from the announcement of an agreement are likely to be capped until the cartel proves that they can comply with their own quotas, as there have been “cheaters” in the past. Until the OPEC dilemma is resolved on November 30th, trade will remain volatile around the perceived likelihood of the deal and the members’ willingness to comply. Please find the updated DrillingInfo charts on the link below: Petroleum Stocks Chart http://everythingshale.com/news/2016/november/23/weekly-petroleum-stocks-112316/ http://everythingshale.com/news/2016/november/23/weekly-petroleum-stocks-112316/ Wed, 23 November 2016 17:42:55 http://everythingshale.com/news/2016/november/22/everybody-else-is-reading-this/ Goodyear Asks SCOTUS To Restrict Federal Judges’ Inherent Sanctions Power How Appealing With Trump, What Will Become Of Health IT Interoperability? MedCity News Bank Of America Customer? Be Careful With Uber Rides Dealbreaker   Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/22/everybody-else-is-reading-this/ http://everythingshale.com/news/2016/november/22/everybody-else-is-reading-this/ Tue, 22 November 2016 17:00:12 http://everythingshale.com/news/2016/november/22/lng-exports-strengthen-us-competitiveness-help-european-allies/ Two years ago, Jaroslav NeveroviÄ, then Lithuania's energy minister, told senators at an Energy and Natural Resources Committee hearing that his country and others in Europe were eager to see the United States ramp up exports of liquefied natural gas (LNG) , saying that U.S. LNG would bring needed diversity to Europe's energy supply. With legislation to streamline and expedite approvals for U.S. LNG export projects pending in Congress, the U.S. ambassadors of Lithuania, the Czech Republic, Estonia, Hungary, Latvia, Poland and Slovakia wrote to congressional leaders this week, urging action . From their letter to House Speaker Paul Ryan (letters also were sent to Senate Majority Leader Mitch McConnell, Senate Minority Leader Harry Reid and House Minority Leader Nancy Pelosi): We are pleased that liquefied natural gas (LNG) from the United States is now being exported from Louisiana and that the first U.S. LNG cargoes have already reached Europe. These exports result in greater liquidity to the global natural gas market and have the potential to provide diversity of sources, suppliers and routes thus to a greater energy security in our part of Europe, a region for long dominated by an external state­ controlled gas supplier, ready to use energy as a political weapon. U.S. LNG exports will also contribute to reducing vulnerability of the CEE (Central and Eastern European) countries. The ambassadors point out that the regulatory path remains complex in cases where licenses are sought to export LNG to non-Free Trade Agreement countries. They called legislative action to expedite LNG exports to America's European allies a timely and significant issue.†Indeed, it is. The Cold War left these states with a natural gas pipeline system dominated by the Soviet Union and now Russia, which in the past has used energy as a foreign policy weapon. The CEE countries have invested heavily in infrastructure to remedy the situation, building LNG terminals in Lithuania and Poland to allow LNG deliveries from any direction, including the United States. The key, though, is development of U.S. export infrastructure. The ambassadors' letter expresses the hope that bipartisan legislation can be completed in the current session of Congress: We are convinced that the U.S. LNG exports to CEE would be a game changer for the region. It would send a strong geopolitical signal, enhancing competition on the regional market, while at the same time decreasing dependence on the dominant gas supplier and thus increasing the energy security of the CEE. We've posted a number of times detailing the benefits to the United States of exporting domestic natural gas (most recently here and here ). These include bringing overseas wealth into this country via trade, economic growth associated with continued energy development and environmental progress as cleaner-burning natural gas comes into wider use and lowers carbon emissions around the world as has occurred in the U.S. As the world's No. 1 producer of oil and natural gas, the United States is well-positioned to be a leader in the global LNG market. Our energy renaissance is producing record volumes of natural gas that can amply supply the domestic market and the needs of friends overseas. Yet, opportunity in the global market isn't timeless or limitless. Other nations are working to claim market share, and policies are needed to strengthen U.S. competitiveness. While the U.S. has shipped a few cargos of LNG overseas, 30 applications for approval to export are pending before the U.S. Department of Energy , almost half of which were submitted in 2014 or earlier. There's bipartisan support in Congress to act to expedite this process, and the time for Congress to act is now. As the CEE ambassadors' letter to congressional leaders makes clear, much is at stake. By Mark Green  Originally posted November 16 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/22/lng-exports-strengthen-us-competitiveness-help-european-allies/ http://everythingshale.com/news/2016/november/22/lng-exports-strengthen-us-competitiveness-help-european-allies/ Tue, 22 November 2016 15:00:15 http://everythingshale.com/news/2016/november/22/gas-balancing-rollout-in-italy-and-spain-sees-liquidity-moving-in-opposite-direction/ On October 1 2016, new gas balancing schemes were rolled out in Italy and Spain to align the two countries’ gas hubs with European standards. Following the first month of implementation, liquidity seems to have been effected in different ways, with the Italian PSV hub seeing a boost in OTC spot trading and the Spanish PVB gas hub seeing volumes picking up on the official exchange, the MIGAS platform. New balancing scheme pushes OTC intraday volumes higher in Italy Traders polled by S&P Global Platts said the new balancing setting in Italy has boosted liquidity on the within-day OTC market — many participants seem to prefer balancing their positions OTC so far. Among other issues, participants pointed to a lack of integration between the balancing platforms run by GME (MGAS and PBGAS) with the main trading platforms used by traders. They also believe that the guarantee system required by GME is more expensive than the guarantees required by counterparties in OTC trading. As for the role of Snam , an Italy-based trader said “Snam [in its role as market maker on the balancing platforms] should take additional steps to enhance liquidity on the MI-GAS [intraday spot market] and on the MGP [storage balancing market],” referring to the lack of liquidity on those platforms. Snam is responsible for incentivizing participants to balance their portfolios in the new setting through the use of short-term standardized products trading and the use of balancing services. In the MGAS, the title products are traded in the MGP day-ahead gas market and the MI-GAS intraday gas market. On the new PB-GAS platform, the location product market, known as MPL, replaced the G-1 session while the storage product market, named MGS, replaced the G+1 session. Data released by GME provided evidence to support the shift of volumes from the exchange to OTC. Gas traded on Italy’s gas exchange totaled 2.2 TWh in October following the implementation of the new MGAS and PBGAS regimes. This resulted in a steep fall of 50% from October 2015 when 4.4 TWh was traded on the exchange, according to GME data. Nearly all of the volume traded in October were via the GME’s intraday spot market MI-GAS. In the new MGS storage market, 537 GWh were exchanged. Of this volume, 415 GWh were traded directly among PBGAS participants while Snam offered to sell 86 GWh and buy 36 GWh on the MGS market during October. The other balancing platform run by GME, the MPL location session, which replaced the G-1 platform, was never activated during October. In contrast, during the month of September on the G-1 market, 2.2 TWh of natural gas were exchanged, according to GME figures. Spain’s gas balancing regime yet to integrate the Portuguese gas hub In Spain, the new balancing rules were implemented by the Spanish TSO ENAGAS  on October 1 with the aim to align the Iberian gas hub to European standards and increase liquidity, with volumes since rising on the exchange. MIBGAS became the platform for Enagas to officially balance the gas system. Punto Virtual de Balance (PVB) participants now have new requirements that impose stronger penalties for imbalances. Furthermore, shippers will no longer enjoy the “shock absorber” of storage flexibility that was permitted in the previous system. Shippers will now rely on near real-time steering information provided by Enagas. The rollout of the new regime has also led to the official integration of Portugal into the system, a formality since both countries have been linked since 2006, when the PVB — previously known as AOC — was established. MIBGAS has operated as an exchange for gas in Spain and Portugal since December 2015 and has experienced higher volumes contracted. However, the lack of government in Spain is delaying the two gas hubs from taking further steps into integration, possibly limiting improved liquidity in both markets. Portugal still requires a resolution between the Portuguese and Spanish governments to be able to operate in MIBGAS. Until MIBGAS has the authority to publish Portuguese products, there will be a transitory phase where auctions will be held when the system needs to be balanced. These auctions will be performed by OMIP in Portugal, MIBGAS told Platts. In terms of liquidity, market participants surveyed said that they are utilizing MIBGAS more and more with most traders looking at MIBGAS prices to get a sense of spot prices. There is however a small premium of 10-20 euro cent to use MIBGAS compared to OTC trading so, depending on the volume needed, participants still trade OTC. Brokers have noticed the increase in liquidity also with the Iberian Gas hub, which is a broker group specializing in further dated contracts. They said although volumes in forward contracts are still at the same level as the previous year, they have noticed less activity in prompt contracts as these are being done in MIBGAS. Listen to Dalila Ouerghi and Mario Perez discuss the issues surrounding these new gas balancing regimes in the S&P Global Platts Energy Spotlight podcast: One month after the implementation of gas balancing schemes in Italy and Spain The post Gas balancing rollout in Italy and Spain sees liquidity moving in opposite direction appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/22/gas-balancing-rollout-in-italy-and-spain-sees-liquidity-moving-in-opposite-direction/ http://everythingshale.com/news/2016/november/22/gas-balancing-rollout-in-italy-and-spain-sees-liquidity-moving-in-opposite-direction/ Tue, 22 November 2016 12:39:09 http://everythingshale.com/news/2016/november/22/why-chinese-steel-output-is-up-despite-capacity-cuts/ With China’s crude steel output in the first ten months of 2016 up nearly one percent year on year, many have wondered aloud how to make sense of the data, especially as fresh claims of progress on supply-side structural reforms have recently emerged. According to the National Development and Reform Commission last week, the target to cull 45 million mt in steel capacity this year was achieved by the end of October. So why is steel production not receding? Do the effects of the capacity cuts need more time to be realized, or have we been treated to a belch of hot air by Beijing’s propaganda machine? A key to answering these questions lies perhaps in a piece of information recently unveiled, but that has gone relatively unnoticed: About 74% of the 45 million mt of targeted capacity were no longer in production to begin with, China Iron & Steel Association party secretary Liu Zhenjiang was reported by Economic Information Daily as saying at a recent seminar. Other Chinese media have meanwhile reported that actual capacity reductions this year will be closer to 70 million mt. While it wasn’t revealed how much of that comprised idled capacity, the impressive figure — close to half of the 150 million mt in total steel capacity that the nation is aiming to weed out over the 13th Five-Year Plan (2016-2020) — isn’t surprising. Provincial and local government officials stand a higher chance of getting promoted by exceeding targets, and the removal of capacity that had already been closed represents low-hanging fruit. Among the most prominent wins so far can be seen in the mega-relocation of ten steelmakers within Tangshan city’s Fengnan district to a coastal, greenfield site, that will see not only a net reduction of 4 million mt in capacity, but fulfil other aspects of supply-side reforms like industry consolidation and, likely, the use of more efficient and environmentally friendly technology. The formation of the world’s second-biggest steelmaker, Baowu Iron & Steel, from the merger of Baosteel Group and Wuhan Iron & Steel Group, and the immediate decision taken to drop the latter’s plans to build a 9 million mt/year works in Fangchenggang, Guangxi province, can be hailed as another instructive manifestation of the reforms. But the most telling reason why steel output hasn’t abated so far is likely strong production margins since the start of the year, which remain true for flat steel producers even after coking coal prices have quadrupled. Long steel producers, having made hay, are now only starting to call it a day by cutting output, as margins turn negative and the winter dulls demand. Capacity cut targets for 2017 have yet to be announced, although what has been stated is that they “will not be less” than this year’s. This should give some relief to the competitors of Chinese steel, with the caveat that even the full achievement of the 150 million mt of cuts would mean little if margins continue to incentivize production. In collaboration with Zhang Jing. The post Why Chinese steel output is up despite capacity cuts appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/22/why-chinese-steel-output-is-up-despite-capacity-cuts/ http://everythingshale.com/news/2016/november/22/why-chinese-steel-output-is-up-despite-capacity-cuts/ Tue, 22 November 2016 02:00:07 http://everythingshale.com/news/2016/november/21/the-week-ahead-higher-prices-expected-due-to-weather-and-opec-news/ Drillinginfo has acquired the assets, product lines and related services associated with Ponderosa Energy. Customers can now rely on a single partner for real-time, actionable intelligence and analytics and predictive support for investments in the industry, whether they are investing in exploration, production, buying, selling or trading. Learn more here. — CRUDE OIL • Inventory levels for crude oil increased by 5.3 MMBbl last week as reported by the EIA. The gasoline and distillate inventories increased 0.7 MMBbl and 0.3 MMBbl respectively. The higher than expected crude oil build was due to higher imports (up 981 MBbl/d) which was slightly offset by higher refinery runs (up 309 MBbl/d). The most important number to keep an eye on, total petroleum inventories, increased by 7.1 MMBbl, which erased a similar decline from the previous week. Overall, the report was bearish, as the increase in crude oil stocks was larger than expected and the growth in gasoline was unexpected. The news was overshadowed on Wednesday, however, as Russia said it expected an OPEC agreement shortly after the EIA release. • Significant news hit the market this week: 1) OPEC announced that their production increased 240 MBbl/d to 33.64 MMBbl/d according to secondary sources. Although this is the official number that OPEC uses when referring to their production levels, the numbers they collected through direct communication with members lists production at 34.61 MMBbl/d. This highlights just one of the many uphill battles that OPEC will face when setting and enforcing quotas. Members do not agree on each other’s’ production, meaning negotiations will start from different base production assumptions. 2) OPEC is proposing that Iran cap production at 3.92 MMBbl/d, which is lower than the 4.0-4.2 MMBbl/d production target that Iran has repeatedly voiced to the market. A deal is highly unlikely without Iran, as geopolitical rival Saudi Arabia has even threatened to increase production if Iran does not participate. 3) The data that IEA released the prior week showed that the ~250 MBbl/d average oversupply in Q3 grew in October as production grew 800 MBbl/d. IEA forecasts also showed an expected 1.2% year-over-year demand growth for 2017, which would be the lowest year-on-year growth rate since 2011. If OPEC can’t agree on or enforce quotas, the oversupply will last into the 2H2017. 4) China released data the prior week showing that imports fell to 6.8 MMBbl/d in October from a record 8.1 MMBbl/d in September. The decline was a function of lower imports into strategic reserves and by teapot refiners. As teapot refiners have reached or are near import quotas, the lower demand levels are expected to last through the end of the year. 5) The rise in the US Dollar this past week provided pressure on the crude trade. Yellen’s comment’s that an interest rate hike could happen soon sent the dollar to its highest level since 2003 against a basket of currencies. 6) Baker Hughes reported on Friday that the rig count increased by 20. The large increase indicates that producers are comfortable with comparatively lower breakeven thresholds (as a result of continued efficiencies), and likely placed hedges when prices reach the high-$40/Bbl to low-$50/Bbl range. Improved economics and hedge coverage will continue to bring additional rig activity back into the US unconventional plays. The US rig count is now at a level where production growth will resume. • Despite the increased rig count, and troubling signs with demand and supply, the bullish news overshadowed the bearish last week, and the market closed a dollar higher week-on-week. Price action took prices down below the September lows for a brief time before finding support and rallying up to the high end of the range. Prices bounced off the support level and the market was running higher before the bearish storage release, but Russia’s assertion that OPEC would succeed in cutting production prevented a slide and brought buyers into the market. The trade is still range bound with both the downside and upside being expanded slightly ($42.20-$46.58/Bbl WTI). Expect OPEC to dominate the news and shape trade until the OPEC meeting produces a verdict on the proposed cuts. NATURAL GAS • Total natural gas supply increased week-on-week by 200 MMcf/d driven by higher production in the Northeast. Dry gas production has recovered from October lows because Northeast basis recovered to an average of ~80 cents back from Henry, compared to $2.00 back in October. November to-date production is ~1 Bcf/d higher than October. Canadian imports were unchanged last week. • Demand for natural gas increased by 2.7 Bcf/d last week due to weather. Res/Com and Power had the largest gains, 2.0 and 0.4 Bcf/d, respectively. Weather forecasts for the upcoming week have dropped to near-normal and are expected to push demand up next week. • Although the storage report last week was at the midpoint of analyst’s projections, broader market consensus was expecting a slightly lower injection number and prices came down as a result. One last injection is expected this season in Wednesday’s report (early release due to Thanksgiving holiday). The market is currently anticipating an injection in the 10’s Bcf and similar size to last year’s build. • Prices started strong last week and held the gains by the end of the week despite the bearish storage report, showing a strong gain of $0.30 MMcf/d week-on-week. As previously discussed here, the fundamental forecasts have built in a negative bias to prices for the last three weeks and any variance to those expectations will be met with volatile trade. A significant source for the selling during the Oct and early Nov was a change in the position of the Managed Money participants as reported by the Commitment of Futures Traders report. From the Oct 18th report to the Nov 15th report, this group reduced the Long position by 56,000 contracts and increased their short positions by nearly 75,000 contracts. This flip represents nearly a 10% roll of total open interest. • Prices are expected to move higher this week as more normal seasonal temperatures move in and push demand higher. However, gains are expected to be capped in the short term as any increases in demand will be met by production growth and high storage inventories. http://everythingshale.com/news/2016/november/21/the-week-ahead-higher-prices-expected-due-to-weather-and-opec-news/ http://everythingshale.com/news/2016/november/21/the-week-ahead-higher-prices-expected-due-to-weather-and-opec-news/ Mon, 21 November 2016 17:34:00 http://everythingshale.com/news/2016/november/21/pace-securitizations-top-400m-in-november/ PACE projects are part of the surge of green bonds coming to the market. Property-assessed clean energy is growing at a formidable clip , with large securitizations coming in more regular succession. Ygrene, a leading provider of PACE financing, closed a $145 million private securitization on Tuesday and announced an AAA-rated $184 million public bond. Renew Financial, another PACE provider, closed its third securitization for $115 million earlier this month. PACE programs allow investments in water- and energy-efficiency retrofits and distributed renewable generation to be paid back through property taxes, which lowers the risk for both lenders and owners. PACE programs can potentially open up a far larger swath of the energy-efficiency market than traditional programs have been able to tap. The Ygrene public bond, which is labeled as a green bond, includes PACE projects at both homes and businesses in California and Florida. We saw exceptional demand for this deal, with both A and B notes being oversubscribed,†Rasool Alizadeh, senior director of capital markets at Ygrene, said in a statement. The diversity of our product offering and geographies helped attract a broad range of investors that we look forward to working with as we expand this asset class.†Ygrene expects quarterly securitizations starting next year. Renew Financial's securitization was also labeled a green bond and comes just a few weeks after Renew closed a $200 million revolving credit facility. The trend to label PACE securitizations as green bonds comes as the green bond market is exploding . Climate Bond Initiative has estimated there could be upward of $100 billion in green bonds issued this year across the globe. But with little regulation, investors are not always sure the bonds are being used for projects with a positive environmental impact. Because PACE is used for energy and efficiency improvements, it has positive environmental attributes and is an easier sell to investors who are trying to be diligent about their green bond investments. Residential PACE continues to be where most of the dollars are flowing, although commercial PACE is more widespread geographically. In September, Renovate America completed a $320 million securitization, also a designated green bond, for projects that are part of its HERO residential PACE program. The HERO program is still by far the largest residential PACE program in the U.S., concentrated largely in California. Florida is the next big market for residential PACE, with both Ygrene and Renovate America focusing efforts in the Sunshine State. Renovate America, for example, recently announced it would launch in Orlando in 2017. Beyond Florida, residential PACE is also operating in Missouri. Some states are waiting on the sidelines for even more guidance on residential PACE from the federal government before implementing programs, while California has forged ahead with its own consumer protection rules around PACE. The U.S. Department of Energy is expected to release updated PACE guidelines soon that may encourage more states to expand access to residential PACE. More than 30 states have passed commercial PACE legislation . Figure: U.S. PACE Program Deployment By Katherine Tweed Originally published on Greentech Media November 16, 2016 Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/21/pace-securitizations-top-400m-in-november/ http://everythingshale.com/news/2016/november/21/pace-securitizations-top-400m-in-november/ Mon, 21 November 2016 15:00:38 http://everythingshale.com/news/2016/november/21/end-of-downturn-at-hand-operators-behavior-suggests-so-fuel-for-thought/ The way US E&P operators are adding rigs, planning activity ramp-ups, preparing to raise capex and looking forward to renewed production growth in 2017, you’d be tempted to write finis to a harrowing two-year industry downturn. During third-quarter 2016 earnings calls in the last few weeks, oil operator after operator unveiled what became surprisingly repetitive near-term plans: stirring the production pot by slipping a rig or two into the field during the final months of this year, kicking up the capital budget modestly and then returning to production growth in 2017. “Third quarter results tell the story of good, old fashioned American ingenuity,” Robert W. Baird analyst Ethan Bellamy told S&P Global Platts. “Costs are down, productivity is up, and capital is flowing into the most productive regions.” CEOs certainly displayed sunnier dispositions on conference calls than a couple of quarters ago when the specter of what then was a recent period of $30/b oil was fresh in their minds. But now, with a new year looming, oil executives seemed energized by their victory over a low-priced oil world after two years of squeezing costs and efficiencies from oil fields and developing precise completion designs to extract still more oil and gas per well. So they appeared willing to open the purse strings a bit next year—and if oil prices cooperated, rev up the drilling machine and production spigot in the months to come. But beneath their show of confidence, oil executives appeared mindful of the sobering and ongoing volatility of oil prices. Most clearly conveyed that any stepped-up activity would be done prudently until price signals indicated otherwise. Larger operators in particular said higher prices of mid-$50s/b to $60/b were needed for next-stage growth. Paul Horsnell, head of commodities research for Standard Chartered Bank, noted industry still is not investing according to the oil price curve. Front-month WTI closed Friday at $45.69/b, while forward prices in June and December 2017 settled at $49.49/b, and $50.60/b, respectively. “On average, they are maybe planning on the basis of the curve minus at least $5” per barrel, Horsnell said. “So, not overly aggressive.” But even as the outlook for 2017 turns up, independent E&Ps as a group showed financial losses from July to September for the eighth straight quarter, he said. Despite losses, rig count growing While the losses were half that of three months before and only 15% of the loss in the same 2015 period, “it was another loss on top of a lot of other losses,” he said. Q3 results “show an industry that is behaving like survivors from a storm: very happy to be alive, but still facing the task of clearing up a lot of wreckage,” Horsnell added. While 153 oil rigs have been added in US fields during the last six months, and 19 in the last week alone, not all operators are necessarily planning production growth. Some are preparing for flat output next year. ConocoPhillips is eyeing flat to 2% growth in 2017 output while others, like Whiting Petroleum and Murphy, could hold next year’s output flat with Q4 2016. On the other hand, several operators have forecasted double-digit output growth, notably from the Permian Basin in West Texas and New Mexico: Pioneer Natural Resources expects 13% to 17% production increase next year that includes 23% to 27% oil output growth. Concho Resources sees 20% per year total production growth for 2017-2019 and Diamondback Energy eyes more than 30% output growth. To meet those estimates in the Permian Basin, operators added 50 rigs in Q3 and so far in Q4 have added another 26 to a total of 229 rigs, nearly 100 more than all other major US shale plays combined. Although the EIA has forecasted US oil production down 110,000 b/d or 1.2% for 2017 year over year, the agency “may be underestimating the capital efficiency being realized by US E&Ps, UBS analyst Bill Featherston said in a recent investor note. And that could potentially “prolong the oil price recovery or lower the medium-term normalized oil price.” UBS’ own oil production model, based on EIA data, currently calls for 2017 volumes to be down roughly 340,000 b/d year over year or 4%, and 2018 output up around 85,000 b/d or 1% year on year. While oilfield service and equipment providers recently cautioned they would likely soon take back some of the 15% to 30% or more in price concessions granted to oil companies early in 2015, this may not happen until late next year or possibly even 2018, Robert W. Baird analyst Dan Katzenberg said. The post End of downturn at hand? Operators’ behavior suggests so: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/november/21/end-of-downturn-at-hand-operators-behavior-suggests-so-fuel-for-thought/ http://everythingshale.com/news/2016/november/21/end-of-downturn-at-hand-operators-behavior-suggests-so-fuel-for-thought/ Mon, 21 November 2016 04:51:23 http://everythingshale.com/news/2016/november/18/how-edf-and-google-are-mapping-a-cleaner-more-efficient-energy-future-for-pennsylvania/ EDF and Google have released new interactive maps that show Pittsburgh residents just how much methane may be escaping from city pipelines. Methane is the main component of natural gas. Millions of families across Pennsylvania and the country depend on it to heat homes and prepare their dinners. But when leaked into the atmosphere, it can wreak havoc on our climate , represent millions of dollars' worth of wasted American energy, and pose serious risks to public health and safety. That's why we spent the past year working with Peoples Gas in Pittsburgh to use Google Street View mapping cars specially equipped with state-of-the-art methane sensors to determine how many pipeline leaks there are, how much methane is leaking, and where these leaks are located. Snapshot of natural gas leaks in Pittsburgh, PA CLICK TO TWEET Fixing hazardous gas leaks has long been a requirement for utility companies, but countless other leaks that don't pose an immediate risk can, and often do, go unrepaired for long stretches of time. And until recently, it has been hard to measure the leak problem on a large scale, or to use leak information to prioritize upgrades that deliver the biggest bang for the buck. This data helps them do just that, and in fact, some states are mandating  that this methodology be used to help develop data to help address public safety and climate concerns. A growing body of scientific research makes it clear that methane emissions are a problem across the entire natural gas supply chain, from the moment the gas is pulled from the well, all the way to the local pipes and gas meters that deliver gas to homes and businesses. And this is largely why Governor Tom Wolf has made controlling methane from the state's existing oil and gas infrastructure one of his key priorities . Why Pennsylvania is Tackling Methane Pollution Methane is responsible for about a quarter of today's global warming. It's also a public health risk. When it leaks from well pads and other upstream facilities (before it gets to the local pipeline) it can frequently escape with other pollutants that can exacerbate respiratory illnesses,  like asthma, for people who live, work and play near such facilities. Nearly one and a half million Pennsylvanians, about 12.5% of the state's total population, are affected by asthma and, therefore, are particularly vulnerable to pollution from oil and gas operations.  And recent polls have shown that the majority of Pennsylvanians support common-sense rules for methane pollution. Because methane is the main ingredient of natural gas, energy companies, utilities and regulators have a vested interest in keeping a valuable American energy resource out of the atmosphere and in the pipes. Cost-effective technologies like those used in our methane mapping project are already being used with great success to help companies capture and control wasted methane. In the wake of this newly released data, Gov. Wolf has indicated that his administration will soon release new regulatory proposals that will require oil and gas companies to use these leading methane capture technologies on the more than 100,000 active wells, compressors, and processing stations across the state. Take Action:  Thank Governor Wolf for his commitment to tackle methane As the second-largest natural gas producing state in the nation, Pennsylvania must rise to the challenge of safe and sensible energy development.  Policy that requires operators and utilities to maintain functioning and efficient equipment will help us meet that challenge and ensure that impacted communities in Pennsylvania are protected. By Andrew Williams  Originally Published on November 16, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX Web 2.0 brought greater connectivity, faster communication and a global reach. Exploiting these facets, crowdsourcing and open innovation broke through as an alternative way for organizations to seek results; a method to facilitate connections with globally diverse actors and present problems to those with the knowledge to make a difference. InnoCentive were at the forefront… Keep reading → In “The Massive Potential of Investing in STEM Education,” learn how science, technology, engineering and math education generates long-term American economic benefits. In “Educating the Next Generation of STEM Workers,” learn how American students are getting the training they need to meet the challenges of the future. In the final video, a panel of thought… Keep reading → http://everythingshale.com/news/2016/november/18/how-edf-and-google-are-mapping-a-cleaner-more-efficient-energy-future-for-pennsylvania/ http://everythingshale.com/news/2016/november/18/how-edf-and-google-are-mapping-a-cleaner-more-efficient-energy-future-for-pennsylvania/ Fri, 18 November 2016 15:00:37 http://everythingshale.com/news/2016/november/17/weekly-gas-storage-report-111716/ Drillinginfo has acquired the assets, product lines and related services associated with Ponderosa Energy. Customers can now rely on a single partner for real-time, actionable intelligence and analytics and predictive support for investments in the industry, whether they are investing in exploration, production, buying, selling or trading. Learn more here . The EIA announced a 30 Bcf injection for the week ended Nov. 4, which was in line with average market expectations. The full range of forecasts ahead of the release was +24 to 43. The storage report is bearish as prices continue its downward trend. Prompt month (Dec16) is currently trading down 8 cents at $2.685/MMBtu, as of this of writing. The Dec contract has lost almost $1/MMBtu in the last 3 weeks as mild temperatures continue to be in the forecast. U.S. storage inventories have reached nearly 4.05 Tcf, about 50 Bcf higher than this time last year, and are expected to post another increase next week (although smaller). The first withdrawal of the season is currently expected for the week of November 25. Weak weather continues to drive price volatility. Today’s NOAA forecast indicates warmer-than-normal temperatures are expected for December across California, the Southwest, and the Northeast, but normal temps in the remainder of the country. The three month outlook points to warmer-than-normal temperatures across the whole southern half of the US, but normal temps in northern half. It’s still early to give up on winter demand, consider that even a mild winter doesn’t mean overall lower demand as LNG and Mexican exports are running at peak levels. On the supply side, dry gas production and Canadian imports have responded to the lower demand levels seen so far. Fundamentals: Supply: Dry Gas is up 1 Bcf/d in Nov TD from Oct levels. The increases are due to higher demand at times in the Northeast, expansions coming online (DTI Clarington Nov1, Gulf Markets Oct) and a rebound from October from price driven shut-ins. Most of the 1 Bcf/d gains are in PA, specifically Transco and TETCO. TGP and DTI also posted smaller gains. Northeast basis has recovered; DTI South, TGP Z4 Marcellus and Leidy are at -70 cents in Nov compared to -$2.00 is Oct. Demand: Res/Com was 3 Bcf/d lower in Oct (2016 vs 2015). Nov TD is 3.7 Bcf/d lower. The trend looks like some cold is coming, but not too clear yet. LNG exports (Sabine) have been strong averaging nearly 1.6 Bcf/d over the past week. Looking ahead, storage inventories are projected to end the winter season near 2 Tcf, this level is higher than the 5-year average, but lower than the 5-year max therefore, prices are projected to increase from current levels seen in the forward curve. In the meantime, prices will continue to trade on weather projections. http://everythingshale.com/news/2016/november/17/weekly-gas-storage-report-111716/ http://everythingshale.com/news/2016/november/17/weekly-gas-storage-report-111716/ Thu, 17 November 2016 21:41:06 http://everythingshale.com/news/2016/november/16/weekly-petroleum-stocks-111616/ Drillinginfo has acquired the assets, product lines and related services associated with Ponderosa Energy. Customers can now rely on a single partner for real-time, actionable intelligence and analytics and predictive support for investments in the industry, whether they are investing in exploration, production, buying, selling or trading. Learn more here . US crude oil stocks increased by 5.3 MMBbl last week. Gasoline and distillate inventories increased by 0.7 MMBbl and 0.3 MMBbl respectively. Yesterday afternoon, API had reported a crude oil and distillate build of 3.6 MMBbl and 3.0 MMBbl respectively. Analysts had expected a 1.5 MMBbl/d increase in crude oil stocks, according to a Reuters survey. The most important number to keep an eye on, total petroleum inventories, posted an increase of 7.1 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below. US production was estimated to be down 11 MBbl/d from last week per EIA’s estimate. Imports were up 0.981 MMBbl/d last week to an average of 8.4 MMBbl/d. Refinery inputs averaged 16.1 MMBbl/d (309 MBbl/d more than last week), leading to a utilization rate of 89.2%. The petroleum stocks report is bearish, with crude oil posting a larger build than that expected by analysts alongside builds in both gasoline and diesel inventories. During refinery maintenance season, although crude oil stocks are expected to grow, product inventories are expected to post withdrawals. The large increase in total petroleum stocks this week has nullified last week’s withdrawal. Despite the inventory build, prompt month WTI prices are up $0.46/Bbl following the report, trading at $46.27/Bbl at the time of writing. Crude oil prices recovered from continued declines yesterday as the market reacted to the OPEC secretary general traveling to member nations to discuss details of the proposed supply cut. Additionally, crude reversed much of the declines immediately following the stockpile data today after Russia said it believes an OPEC agreement is likely. Much of the bounce in crude oil prices for the last couple of days can be attributed to short covering ahead of a very uncertain two weeks leading up to the official OPEC meeting. As discussed in this space before, OPEC continues to face an uphill battle in assigning and enforcing quotas. The latest news diminishing the possibility of a successful cut came last Friday when OPEC announced that October production grew 240 MBbl/d from the previous month to 33.64 MMBbl, making the 32.5-33.0 MMBbl/d production target harder to achieve. The IEA released their latest data Thursday, showing that supply increased by 800 MBbl/d in October, leading them to believe that the oversupply will now last well into 2017 if OPEC fails to act. Crude oil demand indicators have been bearish as well with last week’s Chinese data showing that imports in October fell to 6.8 MMBbl/d in October, down from 8.1 MMBbl/d the prior month. Chinese demand is suffering from a slowdown in imports into strategic reserve and teapot refiners reaching import quotas. Due to the slowdown in approvals for additional import quotas for teapot refiners, the lower demand is expected to persist through the end of the year. The dollar will continue to play a role in the future of crude oil prices as the market re-evaluates the impact of a Trump victory. Thursday will be an important day for the direction of the dollar, as Yellen will appear before the Congressional Joint Economic Committee and the market looks for indicators regarding the status of a December interest rate hike. Expect WTI prices to react to the perceived likelihood of an OPEC production cut and the value of the dollar in the short-term. In terms of supply and demand fundamentals, without the OPEC cut, the world remains oversupplied and price gains will be limited by the growth potential of the US at WTI prices between $50-$55/Bbl. Please find the updated DrillingInfo charts on the link below: Petroleum Stocks Chart http://everythingshale.com/news/2016/november/16/weekly-petroleum-stocks-111616/ http://everythingshale.com/news/2016/november/16/weekly-petroleum-stocks-111616/ Wed, 16 November 2016 20:28:54 http://everythingshale.com/news/2016/november/16/virtual-reality-step-into-the-future-of-plant-crew-training/ Most likely you already know that Virtual Reality (VR) and Augmented Reality (AR) are rapidly evolving and growing technologies.  They utilize the latest high powered computers and graphics cards to simulate real or imaginary environments and situations with a high degree of realism and interactivity. This is great for gaming and other fun applications, but did you also know that it’s already being adopted broadly by the process and manufacturing industries to bring value to the workplace? Virtual Reality has also been applied in a wide range of other areas  – like assisting in the visualization of complex data, robot control and remote operation of equipment.  It’s also extremely impactful in virtual prototyping and design, HAZOP analysis and most importantly — plant crew training . The success of those applications has relied heavily on a realistic virtual environment which can today be created in a very cost effective manner. Plant Crew Training Today, Gamers (adults and kids) spend time playing their 3D games, and after a period of time become familiar with all the characters of the game.  They learn how they should interact with these characters and repeatedly navigate the layout of the virtual environment until they know their way around.  And they learn how to “win” by successfully performing whatever tasks are set by the game designers. And also today, the process industries are using gaming technologies to create Virtual Reality replicas of real world production facilities. This virtual world is then being used as an Immersive Training Simulator (ITS),  which allows field operators to interact with the virtual world using game controllers and 3D headsets or televisions.  It is similar to how a Control Room Operator interacts with an Operator Training Simulator through the trainee control panel or console. Some key differences between “games” and industrial applications include: the environment where the trainee “plays” is the actual plant the characters are their colleagues in the field and the control room staff, and their tasks to “win” are standard and non-routine operating procedures Schneider Electric has integrated their Immersive Training Simulator technology, EYESIM , with their Operator Training Simulator  (OTS) technology, DYNSIM, to create an environment that facilitates entire plant crew training in a realistic manner, yet in a completely safe environment. The entire plant crew can perform all the Standard Operating Procedures required to startup or shutdown a plant include operations by the panel operator and manual operations on field devices (e.g. opening manual valve) by the field operations staff. These actions must be coordinated and executed in the correct sequence and in a timely manner. The integrated OTS and ITS allows the crew to work together and step through all the procedures. Practice, Practice, Practice Entire plant crews, some operating the OTS control panel and others out in the Virtual field must communicate and cooperate in order to execute a flawless startup or shutdown. They won’t get it right the first time, nor the second time, but the consequences of a team’s correct and incorrect decisions are sent immediately back to the trainees — giving them the opportunity to directly learn from their mistakes. They can practice, practice and practice until they are nearly perfect and the entire startup procedure become second nature for the entire plant crew before they undertake it for real, in the plant. Industries such as oil and gas , refining and power companies must institutionalize their workforce knowledge in efficient and effective ways. Leveraging VR models and OTS to improve time-to-competency in critical areas such as safety and environment protection systems is a must-do.  It is not simply ‘just an idea’ if a company wants to achieve its goals of true operational excellence. KOC Trains Successful Operators Take a look at how one company has embraced this progressive VR technology to solve problems, maximize its resources and improve operations.  Kuwait Oil Company (KOC) deployed an integrated operator and Immersive Training Simulator from SimSci by Schneider Electric to achieve operational excellence at their facility.  Watch the video now . Lifecycle Management After this fourth blog, in a series of five, I hope that a very clear picture is developing in your mind about the many benefits can be realized through the use of dynamic simulation throughout the process lifecycle. Savings can be realized early in the design phase of a project with capital and operating cost optimization. Further savings can be realized by pre-commissioning the plant controls thereby minimizing live plant commissioning time and allowing your company to start producing revenue and profit sooner. Operating plants are then safer, and more profitable because the control room staff have been efficiently trained and are now operating at a higher level of competency. This fourth blog has gone outside the control room to show how contemporary technology (virtual reality training) can benefit control room and field operations staff enabling entire plant crew training. Please read the next and final blog in the series to learn how dynamic simulation can be applied at every level of the enterprise through the use of scenario based e-learning initiatives enabled by the SimSci Training Academy.  If this is the first blog you are reading in the series, I would recommend taking a look back at the previous blogs beginning with: Blog #1: What Good is the Eiffel Tower in the Middle of your Refinery? Blog #2:  Controls Pre-commissioning Is Like Checking your Parachute Before Jumping…A Very Wise Decision. Blog #3:  To Err is Human, to Have the Safest Operators is Divine – OTS If you are interested in learning more about Workforce Optimization solutions, including operator training simulators and EYESIM for you and your crew, download our free whitepaper or contact us today!     The post Virtual Reality – Step Into the Future of Plant Crew Training appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/november/16/virtual-reality-step-into-the-future-of-plant-crew-training/ http://everythingshale.com/news/2016/november/16/virtual-reality-step-into-the-future-of-plant-crew-training/ Wed, 16 November 2016 07:43:04 http://everythingshale.com/news/2016/november/10/eam-for-the-iiot-age/ With the growth of asset-related data available through the Industrial Internet of Things (IIoT) and the complexity that comes with sifting through that data, organizations are faced with new operational challenges and opportunities for improvements. Chief among the challenges is the management of asset maintenance as industrial organizations typically manage hundreds of thousands of assets. Implementing efficient maintenance prioritization and effective work process management across multiple sites presents a major hurdle. The technology and know-how is available today to help drive profitability across all industrial assets. Success in this area requires that companies break from traditional perspectives and create a cooperative and collaborative environment, underpinned by the appropriate measures of performance and enabled by real time technology. Enterprises seeking a means to leverage the IIoT for enhanced asset performance should evaluate their current Enterprise Asset Management (EAM) solution. The influx of data means that a simple EAM solution that automates basic maintenance tasks, while necessary, is no longer sufficient. The new breed of EAM is extensible, allowing organizations to tailor their solution to specific business needs. Configurable EAM solutions allow companies to design user experiences for particular roles. This means the solution can serve the needs of employees across the decision-making chain, from the plant floor to the executive suite. Remote and mobile access capabilities are also critical. With these capabilities employees are empowered to make timely and informed decisions, no matter where they are. Organizations evaluating their Enterprise Asset Management needs should be sure to consider this and choose a reliable vendor with a track record of success.   Role-Based EAM Schneider Electric’s Avantis.PRO is a comprehensive EAM solution for the IIoT age and a key component of our Enterprise APM platform. Avantis.PRO provides the basics of maintenance management, MRO inventory management and complete procurement capability for asset intensive industries. In addition, our solution is fully extensible and configurable with remote and mobile access capabilities, allowing you to optimally leverage the IIoT to enhance asset performance. With 35 years of experience globally, our proven deployment method has repeatedly demonstrated the ability to drive optimal collaboration of people, processes and equipment across the enterprise. Every decision you make is dependent on the quality of information available to you. While most EAM offerings are capable of capturing vast amounts of data, users often find it difficult to access and interpret this data. Schneider Electric’s Avantis.PRO EAM suite provides the customer experience to make informed business decisions and manage all of your assets with confidence. Our industry standard architecture transforms data into information you can use in real time, quickly and easily, providing true asset intelligence. To learn more check out an on-demand webinar hosted by PennEnergy focusing on how Associated Electric Cooperative Inc. increased asset reliability . In this webinar you will see how Avantis.PRO has enabled AECI to improve their Preventive Maintenance efficiency. You will also hear from Schneider Electric on how to maximize economic return on assets with a fully integrated and comprehensive Enterprise APM platform. For more information on Avantis.PRO Enterprise Asset Management suite and Schneider Electric’s comprehensive Enterprise APM solution, visit http://software.schneider-electric.com/eapm. The post EAM for the IIoT Age appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/november/10/eam-for-the-iiot-age/ http://everythingshale.com/news/2016/november/10/eam-for-the-iiot-age/ Thu, 10 November 2016 17:45:14 http://everythingshale.com/news/2016/november/08/royalty-owners-in-oil-and-gas-due-diligence-front-and-center/ Whenever we need to get home repairs—roof, driveway, plumbing—we ALL shop around to find the best contractor at the best price to do the work. Royalty owners should do the same. A recent working paper published by the Federal Reserve Bank-Kansas City titled “ Capturing Rents from Natural Resource Abundance: Private Royalties from U.S. Onshore Oil and Gas production (Jason Brown –Federal Reserve Bank-Kansas City, Dr. Timothy Fitzgerald-Texas Tech University, Dr. Jeremy G. Weber-University of Pittsburgh) used over 1.5 million lease records obtained from DrillingInfo to study the pass -through of financial benefits to royalty owners in resource plays. It made me think of the time when I was travelling from a Utica conference in Columbus OH to Pittsburgh and I stopped at a McDonald’s in Washington PA. As I walked in there were two good ol’ boys jawing at each other, and the conversation went something like this: Good ol’ boy #1:” You got your draft yet? Shoulda paid you by now , since you only getting’ $300/acre..” Good ol’ boy #2: “May be, but I got that sweet 18% royalty….what’d YOU get, fool?” Good ol’boy#1: “Crap, I only got 16% but I beat your$300/acre by $200/acre more!” Good ol’bopy#2: “Say what??” And therein lies the crux of the matter….especially given the authors’ conclusion that: “Thus, mineral owners benefit from resource abundance primarily through greater production, not by negotiating better lease terms from extraction firms.” The value of producing minerals is determined by many factors , not just by bonus, or even royalty. So we’re going to look at some of the due diligence—the “shopping around”—that royalty owners should perform when they are making their decision to lease. 1. Are you actually going to get iron on the ground? I have a friend who has family minerals in West Texas who was approached by two separate outfits that wanted to lease her 120 acres. One group was offering about $200/acre more than the other; the proposed royalty burden was the same. When I used DrillingInfo to check permit and completion activity and production results for the company offering $200/acre more, I found no drilling history in Texas. Nada, bupkis, zilch. So it was pretty obvious that they were leasing to flip to somebody that might drill. The other company had no West Texas experience, minimal drilling and minimal completions activity, meager production history, and lots of dry holes. Not a great resume for efficiently executing a drilling program that would include her minerals. So she waited 6 months before leasing to an operator with a better track record. If, as a mineral owner, you lease to someone who’s going to flip your acreage, you may be waiting an extra year or two for your acreage to get drilled. Suppose that the type curve for your area indicates that in the first two years of production you should expect 150,000 barrels of produced oil. At $45/bbl and a 20% royalty, that’s $1,350,000 in royalty payments. If you didn’t have to wait for it, that money could be returning 3-5%/yr—enough to pay for a couple years of college, some great bass boats, or the beginnings of a trust fund for the kids. 2. What operator extracts maximum value from your minerals? No one is great at EVERYTHING they do. Companies that want to lease your minerals are no different. An operator who is great in producing deep Gulf Coast reservoirs may struggle to find the right mix of interpretation and completion tools in the Bakken. Or in the Marcellus. Or name your play/basin. Fortunately we have tools that can help identify the best performers, the group of companies that you would like to lease to because they extract the most oil and gas. For example, let’s look at the Marcellus. This graphic shows all the operators in the Marcellus. The red vertical line represents the median BOE produced by all operators. As a mineral owner who is being approached to lease your minerals, you would be far better served by leasing to the companies that are doing well (represented by the green circles), especially the companies with a fair number of wells to their credit (bigger circles). Source: DI Analytics Grading and Best Practices Even better would be to lease to an operator that has shown a history of quick adaptation to the geology of the area; they learn from their previous work and show progressively better results. Say your acreage in the PA Marcellus is located at the blue turquoise dot. Source: DI Analytics Grading and Best Practices You can use the DI analytics creaming curve display to determine who is learning their lessons the fastest. An operator that is adding proportionally more production with each succeeding well will have a more vertical curve. Source: DI Analytics Grading and Best Practices As a mineral owner , you should prefer to do “business” with the operator represented by the blue curve because they’ve shown marked improvement in boosting their production, and they’ve done it while drilling in a number of locales. What Operators are getting good results? This is THE crucial part of the value equation. If a mineral owner is considering two valid, comparable leasing offers, she/he should compare the type curves for each company to determine who will probably deliver the best production results. So given the choice between the type curve of Operator A: Source: DI Production Workspace Or the type curve from Operator B: Source: DI Production Workspace a lessor should prefer Operator A as a lessee, assuming that Operator A has drilled wells in the area of the lessor’s minerals. What Price should I expect? Mineral owners should also account for operator sales pricing differentials. We’ve commented before on the dangers of using a media- sourced WTI price as a proxy for well head prices. Not only because different plays have different oils with different API gravities—and therefore different prices—but even within a play there can be meaningful differences in wellhead prices. For example, mineral owners in Texas can use the MarketView feature in DI Classic to search for prices within a range, bubble the wells by wellhead price, and then see them on a map Source: DI Classic (Market View) The range of pricing in this area is $39.39-$44.16. The royalty proceeds from a well that has produced 100,000 bbl with a sale price of $39.39/bbl will leave nearly $500,000 on the table compared to a price of 44.16!! How do I model my royalty cash flow? I once looked at an oil and gas deal for a friend. The promoters’ deal structure was horribly punitive for investors, and key to the awfulness of the deal was the use of initial potential flow rates in the calculation of future production rates and therefore potential reserves. I would guess that some, but not all, mineral owners are aware of the decline behavior of resource plays. I suspect that many will be relying on the “typical” well rule of thumb—in other words the typical well in the Karnes county Eagleford produces X, or the “typical well” in the SCOOP play produces Y. This graph of Bone Spring production for wells with first production 8/1/2015-present illustrates the fallacy of the “typical well” Knowing EUR (Estimated Ultimate Recoveries) for the wells producing from your minerals is critically important in being able to responsibly estimate future production—and therefore cash flow. For example, one of the wells in the group has produced about 60,000 barrels of oil in 11 months. It’s most recent production was just over 170 BOPD. How much more production can the mineral owner count on production from this well? Using Probabilistic Decline curve modeling in Production Workspace, the EUR for this well at P90 level of confidence is 106,751. So the mineral owner can expect the operator to produce an additional 48,000+ barrels of oil before abandonment—or expected added cash of about $400,000(assuming $45/bbl and 20% royalty) Understandably, bonus payments and royalty rates are often the sole factors that mineral owners consider when leasing, but maximizing the value of that lease is a complex function of variables that too often are not considered when choosing a lessee! http://everythingshale.com/news/2016/november/08/royalty-owners-in-oil-and-gas-due-diligence-front-and-center/ http://everythingshale.com/news/2016/november/08/royalty-owners-in-oil-and-gas-due-diligence-front-and-center/ Tue, 08 November 2016 20:00:35 http://everythingshale.com/news/2016/november/04/us-biodiesel-industry-again-waiting-on-government-largesse/ The higher cost of biodiesel compared with petroleum-based diesel fuel, especially in the third year of low global crude oil prices, requires a bridge to incentivize demand, and for several years the biodiesel industry in the United States has had those incentives amid multiple government programs. Indeed, the US biodiesel industry ratcheted up production from 20 million gallons in 2003 to 2.1 billion gallons in 2015, according to the National Biodiesel Board, with an increasing amount of output, 24.5% of the 2015 total, renewable diesel. NBB, the industry’s national trade organization also reports 2.1 billion gallons of biodiesel was used in the United States in 2015. The US biodiesel industry is an exceptional growth story, but also a challenging one that has seen a large number of bankruptcies, and frustrated traders too, when federal programs lapse or lack clear direction on how they will be implemented. These waiting games have pushed otherwise promising companies that lack protracted financial durability out of business or into distressed sales. Indeed, the industry continues to consolidate that defines its maturing status as much as it demonstrates the risk in government dependence. In early November, and deep in the shadows of an extraordinarily contentious US presidential race, the US biodiesel industry awaits the finalized mandate for renewable fuel demand for 2017, and the renewal of a tax incentive to encourage blending. Even as clarity is sought on these two programs, a stream of news releases from the US Department of Justice highlights the fraud seemingly endemic in government programs, and so frequently twinned with unintended consequences. The US Environmental Protection Agency appears to be on target in meeting its end of November deadline in issuing the volume obligation for renewable fuels under the Renewable Fuel Standard for 2017, having submitted their finalized Renewable Volume Obligation to the White House Office of Management and Budget in mid-October. OMB reviews such government diktats to ensure conformity with the administration’s goals and policies. The law establishing the current mandate, which is known as RFS2, lists the volume of renewables obligated parties must use every year, which vary across several nested categories of renewables, and increase annually through 2022. However, the EPA, the administrator of the RFS, must review the market to ensure there will be enough supply to meet the mandate, and that pushing this supply into the market doesn’t cause serious harm to the economy or environment. The legislated mandate for 2017 is that 24.0 billion gallons of renewables in five categories of varying quantities are used in lieu of petroleum-based products, although the EPA proposal released in the spring at 18.8 billion gallons is well below the target due to an inadequate supply of cellulosic fuels and limited space in the gasoline pool based on current fuel specifications, auto manufacturer restrictions and consumer choice. Of that 18.8 billion gallons, biomass-based diesel fuel accounts for 2.0 billion gallons, with biodiesel also able to satisfy the advanced biofuel mandate proposed for 2017 at 1.68 billion gallons. Oil refiners and importers must meet their RVO, whether through blending or in buying a compliance credit in the market known as a Renewable Identification Number. RINs vary in inherent value based on the renewable they were generated by, with D4 RINs satisfying the biomass-based diesel nested category trading over $1 gallon from late September through the full month of October. A finalized RVO above the proposal would likely trigger a higher RIN value in response in December, with RIN valuations seen climbing in 2017 as obligated parties struggle to squeeze more ethanol into the US gasoline pool. The RIN is a critical component in a producer’s income stream. Since a RIN can be separated from the renewable as it moves through the supply chain and sold in an open market, speculators have done the math and have squeezed RIN prices higher, knowing the RIN market will continue to tighten. There’s also been a considerable amount of fraud around the RIN program that have caused harm to obligated parties amid the EPA’s buyer beware policy. Doug Parker, president of E&W Strategies and a former Director of EPA’s Criminal Investigation Division who oversaw investigations into the Deepwater Horizon disaster and Volkswagen’s defeat device fraud case among others, said current RFS-related fraud cases reflect $271 million in documented fraud and another $71 million in seizures of illicit profits. “In my experience this represents a fraction of the actual overall fraud impact, and significantly larger losses will be formally identified in upcoming court filings,” said Parker in a white paper issued early September commissioned by Valero Corporation. RINs associated with the fraud will be retired, and parties that bought those RINs will be forced back into the market to reacquire a compliance credit, further tightening the RIN market. A tax credit that pays $1 per gallon for blending biodiesel into a petroleum-based fuel known as the blender’s credit expires at year’s end, and has stymied forward term transactions for biodiesel because of the uncertainty in knowing whether the credit will be passed by the US Congress for another year or more. The tax credit has been allowed to expire four times over the past 10 years, and has been made retroactive at times, creating windfall profits, yet the uncertainty has challenged business planning and trading activity. A bitterly divided Congress adds another layer of concern that the tax credit will again be extended, and in what form. The blender’s credit has been criticized since imports can also qualify for the tax subsidy with one estimate forecasting US biodiesel imports would reach 800 million gallons this year. There have been calls to move the credit from the blending level to producers. A bill to extend the credit, H.R. 5994: Biodiesel and Renewable Diesel Incentive Extension Act of 2016, was assigned to a committee in mid-September that will consider sending it to the House or Senate for a vote. PredictGov gives the bill a 1% chance of being enacted. Producers ramped up production in August and September, with EPA qualified biomass-based diesel output at 1.79 billion gallons for the first three quarters of 2016, which compares with 1.81 billion gallons for all of 2015 when you strip out renewable diesel. Renewable diesel uses the same feedstocks as biodiesel but employs a different technology. Spot transactions for biodiesel remain limited early in the fourth quarter, but when completed are primarily transacted in a differential against the ULSD (ultra-low sulfur diesel fuel) futures contract that trades on the New York Mercantile Exchange. After a rally from September lows into October, ULSD futures were range bound until a selloff in closing out the month. For more information on Schneider Electric solutions covering the downstream oil and gas market, click here .   The post U.S. Biodiesel Industry Again Waiting on Government Largesse appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/november/04/us-biodiesel-industry-again-waiting-on-government-largesse/ http://everythingshale.com/news/2016/november/04/us-biodiesel-industry-again-waiting-on-government-largesse/ Fri, 04 November 2016 12:49:13 http://everythingshale.com/news/2016/november/03/to-err-is-human-to-have-the-safest-operators-is-divine-ots/ “Human error” is a key contributor to incidents and accidents in plants. While different analyses report differing percentages where “abnormal situations” are attributable to “human error”, the numbers are remarkably consistent. For example, a 2010 ARC Advisory Group publication reported that 42% of unscheduled plant shutdowns result from operator error, and a United States Health and Safety Executive report showed 26% of accidents attributable to operational error. If you ask me, these numbers are too high for comfort. “Human error” is frequently used to point out that somebody made a mistake and sometimes the consequences impact revenue and profit.  And sometimes, it even costs lives.   As I stated in my previous blog – operations staff directly impact safety, profitability and plant availability. While “human error” is an identified cause of loss, the statistics do not provide a solution to the problem.  So, we need to continue to ask ourselves,”how can we, as industry stakeholders, help reduce the causes of these accidents or losses?” In his 2014 paper – Improving Plant Safety – An Operator-Centric View on Process Safety – Gregor Fernholz analyzed the impact of operator error on plant safety and identified three critical areas that need to be addressed to increase plant safety: Operator Training Validating and Improving Procedures and Rules Improving communication skills and critical situation readiness. There are numerous ways to provide training to operators and a holistic training approach encompasses classroom training, training on the job and various other means. However, state-of-the-art training (with a clear focus on enhancing plant safety through an operator-centric approach) will include an Operator Training Simulator as a key element. Operator Training Simulators are a safe and cost effective way to minimize risk and plant downtime. An Operator Training Simulator accelerates both the time to competence and raises the competency level of an operator. The ARC Advisory Group recently surveyed companies who have invested in Operator Training Simulators (OTS). Two critical results from the survey: Over 65% of those companies report fewer abnormal situations, fewer trips, and incidence avoidance as a key benefit resulting from the use of OTS. Over 60% of these companies report improved safety and reduced risk and lower liability as an additional benefit resulting from the use of OTS. Another industry survey of purchasers of Operator Training Simulators reports similar findings. In that report instructors, managers and engineers claimed the most important benefits are: Faster production start-up Reduced operational risk and enhanced facility integrity High production performance. Operators surveyed reported the top three benefits to be: Improved process understanding increasing confidence of operating the process safely Improved ability to handle process upsets Increased confidence in being able to execute day to day operations Perhaps it’s not too surprising that management focuses on the more easily quantifiable benefits but it’s good to see that safety is front and foremost on the minds of the actual operators. The buyers of Operator Training Simulators (OTSs) are interested in the safe and incident free operation of multi-billion dollar assets, so it’s a good thing that an OTS provides benefits that far outweigh the cost.  But, don’t just take my word for it… Success Says It All The Fauji Fertilizer Company purchased an OTS from Schneider Electric. The company was kind enough to share the results of the project: Within the first year, 22 FFC engineers have become OTS instructors and they have conducted 130 training sessions for nearly 100 management and staff operators. Plant operators have benefited from best-in class training and were empowered to respond confidently and consistently in real time With the Operator Training Simulator the company reported that training time had decreased from years to months Unscheduled shutdowns were significantly reduced, that plant startup and shutdown was more efficient and emergencies had been handled smoothly You may be interested in reading the complete success story to learn more about Fauji’s challenges and results. Lifecycle Management Early planning in a project lifecycle is now yielding outstanding benefits. Savings can be realized early on in the design phase by capital and operating cost optimization (see Blog #1). Further dramatic savings were realized by shortening the commissioning time (see Blog #2). The plant is now up and running and being operated by highly skilled and competent operators who will make fewer errors, thereby increasing plant up-time and plant safety. The journey still isn’t over. Please read the next blog in the series to learn about the additional benefits that can be realized by integrating an Operator Training Simulator with a 3D virtual Reality Immersive Training Simulator to provide entire Plant Crew Training. To learn more about Workforce Enablement through Operator Training Simulators, download one of our industry-specific whitepapers.       The post To Err is Human, to Have the Safest Operators is Divine – OTS appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/november/03/to-err-is-human-to-have-the-safest-operators-is-divine-ots/ http://everythingshale.com/news/2016/november/03/to-err-is-human-to-have-the-safest-operators-is-divine-ots/ Thu, 03 November 2016 07:07:31 http://everythingshale.com/news/2016/november/02/colonial-pipeline-explosion-spikes-gasoline-futures/ Within minutes of taking over as the nearest delivered contract in the evening hour of October 31, December RBOB futures spiked 18.56cts or 12.8% to a five-month high on the spot continuous chart of $1.6351 gallon in trading on the New York Mercantile Exchange triggered by the second outage on the ever important Colonial Pipeline in less than two months. A crew working on main Line 1, a massive 40-inch pipeline with a flow rate of 1.37 million bpd that transports gasoline, struck the pipeline with a track hoe and caused an explosion and subsequent fire. One worker was killed and five were hospitalized. The accident occurred in Shelby County, Alabama, several miles away from a pipeline rupture discovered September 9 that shut Line 1 which later operated with restricted service for nearly two weeks through September 21. Roughly 252,000 gallons of gasoline leaked from the rupture, with Colonial constructing a 500-foot above ground bypass around the leak to restore full service. The bypass was set to be removed sometime between November 2 and 10. Colonial Pipeline again shut Lines 1 and 2 October 31, with the latter a 36-inch pipeline that transports distillate fuels, including diesel, heating oil and jet fuel. Line 2 has a 1.16 million bpd flow rate. Both Lines 1 and 2 originate in Houston, Texas, and run in a northeast direction to Greensboro, North Carolina, the location of a tank farm and interconnection point on the Colonial system. From Greensboro, Line 3 runs to Linden, New Jersey, and Line 4 to Dorsey, Maryland, both 32-inch pipelines. The Colonial Pipeline is a critical conduit for delivering refined fuels to states along the eastern seaboard, with the 2.5 million bpd 5,500 mile pipeline consistently running at or near full capacity, and connects 29 refineries and 267 wholesale distribution terminals. Refined fuels from the Gulf Coast are needed by states along the Atlantic Coast as well as imports because the region lacks sufficient refining capacity. December RBOB futures would pare the advance as the November 1 session wore on, settling 6.46cts higher at $1.4841 gallon, dropping back nearly 6.5cts shortly after the noon hour as Colonial Pipeline said it had returned its main Line 2 to service and that it believed it would restore service on its main Line 1, which was still on fire at the time of the update, by November 5. Nearest delivered RBOB futures traded in a 19.51cts range November 1, the widest spread since a 20.88cts daily range October 31, 2012 amid a selloff ahead of a contract expiration. A month prior on September 28, 2012, nearest delivered RBOB futures traded in a 29.51cts range amid a short squeeze ahead of contract expiration, trading that day in a $3.1307 to $3.4258 gallon range. In bulk wholesale spot trading on November 1, cash differentials rallied 4.0cts gallon or more for gasoline in the New York Harbor to amplify the advance by futures, with spot prices ending the session a dime or more higher in anticipation supply would tighten. In contrast, cash differentials weakened 4.75cts or more for gasoline in the Gulf Coast region to limit the gain in spot price to less than 2.0cts gallon, with concern supply could get bottled up in the region. The 13-day disruption in September triggered an 8.475 million bbl or 13.2% draw down in PADD 1 East Coast gasoline supply during the week-ended September 16 to a 55.535 million bbl 22-month low according to the Energy Information Administration, with the region’s gasoline supply reaching a 72.493 million bbl 26-year high on July 22. The large supply cushion in September joined by a surge in waterborne imports muted a greater price response, although retail prices in the Southeast jumped 9cts gallon during the disruption, and some retail outlets ran out of fuel. During the five weeks since September 16, East Coast gasoline supply has increased 7.34 million bbl to 62.874 million bbl. If Colonial can restore service on the main gasoline line by November 5, the price impact will be limited and RBOB futures have likely installed its high in response to the outage during the early moments of the November 1 session. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market , click here . The post Colonial Pipeline Explosion Spikes Gasoline Futures appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/november/02/colonial-pipeline-explosion-spikes-gasoline-futures/ http://everythingshale.com/news/2016/november/02/colonial-pipeline-explosion-spikes-gasoline-futures/ Wed, 02 November 2016 14:42:40 http://everythingshale.com/news/2016/october/25/simplify-the-search-for-leases/ Finding an attractive and available lease is one of the first steps to drilling a profitable well. E&P companies need to identify open or soon-to-be expiring leases in high grade acreage, determine the actual acreage associated with and ownership of the lease, and then outpace competitors who are following the same steps. In theory, this should not be too difficult. There are technologies like DI Analytics that flag expiring and inactive leases for you so that you don’t have to sort through individual documents yourself. The lease documents also include the owner and acreage amount, so moving forward with acquiring rights to the field should be easy. Unfortunately, this is not always the case. Complex leasing rules and difficulties obtaining the necessary courtroom filings have combined to make deriving mineral ownership tedious and time-consuming. For example, there can be numerous parties holding mineral interests on a single lease. If each party has their own lease detailing their individual interest, this could result in up to hundreds of duplicate records. Because it’s so difficult to eliminate these duplications, this means the acreage on a lease could be hugely overstated. Another common issue is when the original lease grantee later assigns the lease to someone else. When lease records are compiled, leases with a third party assigned to them could end up being excluded. This would make it difficult to identify the actual current owner of a lease. So, what if you’re facing worries that the lease you’re examining doesn’t have accurate data? Are you stuck manually hunting down documents? Luckily, there are easy ways around these problems. DI Analytics removes duplicate leases through spatial mapping of the lease polygons. This results in a single count of acreage for a lease at the grantee level, with links to all the other lease records relating to the acreage. The second problem is solved by assigning leases to operators based on majority well ownership. Now, the process of identifying the current owner and actual acreage associated with a lease is simple. This infographic covers just a few of the insights you can gather when you’re working with clean leasing data. With better leasing data, you can uncover better intelligence and find better acreage faster and easier than the competition. http://everythingshale.com/news/2016/october/25/simplify-the-search-for-leases/ http://everythingshale.com/news/2016/october/25/simplify-the-search-for-leases/ Tue, 25 October 2016 18:54:12 http://everythingshale.com/news/2016/october/24/market-currents-venezuelan-struggles-seen-in-their-oil-exports/ 1) Venezuelan President Nicolas Maduro was in Saudi Arabia yesterday to discuss oil market stability , while scrutiny of his country’s economic situation increases, and bankruptcy fears rise . As our ClipperData illustrate below, 60 percent of Venezuela’s oil exports go to three countries: the U.S., China and India. While flows to the U.S. make sense, not only given its proximity, but given how the sophisticated refineries on the U.S. Gulf coast are able to refine Venezuela’s heavy crude. Citgo’s Corpus Christi and Lake Charles refineries on the U.S. Gulf further solidify crude flows betwixt the two nations. The U.S. has been the destination for just under a third of Venezuela’s crude exports this year, ticking slightly higher from last year. India’s share of Venezuelan exports has also increased this year, at 19 percent through September, compared to 16 percent last year. As Russia’s ties with India grow ever closer amid acquisitions and joint ventures, Venezuela is likely to benefit as Russia pivots towards Latin America for supply , as opposed to its adversaries in the Middle East. China’s share of Venezuelan crude has also ticked one percent higher in the last year, up to 9 percent. Venezuela’s relationship with China is one of necessity, however, than one of choice. For China has loaned Venezuela $45 billion over the last decade , with the debt to be repaid in oil. If this isn’t bad enough, the drop in oil prices means that Venezuela has to send twice as much to service its debt, compared to when prices were twice as high at $100/bbl. 2) OPEC rumblings continue on, with Iraq again reaffirming its production is at 4.7mn bpd , despite secondary estimates pegging it materially lower. There are various technical OPEC meetings later this week, from which we may hear rumors and murmurs of country allocations in the context of a production cut. The fun never stops, does it? Both speculative long and short positions shrank in the latest CFTC data, as conviction wanes from both bulls and bears about what happens next. (Sticking to $50 like glue?). 3) The below graphic lists ten of the largest oil and gas companies in the U.S. that have declared bankruptcy since the beginning of last year. Yet while vast sums of money have been put at risk, their production is projected to be around the same levels as prior to declaring bankruptcy. Ultra Petroleum is a great example. While it is yet to emerge from bankruptcy (since declaring it in April), it has been renegotiating rig contracts, and is set to add another rig within months. Other companies, such as Halcon Resources and Sandridge Energy, have raised more cash by issuing more debt while still in the throes of bankruptcy. That’s investor confidence for you. 4) The chart below from EIA today shows how producer short positions are close to nine-year highs , as they rush to hedge their production amid higher oil prices. Such voracity for price certainty highlights two things: they think current prices are good value, and secondly, that the price volatility of the last two years has encouraged a greater modicum of risk aversion. 5) Finally, it would appear that the recent oil rally has fully worked its way into retail gasoline prices, and now that oil has leveled off, we should see gasoline resuming its end-of-year price descent as refineries return from fall maintenance and demand ebbs. Comments comments http://everythingshale.com/news/2016/october/24/market-currents-venezuelan-struggles-seen-in-their-oil-exports/ http://everythingshale.com/news/2016/october/24/market-currents-venezuelan-struggles-seen-in-their-oil-exports/ Mon, 24 October 2016 10:28:52 http://everythingshale.com/news/2016/october/24/jacobs-completes-global-headquarters-move-to-dallas/ Jacobs is expanding its Texas footprint as it focuses on engineering and construction projects in the energy and petrochemical sectors. Jacobs also has big aerospace and government contracting segments. The new headquarters is in downtown Dallas' Harwood Center. Jacobs Chairman and Chief Executive Steve Demetriou said he moved to Dallas along with several other key executives. The company now employees more than 700 of its 50,000 global employees in the Dallas-Fort Worth Metroplex. “As we continue to focus on transforming our business in terms of efficiency and high-growth in the engineering and construction industry, our new headquarters location ensures access to top talent and positions Jacobs for convenient access to our clients,” Demetriou said in a prepared statement. “In Dallas, we will also benefit from a business friendly economic and cultural environment.” Jacobs actually has a larger presence in the Houston area, last reporting more than 4,200 local employees this summer, but that was as the energy sector continued to make job reductions during the latest oil bust. As recently as three years ago, Jacobs counted more than 5,000 Houston-area workers. Now, Jacobs said it employees nearly 4,500 people throughout all of Texas. Comments comments http://everythingshale.com/news/2016/october/24/jacobs-completes-global-headquarters-move-to-dallas/ http://everythingshale.com/news/2016/october/24/jacobs-completes-global-headquarters-move-to-dallas/ Mon, 24 October 2016 10:24:23 http://everythingshale.com/news/2016/october/24/apache-s-plans-in-west-texas-draw-attention-of-environmental-groups/ The Washington, D.C.-based group has met at least three times with area residents over concerns that oil and gas drilling could pollute the air and water. The group also commissioned an assessment of the potential risks from Apache’s project to the local waters, which it plans to release at the meeting. At HoustonChronicle.com, reporter David Hunn explains why a growing number of environmental groups are taking a closer look at Apache Corp.’s plans to drill near a West Texas state park.   Comments comments http://everythingshale.com/news/2016/october/24/apache-s-plans-in-west-texas-draw-attention-of-environmental-groups/ http://everythingshale.com/news/2016/october/24/apache-s-plans-in-west-texas-draw-attention-of-environmental-groups/ Mon, 24 October 2016 09:24:31 http://everythingshale.com/news/2016/october/24/houston-area-gas-prices-still-hover-around-2/ The average price of a gallon of regular gasoline stood at $2.01 on Sunday, about one-third of a cent lower than a week ago. GasBuddy derives its average from daily surveys of more than 2,550 gas stations across the area. Houston’s average was 8.1 cents higher than one year ago and 7.6 cents higher than a month ago. The major force that has suppressed gas prices during the past year could reverse during the next month said Patrick DeHaan, GasBuddy’s senior petroleum analyst. “The trend that has delivered consistently lower gas prices is showing signs of fading away as consistent discussion from both OPEC and non-OPEC members appears to be aligned for a likely production cut at the OPEC meeting in late November,” DeHaan said in a statement. If the production cut occurs, winter gas prices will remain above last year’s averages, he added. Houston’s weekly average remains 20 cents below the national average of $2.21 per gallon. Comments comments http://everythingshale.com/news/2016/october/24/houston-area-gas-prices-still-hover-around-2/ http://everythingshale.com/news/2016/october/24/houston-area-gas-prices-still-hover-around-2/ Mon, 24 October 2016 09:13:01 http://everythingshale.com/news/2016/october/24/energysavvy-raises-14m-to-help-utilities-beyond-efficiency-programs/ The startup is also launching a consulting business to help utilities with change management. EnergySavvy raised $14 million in a Series D round to expand energy-efficiency program management and move into a broader suite of offerings for utility customers. The round was led by  GXP Investments . It also included the investment affiliate of Great Plains Energy, the parent company of Kansas City Power and Light, and Inherent Group. Existing investors Prelude Ventures and EnerTech Capital joined as well. The Series D more than doubles the company's funding total to just over $26 million. The Seattle-based startup expanded its enterprise energy-efficiency platform  for monitoring contractor performance and utility efficiency program performance. The newest additions to the platform are tools to help utilities better target and execute programs such as tree trimming, equipment leasing or selling distributed energy resources. Our theory is that you need to use the same calculation engine consistently across all customer interactions,†said Scott Case, chief operating officer for EnergySavvy. Very often, different programs are run by different siloed departments using different software. In some cases, EnergySavvy is in direct competition with companies like Bidgely, Opower or Tendril, all of which are taking unique approaches to managing customer relationships for utilities. But EnergySavvy can also coexist alongside these other companies, said Case. Many utilities have dozens of programs they offer customers — but they have not yet fully customized who sees what message, where they see it and how they see it. How can we take every single barrier to action out of there?†asked Case. EnergySavvy added five new utility customers this year, including DTE Energy and Oklahoma Gas & Electric, bringing its total to more than 40 utilities and state agencies. Although EnergySavvy's entire business proposition is about nudging utilities into more modern and meaningful digital interactions with their customers, they also rolled out a new direct mail option last year. Old habits die hard. The mailer — essentially a paper-based home audit — is meant to target hard-to-reach customers. It has produced better response rates than the industry average, with an average 23 percent completion rate. It has helped about one-third of utility clients improve their targeting of elderly and/or low-income customers for efficiency programs. Utilities don't necessarily need new tools; they just need some help thinking about a cohesive strategy to engage customers — especially as they try to boost revenue from new or existing programs, said Case. To fulfill this need, EnergySavvy also launched a consulting practice to help utilities with the process of change management. If you haven't been through it before, it's not always obvious,†said Case. By Katherine Tweed  Originally published on Greentech Media October 19, 2016 http://everythingshale.com/news/2016/october/24/energysavvy-raises-14m-to-help-utilities-beyond-efficiency-programs/ http://everythingshale.com/news/2016/october/24/energysavvy-raises-14m-to-help-utilities-beyond-efficiency-programs/ Mon, 24 October 2016 09:00:44 http://everythingshale.com/news/2016/october/24/new-reliant-energy-plan-lets-texas-customers-support-solar-energy-without-the-panels/ The company’s 100% Solar 12 plan is effectively an investment in Reliant’s ability to support renewable energy, but there is no way the company can guarantee that it will deliver solar-produced power to a building not equipped with solar panels. Instead, the plan allows Reliant to procure the rights to that energy through renewable energy credits. A credit represents the value of energy produced by solar power–say, the value of 1,000 kilowatts–but not the solar energy itself. Reliant said the plan is still a way  for customers to participate in solar without having to make the expensive jump to installing solar panels, said Kosta Zujic, the director of innovation for Reliant and its parent company, NRG Energy. He added that all of the credits Reliant buys for the program will come from Texas-produced solar energy. Zujic compared the plan to buying the value of solar energy in bulk–there is no concern that cloudy days will mean less power for individuals on the plan. The fixed individual price of the plan will vary for customers depending on their location and the costs of transmission and distribution. The underlying energy rate, however, will be the same for all, Zujic said. Reliant customers can visit this website to sign up for the fixed-rate plan. Reliant will likely be adding other benefits to the solar plan in the future, Zujic said. NRG Energy has recently agreed to acquire solar projects from bankrupt SunEdison in Texas and other states. Comments comments http://everythingshale.com/news/2016/october/24/new-reliant-energy-plan-lets-texas-customers-support-solar-energy-without-the-panels/ http://everythingshale.com/news/2016/october/24/new-reliant-energy-plan-lets-texas-customers-support-solar-energy-without-the-panels/ Mon, 24 October 2016 08:12:41 http://everythingshale.com/news/2016/october/24/oil-falls-as-iraq-balks-at-opec-output-deal/ Prices fell fell more than 1 percent  in New York. Iraq should be exempted from trimming production because it's embroiled in a war with Islamic militants, Oil Minister Jabbar Al-Luaibi said Sunday in Baghdad. Oil was down 61 cents to $50.24 a barrel in New York shortly before 8:50 a.m. Central time. Oil has fluctuated near $50 amid uncertainty about whether the Organization of Petroleum Exporting Countries can implement an accord to reduce output when they gather at an official meeting in November. A committee will meet later this month to try to resolve differences over how much individual members should pump. U.S. drillers in the  are returning rigs to shale areas as rising oil prices over the past month make it feasible for them to raise output. Rigs targeting crude in the  rose for an eighth week, according to the Houston oil services company Baker Hughes. Iraq's request to be exempted from a deal to cut output has further clouded the prospect of OPEC strategy to stabilize the oil market succeeding,†said Jens Naervig Pedersen, a Copenhagen-based analyst at Danske Bank A/S. At the same time, the oil rig count indicates that U.S. shale producers are slowly returning, making OPEC's life even more difficult.†Iraqi Output Brent for December settlement declined as much as 41 cents, or 0.8 percent, to $51.37 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $1.04 to WTI. Iraq disputes OPEC figures that peg the nation's output at less than 4.2 million barrels daily, Al-Luaibi said. The country is producing more than the 4.7 million barrels a day it pumped in September, he said. Iran, Nigeria and Libya are the only nations currently exempt from the proposed production cuts. The fastest pace of manufacturing and services growth this year in Europe failed to sustain higher oil prices. A Purchasing Managers' Index for the euro zone rose to 53.7 in October, IHS Markit said on Monday. Comments comments http://everythingshale.com/news/2016/october/24/oil-falls-as-iraq-balks-at-opec-output-deal/ http://everythingshale.com/news/2016/october/24/oil-falls-as-iraq-balks-at-opec-output-deal/ Mon, 24 October 2016 08:05:55 http://everythingshale.com/news/2016/october/24/american-midstream-partners-to-buy-jp-energy-for-2-billion/ The unit-for-unit transaction is valued at $8.63 per common unit with an estimated enterprise value of $2 billion, the Denver-based company said in a statement Monday. The deal creates a broad midstream platform in North America that will own and operate assets ranging from natural gas pipelines to storage capacity. The expanded operations are aimed at creating a more diverse footprint in the North American basins and increased potential for third-party acquisitions, according to the statement. The merger elevates and reshapes our two businesses into a new platform that we expect will allow for higher growth, new business opportunities and a stronger financial position,†Lynn L. Bourdon, president of American Midstream, said in the statement. The combined company will include more than 3,100 miles of gathering and transportation pipeline, a 13.9 percent stake in an offshore floating production facility and the third-largest U.S. wholesale propane business, according to the statement. In conjunction with the deal, ArcLight Capital Partners LLC, the sponsor of both American Midstream and JP Energy, will combine the general partners of the two companies. The deal is expected to close later this year or in early 2017. Bank of America Merrill Lynch advised American Midstream, and BMO Capital Markets advised JP Energy. Comments comments http://everythingshale.com/news/2016/october/24/american-midstream-partners-to-buy-jp-energy-for-2-billion/ http://everythingshale.com/news/2016/october/24/american-midstream-partners-to-buy-jp-energy-for-2-billion/ Mon, 24 October 2016 07:58:12 http://everythingshale.com/news/2016/october/24/shell-among-new-lng-sellers-for-asia-hub-contender-singapore/ Singapore, which is vying to become a regional center for the trading of liquefied natural gas in Asia, picked Royal Dutch Shell Plc and Pavilion Gas Pte Ltd. as its next suppliers of the fuel. The companies will have exclusive rights to sell 1 million metric tons of LNG annually for up to 3 years, with imports beginning in 2017, the city-state's Energy Market Authority said in a statement. The country will also consider spot purchases of the supercooled fuel and piped natural gas on a case-by-case basis, S. Iswaran, the Minister of Industry, said at the Singapore International Energy Week conference on Monday. Singapore wants to use its geography and stature as Asia's oil-trading center to also be a leader in LNG in a region that accounted for more than 70 percent of global demand in 2015. The nation has built a receiving terminal while the state-owned investment company set up Pavilion Energy Pte in 2013 to trade the fuel. It's drawn firms from Glencore Plc and GAIL India Ltd. to open trading desks in the country, and Singapore Exchange Ltd. has started futures and swaps linked to an index of spot LNG prices. Shell and Pavilion were chosen because they offered flexible and competitive pricing not just indexed to oil but to different options on the table,†Iswaran said. One of the considerations in looking at the next tranche was the offering of flexibility in terms of price indexation. And indeed they have put forward some flexible options, and end-users have responded to these offers.†The exclusive licenses will expire either after three years or if the companies import more than 1 million tons in a year, according to a statement from the Energy Market Authority. Beyond that the companies will still be able to import LNG into Singapore but will not be guaranteed exclusivity, Darius Lim, a Pavilion spokesman, said by email. Natural gas can be cooled and liquefied to transport it on tankers between areas difficult to link by pipeline. LNG traded in Asia — where sellers such as Qatar and Indonesia ship fuel to buyers including Japan or China — has traditionally been pegged to crude prices. That's because the region lacks a benchmark similar to Henry Hub in the U.S., which the country's burgeoning LNG exporters use in sales contracts. Demand Surge A previous contract to supply LNG to Singapore was won by BG Group Plc. The company was acquired by Shell in February. Under that deal, BG was to supply 3 million tons of LNG annually over 10 years starting in 2013. The island nation, which generates 95.5 percent of its electricity using natural gas, imported 1.2 million metric tons of LNG last year, a drop of 14 percent from 2014 because of lower power demand, according to Bloomberg New Energy Finance. LNG consumption may rise to more than 3 million tons annually from 2022, and surge to 11 million tons a year by 2030 as its contracts to receive natural gas via pipeline from Malaysia and Indonesia expire, BNEF analysts including Maggie Kuang said in a June 9 report. Annual imports of LNG in Southeast Asia totaled 3.8 million tons in 2015, and is expected to jump to 16.8 million tons by 2020, with growth accelerating even more thereafter as national resources are depleted, according to BNEF. By 2030, total LNG demand in the region will reach more than 50 million tons a year. The plunge in commodity prices over the past two years has prompted changes in the LNG market, allowing for an expansion of the spot market as some buyers seek to resell shipments and the fuel's price relationship with oil is weakened. Singapore will carry out a consultation starting this quarter on spot LNG imports,†Iswaran said. Our hope is that we should be able to get something moving on this next year.†Singapore is home to more than 25 LNG trading desks and its estimated that about 2,000 cargoes transit near the country each year. Singapore LNG Corp., which operates the city-state's first receiving terminal, has three storage tanks at its Jurong Island facility. Spot LNG in Singapore rose to $6.119 per million British thermal units last week, climbing to trade above $6 for the first time since January. Comments comments http://everythingshale.com/news/2016/october/24/shell-among-new-lng-sellers-for-asia-hub-contender-singapore/ http://everythingshale.com/news/2016/october/24/shell-among-new-lng-sellers-for-asia-hub-contender-singapore/ Mon, 24 October 2016 07:51:10 http://everythingshale.com/news/2016/october/23/would-the-us-ever-attend-an-opec-meeting-fuel-for-thought/ The recent invitation by OPEC for US officials to join in production freeze talks is clearly a nod to the production powerhouse Americas has become as a result of the shale revolution. But it wasn’t always that way. Just ask former US Energy Secretary Bill Richardson, who, 16 years ago, was the point person in talks with Saudi Arabia to boost production, which would keep US gasoline prices stable. Richardson’s tenure from 1998 through 2000 came at a much different time for both the US’ relations with OPEC and its role in the world oil market. For one, the US was producing only about 5.9 million b/d and was in the midst of a historic supply decline that would crater at about 3.9 million b/d by October 2005. In the spring of 2000, Richardson was urging Saudi Arabia through phone calls and what he called “quiet diplomacy” to orchestrate an OPEC production increase as the Clinton administration was worried about a crude oil price spike. That price spike had brought prices to over $34/b, a level which roughly 15 years later would create a crisis for producers and a boon for consumers. And OPEC has also changed significantly, Richardson said. “It’s a different OPEC,” Richardson said in an interview with S&P Global Platts. “Today, they’re not unified, there are more players and while the Saudis are still the leaders, they’re no longer as friendly to us as they used to be nor can they totally dictate [prices].” For the full interview with Bill Richardson, listen to the Capitol Crude podcast here: ‘Quiet diplomacy’: The US relationship with OPEC oil production Earlier this month, the Obama administration turned down an invitation from OPEC to join in the production freeze talks in Vienna. The US government’s absence at the OPEC meeting will not be a surprise to anyone. Representatives of Texas and Alaska attended a meeting with non-OPEC  producers nearly 30 years ago and US producers have attended OPEC seminars in the past. But attendance by a US government official would be “unprecedented,” said Bob McNally, a longtime OPEC observer and president of The Rapidan Group. The US government has never participated in an OPEC meeting aimed at managing the market, McNally said. And with no direct control over US crude oil output, US government officials would have little to contribute at such a meeting. In addition, the growth of US shale oil production has changed the way the US government views OPEC. Bill Richardson’s oil diplomacy in 2000 When OPEC reached an agreement to boost production in March 2000, Richardson spent the days leading up to that agreement on the phone with Ali al-Naimi,  who was Saudi Arabia’s oil minister at the time. Richardson was tasked with getting the Saudis to broker an OPEC-wide production increase to help counter the increase in crude oil and gasoline prices in the US. Richardson told S&P Global Platts that his diplomatic focus at the time was almost exclusively on Saudi Arabia and always focused at balancing the market. “My diplomacy was always aimed at the Saudis who were the major player in OPEC and, at that time, they always helped us,” Richardson said. “I’ve got to say that they always would listen to my pleas to either cut production, increase production or leave production alone. Our objective was to stabilize prices.” But despite his frequent phone calls and visits with Saudi Arabia and other OPEC producers, Richardson said he would have also rejected an invitation to take part in an OPEC meeting at the time, as the Obama administration did. “I would have rejected it also because our policy has always been to let the market dictate prices not OPEC and not production increases and production cuts,” Richardson said. At the same time, the importance of OPEC decisions have seemingly less relevance to US policy, at least at the White House. A day after the 2000 OPEC decision, President Clinton led off his news conference calling it “good news for our economy and for the American consumer.” By comparison, during a September 29 press briefing, held a day after OPEC announced the possible agreement to cut production, White House Press Secretary  Josh Earnest did not mention OPEC nor oil prices and was not asked a single question about it. The relationship has changed for the better, Richardson said. “It’s better for us,” he said. “We don’t want to be subject to the volatility of the Middle East, but we still have to be conscious of our friends. We want our friends in the Middle East, like the Saudis, like the UAE, like Qatar, to have good relationships with us.” The post Would the US ever attend an OPEC meeting? – Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/23/would-the-us-ever-attend-an-opec-meeting-fuel-for-thought/ http://everythingshale.com/news/2016/october/23/would-the-us-ever-attend-an-opec-meeting-fuel-for-thought/ Sun, 23 October 2016 23:30:31 http://everythingshale.com/news/2016/october/21/misleading-exxonknew-ad-shows-campaign-always-about-politics/ A new #ExxonKnew campaign ad released today by the League of Conservation Voters (LCV) targeting a House candidate in Nevada only provides further evidence that politics is what’s driving the entire effort. The ramifications of this ad are significant, considering that a federal district judge has just issued a discovery order raising questions about the political motivations of the Democratic Attorneys General, who over the past year, have launched extremely controversial and unprecedented climate investigations into ExxonMobil. LCV’s #ExxonKnew ad pushes misinformation The ad makes the claim , “Newly released documents show oil giant Exxon had scientific evidence 40 years ago that climate change is being fueled by carbon pollution and spent millions covering it up, propping up politicians to block action to protect us.” This claim comes directly from a series of articles by the Columbia School of Journalism (which appeared late last year in the LA Times ) and InsideClimate News (ICN) – both of which are funded by the Rockefeller Brothers Fund. But a closer look at the documents shows that ICN and Columbia simply cherry-picked them to make these claims. To provide just one example, ICN purports that Exxon scientist James Black warned Exxon executives that “if the CO 2  concentration continued to rise, it could harm the environment and humankind.” But here’s a section from Black’s presentation that ICN just left out because it didn’t go with their predetermined narrative: “A number of assumptions and uncertainties are involved in the predictions of the Greenhouse Effect […]There is considerable uncertainty regarding what controls the exchange of atmospheric CO2 with oceans and with carbonaceous materials on the continents.” EID has many more examples here . But the important point is that the #ExxonKnew argument was so weak that New York Attorney General Eric Schneiderman, after proclaiming he had launched an investigation into what Exxon “knew,” ended up having to abandon it and change his justification altogether (for more on that click here ). #ExxonKnew didn’t sell well with the AGs in Schneiderman’s climate coalition, either. FOIA’d  emails revealed  that a number of AGs have been running for the hills over the past few months as this campaign has fallen apart. One AG called Schneiderman a “wild card” and another said being associated with his investigation makes them “nervous.” That’s not to mention that just about every legal expert has said Schneiderman doesn’t have a case. Editorial boards and columnists across the country have slammed these investigations for violations of free speech and having a “ flimsy ” legal basis. Bloomberg has called the AGs’ actions a “dangerous arrogation of power” while Reuters noted that Schneiderman “did not have strong case.” New York Post put it bluntly saying the #ExxonKnew campaign “is on a fast track to disaster.” LCV funders same as those behind #ExxonKnew campaign + Tom Steyer It will come as no surprise that the primary funders of #Exxonknew are also major funders of LCV. The Rockefeller Brothers Fund, Rockefeller Family Fund and Rockefeller Philanthropy Advisors, which have bankrolled pretty much the entire #ExxonKnew campaign, have combined given $2.272 million to LCV since 2009. The Energy Foundation – another huge backer of #ExxonKnew – has given LCV $1.775 million from 2010-2014. And then there is the role of California billionaire activist Tom Steyer. During the 2014 election cycle, the Washington Post called Steyer “a major LCV funder” noting, “ There’s not a day that goes by that someone on our team doesn’t talk to someone on the Steyer team,” [LCV President Gene] Karpinski said . This connection between Steyer and the #ExxonKnew campaign is made all the more interesting considering that Steyer just told Politico that he hasn’t been involved. As he said, “We’re definitely not pushing this thing…we are not part of this effort.” Of course, Steyer failed to mention that his group, NextGen Climate, actually organized a rally in April in an effort to get New Hampshire Attorney General Joseph Foster to “join the investigation of Exxon Mobil.” And the New York Post revealed that New York Attorney General Eric Schneiderman, the ringleader of the #ExxonKnew circus, tried to hit up Steyer for donations to his future gubernatorial bid on the back of his investigation into Exxon. So here’s what we know: the AGs launching investigations into ExxonMobil claim their effort isn’t political, but this new ad reveals that’s rubbish. And, while Tom Steyer has claimed he’s not involved in the #ExxonKnew campaign, we now know that he’s pouring hundreds of thousands into a political group that’s pushing #ExxonKnew.       http://everythingshale.com/news/2016/october/21/misleading-exxonknew-ad-shows-campaign-always-about-politics/ http://everythingshale.com/news/2016/october/21/misleading-exxonknew-ad-shows-campaign-always-about-politics/ Fri, 21 October 2016 16:14:32 http://everythingshale.com/news/2016/october/21/new-science-confirms-that-oilfield-produced-water-is-safe-for-irrigation-refuting-activist-claims-again/ For more than 20 years, Kern County’s Cawelo Water District (Cawelo) has helped farmers offset water shortages by recycling some water brought from the ground (“produced”) during the oil and gas development process in non-hydraulically fractured wells. The produced water is filtered and treated by Cawelo. The water district then blends it with water from other sources and conducts quality testing before providing it to farmers. This program has never been more necessary than now, in the midst of California’s record-breaking drought. New study confirms previous analyses: Treated water is safe for crops This week, Cawelo released more good news about its ongoing water testing program to ensure the safety of recycled water. Results from a citrus crop study by a third-party environmental toxicologist found that “ …organic elements found in produced water are not being absorbed into fruit.  This verified a previous water quality study that showed Cawelo’s produced water supply to be safe for agriculture irrigation. [emphasis added] As Lois Henry of the Bakersfield Californian reported : “Cawelo voluntarily hired toxicology firm Enviro-Tox to test produce harvested last fall, mostly nuts and grapes at that time of year. Those findings, released last April, showed no difference between nuts and grapes irrigated with water that included the recycled oilfield water and nuts and grapes irrigated by other sources. This new round of tests involved mandarins, oranges and lemons from 18 different locations, again some irrigated with the oilfield water, some from other sources. Enviro-Tox looked for nine different chemicals that had been found in Cawelo’s blended irrigation water — at levels lower than drinking waterstandards… Toxicologists again found no difference between the ‘test’ fruit (irrigated with the blended oilfield water) and ‘control’ fruit (irrigated using other sources.)” [emphasis added] Source: Comstock’s. The testing program is intended to protect public health and to ensure that factual information makes its way to the public. Cawelo went on to note why this highly successful, decades-old program is especially important and beneficial now: As California grapples with ongoing water shortages and drought, the Governor and state leaders have established water policies that mandate Californians reuse and recycle water whenever possible. Recycling produced water is providing farmers a much-needed additional source of water to irrigate crops and helping protect already depleted groundwater basins. [emphasis added] You would think that a partnership providing 34,000 acre-feet (10 billion gallons) of treated, safe water to California farmers would be cause for celebration. But instead of celebrating this innovative program, extreme “keep it in the ground” anti-fracking activists have used this success story as yet another excuse to scare their followers with anti-scientific misinformation that is blatantly inaccurate. Activists hate good news As Energy In Depth has documented , activists curiously trained their sights on this program in a misguided attempt to halt all oil and gas production, ignoring the consequences that their activities could have on the agriculture industry in the nation’s top agricultural state and belying any pretense that their interest is consumer safety. Actor (and New York resident) Mark Ruffalo is perhaps best known as an opponent of fracking, but he has taken a keen interest in Cawelo even though water generated from fracking is never used for agricultural purposes . Plainly, his broader goal is to shut down oil and gas operations altogether. Ruffalo even created an activist group, Water Defense, and hired a non-scientist as his “chief scientist” to conduct bogus tests to argue for an end to the Cawelo program. (The Huffington Post covered how Water Defense tried similar opportunistic hijinks in the wake of the Flint water crisis.) Of course, fringe environmental group Food and Water Watch was quick to latch-on to Water Defense’s fake science and to call for an end to the highly regarded irrigation program, proving once again that the protection of food and water is far from its highest priority . Also predictably, Californians Against Fracking has called for the Cawelo program to be shut down, even though there is no fracking fluid whatsoever in the water sent to the Water District. EcoWatch published the claim that “there hasn’t been a comprehensive, independent study to determine if the wastewater is safe for crop irrigation.” We refer you to the headline of this article. The Center for Biological Diversity, never shy about scaring people using intentionally misleading information, produced a fact-less “ fact sheet ” that simply ignores the scientific fact that produced water is treated and, as Cawelo reported following its initial study: “Initial water quality laboratory analysis reported the levels of acetone in Cawelo’s produced water were 280 times below the maximum concentration considered safe for drinking water ; and the level of petroleum hydrocarbons in Cawelo’s produced water were 750 times below the maximum concentration considered safe for drinking water . [Emphasis added] To date, CBD has not corrected the record for its members. What CBD lacks in integrity it probably makes up for in fundraising effectiveness. Conclusion Not only does the Cawelo program allow a productive use for oilfield-produced water (oil production produces water and oil in an approximately 15:1 ratio ) but it allows the farmers who produce our food to mitigate the current unprecedented drought. This is the very definition of a win-win-win, for California’s agriculture industry, for consumers and for the environment. The continuously demonstrated safety of the venerable Cawelo water recycling program is great news for all Californians genuinely concerned with the stewardship of our food supply. It is a shame that activists, who raise money and maintain relevance based on fear and not science, cannot occasionally take a break from industry-bashing to recognize when science shows that they are getting exactly what they claim to want. http://everythingshale.com/news/2016/october/21/new-science-confirms-that-oilfield-produced-water-is-safe-for-irrigation-refuting-activist-claims-again/ http://everythingshale.com/news/2016/october/21/new-science-confirms-that-oilfield-produced-water-is-safe-for-irrigation-refuting-activist-claims-again/ Fri, 21 October 2016 15:07:18 http://everythingshale.com/news/2016/october/21/us-oil-and-gas-rig-count-up-again-permian-booms/ U.S drillers sent 14 rigs back to the oilfield this week, the fifth increase in a row and the 17th in the past 20 weeks, the Houston oilfield services company Baker Hughes reported Friday. The rig count climbed to 553, up from a low of 404 in May. The count, however, is still down more than 200 over the same period last year, when 787 were operating in U.S. oil and gas fields. Drilling activity has followed a modest rebound in prices, from February's low of about $26 a barrel to more than $50 over the past week. This week, the number of active oil rigs increased by 11 to 443. Gas rigs rose 3 to 108. The number of offshore rigs was unchanged, at 23. Drillers operated 253 rigs in Texas, up 10 from the week prior; All of those came in the Permian Basin. Comments comments http://everythingshale.com/news/2016/october/21/us-oil-and-gas-rig-count-up-again-permian-booms/ http://everythingshale.com/news/2016/october/21/us-oil-and-gas-rig-count-up-again-permian-booms/ Fri, 21 October 2016 12:23:53 http://everythingshale.com/news/2016/october/21/market-currents-seasonal-maintenance-means-lower-oil-imports/ 1) Yesterday we discussed how the U.S. West coast has seen imports drop off considerably this month, led by weakness in deliveries of Saudi crude. We have seen a similar case of import weakness on the Gulf coast of late, but in this case it has been driven by a lack of Colombian receipts. Our ClipperData show Colombian imports to the U.S. Gulf have averaged 260,000 barrels per day so far this year. October’s current pace is at a much lesser 77,000 bpd, with all grades absent except for Castilla blend: 2) Heavy sour Castilla blend crude has made its way to 15 different refineries and terminals on the U.S. Gulf coast this year (hark, home to nearly half of all U.S. refinery capacity), delivering to about half of these on average each month so far through September. However, as refinery maintenance has kicked in, Castilla blend has only made its way to three such destinations so far this month. Our ClipperData show imports of medium sour Vasconia crude to the U.S. Gulf have averaged 84,000 bpd so far this year through September, 7.5 percent higher than year-ago levels. Arrivals, however, have been completely absent so far this month – just as they were last year. The weakness we are seeing in imports is very much a seasonal trend, as highlighted by the chart below. October is typically the weakest month of the year amid refinery maintenance, before we see a rebound – with refinery runs – through the end of the year: 3) The prize for the most hilariously duplicitous headline of the day goes to “ Russia eyes record-high oil output, but sticks to ‘freeze’ option “,  as Russian Energy Minister Alexander Novak said it will produce 11mn bpd next year, but that it still wants global producers to curb production amid weak prices. Ooh, that tickled me. 4) Staying on the topic of Russia,  yesterday we discussed how ongoing investment by Russian producers is set to propel Russian oil production to new post-Soviet records in the coming years. The chart below shows how Rosneft has cut its debt in half, according to its reported net debt levels. That said, the reported number doesn’t include billions of dollars of pre-payments from the likes of China. If they are included, Rosneft has only reduced its debt by $6 billion since 2013, compared to the reported $22 billion. 5) Finally, although Japan has already imported an average of 200,000 bpd of Iranian crude so far this year through September, this number is set to increase as more conservative traders restart purchases . Private shipping insurance likely returning to full coverage by the end of this year is set to encourage some trading houses back into business with the Persian state. In terms of Iranian flows into Asia so far this year, East Asia has been the leading recipient, with China accounting for over 40 percent of all Asian deliveries. South Asian offtake is entirely to India, accounting for a quarter of all Asian flows, while smaller volumes earlier in the year made it to Southeast Asia, with the Philippines receiving a delivery in March of 566,000 bbls of South Pars condensate, as well as three cargoes discharged in Singapore in the first half of the year. Comments comments http://everythingshale.com/news/2016/october/21/market-currents-seasonal-maintenance-means-lower-oil-imports/ http://everythingshale.com/news/2016/october/21/market-currents-seasonal-maintenance-means-lower-oil-imports/ Fri, 21 October 2016 11:32:27 http://everythingshale.com/news/2016/october/21/market-currents-seasonal-maintenance-means-lower-oil-imports-1/ 1) Yesterday we discussed how the U.S. West coast has seen imports drop off considerably this month, led by weakness in deliveries of Saudi crude. We have seen a similar case of import weakness on the Gulf coast of late, but in this case it has been driven by a lack of Colombian receipts. Our ClipperData show Colombian imports to the U.S. Gulf have averaged 260,000 barrels per day so far this year. October’s current pace is at a much lesser 77,000 bpd, with all grades absent except for Castilla blend: 2) Heavy sour Castilla blend crude has made its way to 15 different refineries and terminals on the U.S. Gulf coast this year (hark, home to nearly half of all U.S. refinery capacity), delivering to about half of these on average each month so far through September. However, as refinery maintenance has kicked in, Castilla blend has only made its way to three such destinations so far this month. Our ClipperData show imports of medium sour Vasconia crude to the U.S. Gulf have averaged 84,000 bpd so far this year through September, 7.5 percent higher than year-ago levels. Arrivals, however, have been completely absent so far this month – just as they were last year. The weakness we are seeing in imports is very much a seasonal trend, as highlighted by the chart below. October is typically the weakest month of the year amid refinery maintenance, before we see a rebound – with refinery runs – through the end of the year: 3) The prize for the most hilariously duplicitous headline of the day goes to “ Russia eyes record-high oil output, but sticks to ‘freeze’ option “,  as Russian Energy Minister Alexander Novak said it will produce 11mn bpd next year, but that it still wants global producers to curb production amid weak prices. Ooh, that tickled me. 4) Staying on the topic of Russia,  yesterday we discussed how ongoing investment by Russian producers is set to propel Russian oil production to new post-Soviet records in the coming years. The chart below shows how Rosneft has cut its debt in half, according to its reported net debt levels. That said, the reported number doesn’t include billions of dollars of pre-payments from the likes of China. If they are included, Rosneft has only reduced its debt by $6 billion since 2013, compared to the reported $22 billion. 5) Finally, although Japan has already imported an average of 200,000 bpd of Iranian crude so far this year through September, this number is set to increase as more conservative traders restart purchases . Private shipping insurance likely returning to full coverage by the end of this year is set to encourage some trading houses back into business with the Persian state. In terms of Iranian flows into Asia so far this year, East Asia has been the leading recipient, with China accounting for over 40 percent of all Asian deliveries. South Asian offtake is entirely to India, accounting for a quarter of all Asian flows, while smaller volumes earlier in the year made it to Southeast Asia, with the Philippines receiving a delivery in March of 566,000 bbls of South Pars condensate, as well as three cargoes discharged in Singapore in the first half of the year. Comments comments http://everythingshale.com/news/2016/october/21/market-currents-seasonal-maintenance-means-lower-oil-imports-1/ http://everythingshale.com/news/2016/october/21/market-currents-seasonal-maintenance-means-lower-oil-imports-1/ Fri, 21 October 2016 11:32:27 http://everythingshale.com/news/2016/october/21/obama-administration-sides-with-activists-on-methane-rule-moves-to-put-small-producers-out-of-business/ The Obama administration has released its final Control Techniques Guidelines (CTG) for oil and gas production, and as we’ve noted before , it is officially going through with its plan to eliminate an exemption for low producing oil and gas wells (marginal wells), even though it originally intended to exempt these wells due to the enormous economic consequences and the fact that their emissions are negligible. It was this elimination of the exemption for marginal wells specifically, which caused the anti-fracking group, Clean Air Task Force (CATF), to praise EPA.  As Politico reported yesterday after the decision was made official, The green group Clean Air Task Force praised EPA for removing an exemption for lower-producing wells from the draft guidelines it released earlier this year. The final version of the rules, still not officially posted on EPA’s website, seeks more data on those lower-producing wells before deciding how to proceed. “It’s critical that EPA move forward swiftly to close this loophole and ensure the guidelines provide comprehensive protection for communities across the country,” CATF advocacy director Conrad Schneider said. CATF, in their efforts to stop fracking across the country, specifically lobbied EPA to remove the planned exemption for marginal wells based on dubious science (more on that in a minute). The implications of this decision will not be marginal, however. Thousands of family-owned businesses across the country operate marginal wells — smaller wells that produce 15 barrels or less per day, or 90,000 cubic feet or less of natural gas per day. These businesses have faced the biggest challenges in today’s low commodity price environment; now under EPA’s rules many of these  small companies could essentially be wiped out . The Interstate Oil and Gas Compact Commission’s (IOGCC) released a report last year, which finds the loss of marginal oil and gas wells developed in 2015 would trigger an estimated direct loss of 57,560 jobs in the oil and gas sector and $4.4 billion in direct earnings within the survey’s 29 states. Yet this report actually only looks at “stripper wells,” which are wells producing 10 barrels or less per day and 60 thousand cubic feet or less of natural gas per day. So if you were to evaluate job and GDP losses from eliminating  all marginal wells , the impact would be even greater. According to National Stripper Well Association Chairwoman Darlene Wallace , “These new rules will cripple stripper and marginal well owners and operators, and on top of historically low oil prices, we are looking at total disaster. By requiring the addition of new costly equipment requirements and expensive leak detection the economics within the oil and gas industry as a whole will be fundamentally changed, severely and forever.” Rules will impose prohibitive costs on vulnerable small producers already struggling   Not only did EPA decide not to exempt marginal wells from its fugitive emissions program in the CTG, it is also requiring that producers install new pneumatic control technologies, even though the current ones on marginal wells aren’t typically active and therefore emissions are negligible. This will impose an enormous cost on small producers that will have little-to-no environmental benefit. EPA is also requiring the installation of vapor recovery units on all storage tanks. Many of these tanks are too old to implement new technologies, which means small producers will have to replace these tanks entirely – and the cost of doing so is prohibitive. As IPAA rightly stated in its comments to EPA , “marginal well facilities should be excluded from the scope of the CTG. Clearly, the burden of adding capture equipment – and certainly the burden of replacing storage vessels – cannot be readily borne by marginal well operations .” (emphasis added) EPA uses “unconventional” data, pushed by CATF and other activist groups, to justify decision In its comments to EPA, CATF quoted a study spearheaded by the Environmental Defense Fund (EDF),  Zavala-Araiza et. al , which CATF says shows that “lower producing wells can have significant emissions.” CATF would have you believe, counter-intuitively, that small sites can emit the same volume as larger sites. But  Zavala-Araiza et. al  actually changes the definition of “super-emitter” in order to make this claim.  The researchers of the study define “functional super-emitters” not as sites that emit a lot of methane but as sites where  a certain percentage  of that well’s methane may be leaking.  From the report: “We designed a conceptual framework that  functionally  defines superemitting sites as those with the highest proportional loss rates (methane emitted relative to methane produced).” It goes on to say, “[L]ower production sites (10−100 thousand standard cubic feet per day or Mcf/d) are almost twice as likely to be among the top 5% of emitters relative to sites with an order of magnitude higher rates of production (100−1000 Mcf/d) (Table 1). Not unexpectedly, however, the highest producing sites (>1000 Mcf/d) are 4−7 times more likely than other sites to be among the highest emitting 5% of sites. Consequently, the conventional definition of super-emitters would be biased toward the highest producing sites.” In other words, even the researchers themselves admit that what they are doing is not exactly conventional. A closer look at the data used in the EDF study demonstrates that marginal wells clearly represent a low component of the methane emissions universe. The above graphic shows that although a similar  percentage  of total production  can  emit from marginal wells when compared to high-producing wells,  actual emissions  from marginal wells are negligible. Having said that, however, even the above data on marginal wells from the study are highly questionable considering they indicate high emitting marginal wells leak  nearly half  of their extracted gas. This is unrealistic as no producer would continue operating a well that is losing half of its value. EPA’s about face EPA’s August 2015  draft regulations included a set of  control techniques guidelines (CTG)  that explicitly acknowledged that marginal operations would be exempt in EPA’s methane rule – or its New Source Performance Standard (NSPS) – on the basis of economic hardship and because emissions at marginal sites are “inherently low.” As EPA put it, “For purposes of this guideline, the emissions and programs to control emissions discussed herein would  apply to the collection of fugitive emissions components at a well site with an average production of greater than 15 barrel equivalents per well per day  (15 barrel equivalents), and the collection of fugitive emissions components at compressor stations in the production segment. It is  our understanding that fugitive emissions at a well site with low production wells are inherently low  and that many well sites are owned and operated by small businesses.  We are concerned about the burden of the fugitive emissions recommendation on small businesses, in particular where there is little emission reduction to be achieved . For the purposes of this guideline, fugitive emissions recommendations would  not apply to well sites that only contain wellheads .” ( p. 9-1 ; emphasis added) In December 2015, the Independent Petroleum Association of America (IPAA) and the American Exploration & Production Council (AXPC) cited that exact passage in its  official comments  to the EPA. “This recognition is entirely appropriate and accurate,” IPAA and AXPC wrote. The groups added that they “agree that a fugitive emissions program should not apply to facilities with only a single wellhead.” So how did the Administration, less than a year later, come to exactly the opposite conclusion? Thus far, EPA has claimed that “several commenters” had recommended not including low producing wells and, as the agency puts it, “Because we did not receive additional data on equipment or component counts for low production wells, we believe that a low production well model plant would have the same equipment and component counts as a non-low production well site.” But as the CTG clearly shows, it was EPA –  not commenters  – who had initially suggested marginal wells should be treated differently, and potentially even exempted from the agency’s methane rule.  The EPA claimed the industry didn’t adequately support its position, even though the industry was simply agreeing with what the EPA had already formulated! Data Integrity Concerns The Administration’s decision on marginal wells adds to growing concerns about its methane rules. A  report  last year by NERA Economic Consulting – which has performed analyses for the U.S. Department of Energy, among others – found that the methane rule was based on a single, flawed economic study  of the “social cost of methane.” The study was also  authored by individuals within the EPA . Additionally, calculations by Energy In Depth showed that President Obama’s broader methane mitigation strategy – which includes the EPA’s methane rule – would yield  only 0.0047 degrees Celsius of avoided warming  the end of the century. The EPA also projected hundreds of millions of dollars in benefits based on the value of natural gas that would be captured and sold as a result of the rule, but the value was based on natural gas prices being $4 per thousand cubic feet (mcf). The current average natural gas  price is nearly half that , or $2.16/mcf. Just weeks before rolling out the final methane rule, the EPA significantly  increased its estimates of methane emissions  from petroleum and natural gas systems. The EPA did not identify additional emissions, but simply began assuming that marginal wells had emissions profiles similar to those of higher producing wells. The EPA admitted that its emissions estimates “greatly increase” as a result of its new methodology, “ due to the activity data revision alone .” But as the EPA itself acknowledged last summer, marginal wells have “ inherently low ” emissions – even though the Administration now says otherwise. http://everythingshale.com/news/2016/october/21/obama-administration-sides-with-activists-on-methane-rule-moves-to-put-small-producers-out-of-business/ http://everythingshale.com/news/2016/october/21/obama-administration-sides-with-activists-on-methane-rule-moves-to-put-small-producers-out-of-business/ Fri, 21 October 2016 11:24:27 http://everythingshale.com/news/2016/october/21/obama-administration-sides-with-activists-on-methane-rule-moves-to-put-small-producers-out-of-business-1/ The Obama administration has released its final Control Techniques Guidelines (CTG) for oil and gas production, and as we’ve noted before , it is officially going through with its plan to eliminate an exemption for low producing oil and gas wells (marginal wells), even though it originally intended to exempt these wells due to the enormous economic consequences and the fact that their emissions are negligible. It was this elimination of the exemption for marginal wells specifically, which caused the anti-fracking group, Clean Air Task Force (CATF), to praise EPA.  As Politico reported yesterday after the decision was made official, The green group Clean Air Task Force praised EPA for removing an exemption for lower-producing wells from the draft guidelines it released earlier this year. The final version of the rules, still not officially posted on EPA’s website, seeks more data on those lower-producing wells before deciding how to proceed. “It’s critical that EPA move forward swiftly to close this loophole and ensure the guidelines provide comprehensive protection for communities across the country,” CATF advocacy director Conrad Schneider said. CATF, in their efforts to stop fracking across the country, specifically lobbied EPA to remove the planned exemption for marginal wells based on dubious science (more on that in a minute). The implications of this decision will not be marginal, however. Thousands of family-owned businesses across the country operate marginal wells — smaller wells that produce 15 barrels or less per day, or 90,000 cubic feet or less of natural gas per day. These businesses have faced the biggest challenges in today’s low commodity price environment; now under EPA’s rules many of these  small companies could essentially be wiped out . The Interstate Oil and Gas Compact Commission’s (IOGCC) released a report last year, which finds the loss of marginal oil and gas wells developed in 2015 would trigger an estimated direct loss of 57,560 jobs in the oil and gas sector and $4.4 billion in direct earnings within the survey’s 29 states. Yet this report actually only looks at “stripper wells,” which are wells producing 10 barrels or less per day and 60 thousand cubic feet or less of natural gas per day. So if you were to evaluate job and GDP losses from eliminating  all marginal wells , the impact would be even greater. According to National Stripper Well Association Chairwoman Darlene Wallace , “These new rules will cripple stripper and marginal well owners and operators, and on top of historically low oil prices, we are looking at total disaster. By requiring the addition of new costly equipment requirements and expensive leak detection the economics within the oil and gas industry as a whole will be fundamentally changed, severely and forever.” Rules will impose prohibitive costs on vulnerable small producers already struggling   Not only did EPA decide not to exempt marginal wells from its fugitive emissions program in the CTG, it is also requiring that producers install new pneumatic control technologies, even though the current ones on marginal wells aren’t typically active and therefore emissions are negligible. This will impose an enormous cost on small producers that will have little-to-no environmental benefit. EPA is also requiring the installation of vapor recovery units on all storage tanks. Many of these tanks are too old to implement new technologies, which means small producers will have to replace these tanks entirely – and the cost of doing so is prohibitive. As IPAA rightly stated in its comments to EPA , “marginal well facilities should be excluded from the scope of the CTG. Clearly, the burden of adding capture equipment – and certainly the burden of replacing storage vessels – cannot be readily borne by marginal well operations .” (emphasis added) EPA uses “unconventional” data, pushed by CATF and other activist groups, to justify decision In its comments to EPA, CATF quoted a study spearheaded by the Environmental Defense Fund (EDF),  Zavala-Araiza et. al , which CATF says shows that “lower producing wells can have significant emissions.” CATF would have you believe, counter-intuitively, that small sites can emit the same volume as larger sites. But  Zavala-Araiza et. al  actually changes the definition of “super-emitter” in order to make this claim.  The researchers of the study define “functional super-emitters” not as sites that emit a lot of methane but as sites where  a certain percentage  of that well’s methane may be leaking.  From the report: “We designed a conceptual framework that  functionally  defines superemitting sites as those with the highest proportional loss rates (methane emitted relative to methane produced).” It goes on to say, “[L]ower production sites (10−100 thousand standard cubic feet per day or Mcf/d) are almost twice as likely to be among the top 5% of emitters relative to sites with an order of magnitude higher rates of production (100−1000 Mcf/d) (Table 1). Not unexpectedly, however, the highest producing sites (>1000 Mcf/d) are 4−7 times more likely than other sites to be among the highest emitting 5% of sites. Consequently, the conventional definition of super-emitters would be biased toward the highest producing sites.” In other words, even the researchers themselves admit that what they are doing is not exactly conventional. A closer look at the data used in the EDF study demonstrates that marginal wells clearly represent a low component of the methane emissions universe. The above graphic shows that although a similar  percentage  of total production  can  emit from marginal wells when compared to high-producing wells,  actual emissions  from marginal wells are negligible. Having said that, however, even the above data on marginal wells from the study are highly questionable considering they indicate high emitting marginal wells leak  nearly half  of their extracted gas. This is unrealistic as no producer would continue operating a well that is losing half of its value. EPA’s about face EPA’s August 2015  draft regulations included a set of  control techniques guidelines (CTG)  that explicitly acknowledged that marginal operations would be exempt in EPA’s methane rule – or its New Source Performance Standard (NSPS) – on the basis of economic hardship and because emissions at marginal sites are “inherently low.” As EPA put it, “For purposes of this guideline, the emissions and programs to control emissions discussed herein would  apply to the collection of fugitive emissions components at a well site with an average production of greater than 15 barrel equivalents per well per day  (15 barrel equivalents), and the collection of fugitive emissions components at compressor stations in the production segment. It is  our understanding that fugitive emissions at a well site with low production wells are inherently low  and that many well sites are owned and operated by small businesses.  We are concerned about the burden of the fugitive emissions recommendation on small businesses, in particular where there is little emission reduction to be achieved . For the purposes of this guideline, fugitive emissions recommendations would  not apply to well sites that only contain wellheads .” ( p. 9-1 ; emphasis added) In December 2015, the Independent Petroleum Association of America (IPAA) and the American Exploration & Production Council (AXPC) cited that exact passage in its  official comments  to the EPA. “This recognition is entirely appropriate and accurate,” IPAA and AXPC wrote. The groups added that they “agree that a fugitive emissions program should not apply to facilities with only a single wellhead.” So how did the Administration, less than a year later, come to exactly the opposite conclusion? Thus far, EPA has claimed that “several commenters” had recommended not including low producing wells and, as the agency puts it, “Because we did not receive additional data on equipment or component counts for low production wells, we believe that a low production well model plant would have the same equipment and component counts as a non-low production well site.” But as the CTG clearly shows, it was EPA –  not commenters  – who had initially suggested marginal wells should be treated differently, and potentially even exempted from the agency’s methane rule.  The EPA claimed the industry didn’t adequately support its position, even though the industry was simply agreeing with what the EPA had already formulated! Data Integrity Concerns The Administration’s decision on marginal wells adds to growing concerns about its methane rules. A  report  last year by NERA Economic Consulting – which has performed analyses for the U.S. Department of Energy, among others – found that the methane rule was based on a single, flawed economic study  of the “social cost of methane.” The study was also  authored by individuals within the EPA . Additionally, calculations by Energy In Depth showed that President Obama’s broader methane mitigation strategy – which includes the EPA’s methane rule – would yield  only 0.0047 degrees Celsius of avoided warming  the end of the century. The EPA also projected hundreds of millions of dollars in benefits based on the value of natural gas that would be captured and sold as a result of the rule, but the value was based on natural gas prices being $4 per thousand cubic feet (mcf). The current average natural gas  price is nearly half that , or $2.16/mcf. Just weeks before rolling out the final methane rule, the EPA significantly  increased its estimates of methane emissions  from petroleum and natural gas systems. The EPA did not identify additional emissions, but simply began assuming that marginal wells had emissions profiles similar to those of higher producing wells. The EPA admitted that its emissions estimates “greatly increase” as a result of its new methodology, “ due to the activity data revision alone .” But as the EPA itself acknowledged last summer, marginal wells have “ inherently low ” emissions – even though the Administration now says otherwise. http://everythingshale.com/news/2016/october/21/obama-administration-sides-with-activists-on-methane-rule-moves-to-put-small-producers-out-of-business-1/ http://everythingshale.com/news/2016/october/21/obama-administration-sides-with-activists-on-methane-rule-moves-to-put-small-producers-out-of-business-1/ Fri, 21 October 2016 11:24:27 http://everythingshale.com/news/2016/october/21/are-surging-coking-coal-costs-a-boon-for-scrap-prices/ What links coking coal loading from Australian ports with ferrous scrap recycled in New Jersey, USA? And what does this connection mean for Turkey’s electric arc furnace mills? The inter-connectedness of steelmaking raw materials is currently there for all to see. Coking coal prices doubled in a month between mid-August and mid-September on a FOB Australia basis, and — after further mine disruption in Australia and with China’s government-enforced domestic coal production slowdown persisting — prices have risen further to above $240/mt FOB. This has brought the raw material global attention, and thrown steelmaking received wisdom out of kilter. Coal is now a more expensive input than iron ore in the integrated route, accounting for around 60% of the cost. Blast furnace mills (which make up the majority of mills globally and the vast majority in China and Commonwealth of Independent States countries) are consequently altering procurement mixes as best they can. This involves adding more scrap to their furnace burden, seeking higher-grade iron ore that reduces the coke rate in production and, of course, looking for stronger sales prices. This is good news for that New Jersey recycler, but it also has major implications for Turkey’s steelmakers; electric arc furnaces in Turkey run off a diet of ferrous scrap, and if more BF mills are buying scrap, supply is reduced. Turkey’s mills have procured as much blast furnace-produced billet as possible in the last year in order to reduce dependency on scrap, which has been relatively expensive compared to iron ore and coking coal up until 2016. Now Turkish producers are buying more competitive scrap, with export prices of billet from China rising to $332.50/mt FOB Tianjin, up $15/mt in 10 days, according to Platts assessment of the trade route. All of this upward pricing pressure comes at a time of traditionally weaker scrap supply — Q4. Scrap-based production has been around $20-$25/mt more competitive than the BF route, Turkish mill executives recently told Platts, and this was with coal procured substantially below current spot prices given the lag between procurement and consumption. But the spike in coking coal prices will prove a boon to scrap merchants, as integrated furnaces ramp up usage in their blast furnaces. One integrated steelmaker in Turkey has indicated it will move to a 20% scrap charge from below 10%, the Bureau of International Recycling said in its latest report. “The economics of this change is sound in my view and, if followed by other integrated mills internationally … this should change the dynamics of the supply/demand continuum for steel scrap worldwide,” William Schmiedel, president of the BIR ferrous division, said. Indeed, other mills seem to be increasing scrap as a proportion of their furnace burden. “We’ve started to charge more scrap in the blast furnace because the tipping point of coal is now so great. If we’re doing that, you can be sure the major integrated works are,” Ben Cunliffe, sales director for structural steel at British Steel, told Platts. “Demand for scrap across Europe and other regions has to increase over the next few weeks,” he added. The post Are surging coking coal costs a boon for scrap prices? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/21/are-surging-coking-coal-costs-a-boon-for-scrap-prices/ http://everythingshale.com/news/2016/october/21/are-surging-coking-coal-costs-a-boon-for-scrap-prices/ Fri, 21 October 2016 09:55:23 http://everythingshale.com/news/2016/october/21/are-surging-coking-coal-costs-a-boon-for-scrap-prices-1/ What links coking coal loading from Australian ports with ferrous scrap recycled in New Jersey, USA? And what does this connection mean for Turkey’s electric arc furnace mills? The inter-connectedness of steelmaking raw materials is currently there for all to see. Coking coal prices doubled in a month between mid-August and mid-September on a FOB Australia basis, and — after further mine disruption in Australia and with China’s government-enforced domestic coal production slowdown persisting — prices have risen further to above $240/mt FOB. This has brought the raw material global attention, and thrown steelmaking received wisdom out of kilter. Coal is now a more expensive input than iron ore in the integrated route, accounting for around 60% of the cost. Blast furnace mills (which make up the majority of mills globally and the vast majority in China and Commonwealth of Independent States countries) are consequently altering procurement mixes as best they can. This involves adding more scrap to their furnace burden, seeking higher-grade iron ore that reduces the coke rate in production and, of course, looking for stronger sales prices. This is good news for that New Jersey recycler, but it also has major implications for Turkey’s steelmakers; electric arc furnaces in Turkey run off a diet of ferrous scrap, and if more BF mills are buying scrap, supply is reduced. Turkey’s mills have procured as much blast furnace-produced billet as possible in the last year in order to reduce dependency on scrap, which has been relatively expensive compared to iron ore and coking coal up until 2016. Now Turkish producers are buying more competitive scrap, with export prices of billet from China rising to $332.50/mt FOB Tianjin, up $15/mt in 10 days, according to Platts assessment of the trade route. All of this upward pricing pressure comes at a time of traditionally weaker scrap supply — Q4. Scrap-based production has been around $20-$25/mt more competitive than the BF route, Turkish mill executives recently told Platts, and this was with coal procured substantially below current spot prices given the lag between procurement and consumption. But the spike in coking coal prices will prove a boon to scrap merchants, as integrated furnaces ramp up usage in their blast furnaces. One integrated steelmaker in Turkey has indicated it will move to a 20% scrap charge from below 10%, the Bureau of International Recycling said in its latest report. “The economics of this change is sound in my view and, if followed by other integrated mills internationally … this should change the dynamics of the supply/demand continuum for steel scrap worldwide,” William Schmiedel, president of the BIR ferrous division, said. Indeed, other mills seem to be increasing scrap as a proportion of their furnace burden. “We’ve started to charge more scrap in the blast furnace because the tipping point of coal is now so great. If we’re doing that, you can be sure the major integrated works are,” Ben Cunliffe, sales director for structural steel at British Steel, told Platts. “Demand for scrap across Europe and other regions has to increase over the next few weeks,” he added. The post Are surging coking coal costs a boon for scrap prices? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/21/are-surging-coking-coal-costs-a-boon-for-scrap-prices-1/ http://everythingshale.com/news/2016/october/21/are-surging-coking-coal-costs-a-boon-for-scrap-prices-1/ Fri, 21 October 2016 09:55:23 http://everythingshale.com/news/2016/october/21/consumer-interests-paramount-in-pending-fuels-policy/ The Renewable Fuel Standard, created a decade ago to strengthen U.S. energy security and benefit American consumers, is doing neither. The RFS is broken and should be repealed or significantly reformed with the interests of consumers the top priority . That's the message API Downstream Group Director Frank Macchiarola delivered during a conversation with a group of energy reporters this week. By law, EPA must announce how much ethanol will be mandated in the 2017 fuel supply by Nov. 30 under the RFS. Protecting consumers should be the agency's focus . Macchiarola reminded reporters that the RFS was created as a response to falling domestic energy production and rising crude imports circumstances that have been reversed thanks to America's energy renaissance and flat demand for gasoline. The market has shown that the (RFS) policy is outdated,†Macchiarola said. Macchiarola was joined by representatives of other groups with concerns about continued implementation of the RFS in its current form: the National Marine Manufacturers Association (NMMA) and the National Chicken Council (NCC). Macchiarola said there's bipartisan support in Congress for action on the RFS: There is a growing number of both Republicans and Democrats who understand that the (RFS) policy is broken and that there's a real opportunity to provide reform and that the blend wall and the encroaching breach of the blend wall could be that impetus for those (reforms).†NMMA's Michael Lewan said EPA would restrict choice for boaters, among whom zero-ethanol fuel is popular, because higher ethanol blends can damage marine engines. An EPA draft proposal would mandate ethanol at levels in the fuel supply that would limit E0 to about 200 million gallons compared to the 5.3 billion gallons the U.S. Energy Information Administration estimates were used in 2015. Lewin: They're denying consumers the choice our consumers the choice. … We can't use those mid- and high-level (ethanol) blends. So, on the one hand they're telling us we can't use the fuel that we can use, but we also cannot use the fuels that they are increasing in the marketplace.†The NCC's Tom Super said ethanol mandates impact corn prices, which then affects the cost of chicken feed. Though corn prices have moderated recently, Super said, We're only one freeze, flood or drought away from another disaster for our members.†At a minimum, EPA should use its waiver authority under the RFS to adjust its 2017 ethanol mandate down from levels that were written into law by Congress nearly a decade ago, while also ensuring that an adequate supply of E0 is available for consumers who want it. The concern is that EPA will mandate more ethanol in the U.S. fuel supply than can be safely absorbed as E10 gasoline, the country's standard fuel. Breaching the blend wall†could force more E15 fuel into the marketplace, fuel that studies have shown can damage vehicle engines and fuel systems . Macchiarola: We are not opposed to ethanol. We're opposed to the mandate. What we are saying is the whole purpose of mandates and incentives is typically policymakers wanting to boost a nascent technology or industry to be competitive in the marketplace. At what point is this mandate going to go away, and we're going to have a level playing field where people compete for the fuels that consumers use? … Our position is a free-market position that allows competition in the fuels market, and we believe that the RFS stands in the way of that.†Consumer interests, not ethanol interests, should be reflected in EPA's ethanol mandates even as Congress considers its next step. Consumers have weighed in, 77 percent of registered U.S. voters expressing concern about government requirements to increase ethanol in gasoline . It should guide policymakers and agency policy-crafters. Macchiarola: From our experience, it's one thing for groups in Washington, D.C., to sit around and talk about what's important for the American consumer. It's quite another when consumers are talking about what's important to the American consumer.†By Mark Green  Originally posted October 18 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/october/21/consumer-interests-paramount-in-pending-fuels-policy/ http://everythingshale.com/news/2016/october/21/consumer-interests-paramount-in-pending-fuels-policy/ Fri, 21 October 2016 09:00:26 http://everythingshale.com/news/2016/october/21/consumer-interests-paramount-in-pending-fuels-policy-1/ The Renewable Fuel Standard, created a decade ago to strengthen U.S. energy security and benefit American consumers, is doing neither. The RFS is broken and should be repealed or significantly reformed with the interests of consumers the top priority . That's the message API Downstream Group Director Frank Macchiarola delivered during a conversation with a group of energy reporters this week. By law, EPA must announce how much ethanol will be mandated in the 2017 fuel supply by Nov. 30 under the RFS. Protecting consumers should be the agency's focus . Macchiarola reminded reporters that the RFS was created as a response to falling domestic energy production and rising crude imports circumstances that have been reversed thanks to America's energy renaissance and flat demand for gasoline. The market has shown that the (RFS) policy is outdated,†Macchiarola said. Macchiarola was joined by representatives of other groups with concerns about continued implementation of the RFS in its current form: the National Marine Manufacturers Association (NMMA) and the National Chicken Council (NCC). Macchiarola said there's bipartisan support in Congress for action on the RFS: There is a growing number of both Republicans and Democrats who understand that the (RFS) policy is broken and that there's a real opportunity to provide reform and that the blend wall and the encroaching breach of the blend wall could be that impetus for those (reforms).†NMMA's Michael Lewan said EPA would restrict choice for boaters, among whom zero-ethanol fuel is popular, because higher ethanol blends can damage marine engines. An EPA draft proposal would mandate ethanol at levels in the fuel supply that would limit E0 to about 200 million gallons compared to the 5.3 billion gallons the U.S. Energy Information Administration estimates were used in 2015. Lewin: They're denying consumers the choice our consumers the choice. … We can't use those mid- and high-level (ethanol) blends. So, on the one hand they're telling us we can't use the fuel that we can use, but we also cannot use the fuels that they are increasing in the marketplace.†The NCC's Tom Super said ethanol mandates impact corn prices, which then affects the cost of chicken feed. Though corn prices have moderated recently, Super said, We're only one freeze, flood or drought away from another disaster for our members.†At a minimum, EPA should use its waiver authority under the RFS to adjust its 2017 ethanol mandate down from levels that were written into law by Congress nearly a decade ago, while also ensuring that an adequate supply of E0 is available for consumers who want it. The concern is that EPA will mandate more ethanol in the U.S. fuel supply than can be safely absorbed as E10 gasoline, the country's standard fuel. Breaching the blend wall†could force more E15 fuel into the marketplace, fuel that studies have shown can damage vehicle engines and fuel systems . Macchiarola: We are not opposed to ethanol. We're opposed to the mandate. What we are saying is the whole purpose of mandates and incentives is typically policymakers wanting to boost a nascent technology or industry to be competitive in the marketplace. At what point is this mandate going to go away, and we're going to have a level playing field where people compete for the fuels that consumers use? … Our position is a free-market position that allows competition in the fuels market, and we believe that the RFS stands in the way of that.†Consumer interests, not ethanol interests, should be reflected in EPA's ethanol mandates even as Congress considers its next step. Consumers have weighed in, 77 percent of registered U.S. voters expressing concern about government requirements to increase ethanol in gasoline . It should guide policymakers and agency policy-crafters. Macchiarola: From our experience, it's one thing for groups in Washington, D.C., to sit around and talk about what's important for the American consumer. It's quite another when consumers are talking about what's important to the American consumer.†By Mark Green  Originally posted October 18 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/october/21/consumer-interests-paramount-in-pending-fuels-policy-1/ http://everythingshale.com/news/2016/october/21/consumer-interests-paramount-in-pending-fuels-policy-1/ Fri, 21 October 2016 09:00:26 http://everythingshale.com/news/2016/october/21/schlumberger-targets-texas-growth-with-rig-of-the-future/ The chief executive of the world’s largest energy services company said Friday that  two of the  new rigs are starting operations in the United States  this year to unleash greater depths of directional drilling and access more oil reservoirs from single locations. Schlumberger Chief Executive Paal Kibsgaard refers to these longer horizontal laterals drilled as “super laterals.” The growth target is in Texas’ Permian Basin. We now have a clear path to profitability on North American land with the technology uptick we're seeing,” Kibsgaard said. This is why we're prepared to put more capacity into place for what's happening in West Texas.†During the oil bust, Schlumberger grew its market share internationally while the second-largest services company, Halliburton, increased its share in the United States.. Now that Kibsgaard believes the industry has passed the bottom of the oil bust, Schlumberger aims  to grow in North America  with its new technology. Two pilot projects using the  “rig of the future” pilot will roll out this year, while Kibsgaard said fully completed versions will come out in 2017. Kibsgaard said he believes the oil bust has bottomed out everywhere except Asia and in certain segments of deepwater activity. He’s projecting solid growth next year in North American land, the Middle East and in Russia. In the third quarter, Schlumberger’s onshore North American revenue grew by 14 percent from the second quarter. Schlumberge, which has its  has its principal offices in Paris, Houston, London and The Hague, maintained its global workforce at about 100,000 employees the past three months after axing about 50,000 jobs in 18 months during the worst oil bust in 30 years. In April,  Schlumberger in April finalized its purchase the Houston company Cameron International, which added close to 20,000 jobs worldwide, including about 4,000 in the Houston area. Some of those positions, however were susceptible to job cuts in the second quarter. Schlumberger has not disclosed in which divisions and locations the layoffs took place. Schlumberger's reported a $176 million net gain in the third quarter overall, which compares to a much larger $989 million profit during the same time last year.  Schlumberger posted a $2.16 billion loss during the second quarter of this year. Schlumberger's revenues of $7.02 billion stayed largely in line with last quarter's $7.16 billion, but still down from last year's $8.47 billion during the same time period. Comments comments http://everythingshale.com/news/2016/october/21/schlumberger-targets-texas-growth-with-rig-of-the-future/ http://everythingshale.com/news/2016/october/21/schlumberger-targets-texas-growth-with-rig-of-the-future/ Fri, 21 October 2016 08:53:11 http://everythingshale.com/news/2016/october/21/shell-selling-canadian-shale-assets-for-1-billion/ Royal Dutch Shell has agreed to sell off Canadian shale assets to Tourmaline Oil for $1.04 billion, its latest in a string of transactions aimed at shedding assets to make room for its recently acquired BG Group. Shell’s 206,000 net acres in Western Canada produce 25,000 barrels of oil equivalent a day, about 85 percent natural gas. Shell said the deal could close in the fourth quarter. The Anglo-Dutch oil major plans to sell off $30 billion in assets as it integrates British gas producer BG Group into its corporate fold. It bought BG Group for about $50 billion earlier this year. Houston investment bank Tudor, Pickering, Holt & Co. said it believes the rest of Shell’s assets in Western Canada would be worth about $2 billion if oil prices reach $70 a barrel and natural gas prices rose. Comments comments http://everythingshale.com/news/2016/october/21/shell-selling-canadian-shale-assets-for-1-billion/ http://everythingshale.com/news/2016/october/21/shell-selling-canadian-shale-assets-for-1-billion/ Fri, 21 October 2016 08:12:52 http://everythingshale.com/news/2016/october/21/oil-holds-near-50-as-investors-weigh-production-agreement/ December futures were little changed in New York after declining 2.3 percent Thursday. Russia's output could increase to a record next year, Energy Minister Alexander Novak said, adding the plan could be adjusted depending on talks with OPEC. President Vladimir Putin previously pledged his support to efforts by OPEC to limit output. Front-month prices are still heading for a fifth weekly gain after U.S. crude stockpiles dropped to the lowest level since January. Oil has fluctuated near $50 a barrel amid uncertainty about whether the Organization of Petroleum Exporting Countries will be able to implement an accord to reduce output when they gather at an official meeting in November. An OPEC committee will meet later this month to try to resolve differences over how much individual members should pump. Nigeria said it cut the price of every type of crude it sells in an effort to boost its market share. No co-operation†is foreseeable between Russia and OPEC, said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. It's not in Russia's economic interests.†West Texas Intermediate for December delivery was at $50.90 a barrel on the New York Mercantile Exchange, up 27 cents, at 1:06 p.m. in London. The contract fell $1.19 to $50.63 on Thursday. Total volume traded was about 26 percent below the 100-day average. The November future expired Thursday down 2.3 percent at $50.43 a barrel. Brent for December settlement rose 37 cents to $51.75 a barrel on the London-based ICE Futures Europe exchange. The contract on Thursday declined $1.29 to $51.38. Prices are down 0.9 percent this week. The global benchmark traded at a  premium of 86 cents to WTI. Comments comments http://everythingshale.com/news/2016/october/21/oil-holds-near-50-as-investors-weigh-production-agreement/ http://everythingshale.com/news/2016/october/21/oil-holds-near-50-as-investors-weigh-production-agreement/ Fri, 21 October 2016 08:05:43 http://everythingshale.com/news/2016/october/20/expert-says-oklahoma-s-efforts-to-address-induced-seismicity-are-working/ One of the foremost experts on Oklahoma seismicity spoke at a webinar this week for Resources for the Future, highlighting the fact that the steps producers and regulators are taking to address induced seismicity in certain areas of the Arbuckle formation are working. As Stanford geophysicist Mark Zoback said, “Things are subsiding. The earthquake rate is already heavily down even after six months of reduced injection rates.” The U.S. Geological Survey announced in late August of this year that the state has seen a 22 percent decrease in magnitude 3.0 or greater earthquakes since the same time period in 2015. A recent EID review of Oklahoma Geological Survey data found 2.8M and greater earthquakes in Oklahoma were down 52 percent between January and April of this year and 55 percent since a June 2015 peak. These reductions come after the Oklahoma Corporation Commission (OCC) last year implemented a new set of requirements in certain “ Areas of Interest ,” focusing on injections below the Arbuckle formation. The directive required operators to prove they were not injecting below that zone, or reduce disposal volumes by 50 percent. The state recently expanded that directive , and committed an additional $200,000 to help regulators respond to concerns about earthquakes. This yielded a shut in of 90 wastewater disposal wells and reduced disposal volumes on an additional 250 wells. As a result, the Oklahoma Geological Survey (OGS) has reported about a million fewer barrels per day of wastewater is being injected into Arbuckle wells as of this past spring. Of course, it’s important to point out that reducing volumes is not inexpensive, and the extra costs have had a whole host of economic impacts on small businesses, local job opportunities, and tax revenue in Oklahoma. Zoback emphasized that induced seismicity in the state may not cease overnight but the steps producers are taking will continue to yield results, “It’s going to take a few years for the system to come back to the background rate of natural earthquakes, so it’s not going to be overnight. But it’s certainly the right thing to do and will have a beneficial effect over time.” And, as he has and many other experts have done before , Zoback explained that “ it’s the disposal of very large amounts of produced salt water that is driving the Oklahoma seismicity” rather than the hydraulic fracturing process or the disposal of fracking fluid — both of which many media outlets have incorrectly blamed . “Basically, it is not hydraulic fracturing and it’s not hydraulic fracturing flowback water. It’s produced water,” Zoback said. Zoback also noted that just a handful of instances where earthquakes were linked to injection of fracking flowback water — all outside of Oklahoma — and earthquakes linked to the fracking process are extremely rare and even more rarely felt. “These are magnitude minus one to minus three, which means slip is occurring on a fault that is about a meter in size and about a tenth of a millimeter of slip occurs. And the energy released is on the order of a gallon of milk falling off a kitchen counter and hitting the floor, so you don’t even know what’s happening unless you put seismometers at depth and it’s not consequential.” Zoback also noted that wastewater injection has not rendered any permanent geological damage in Oklahoma, dispelling another myth perpetuated by fossil fuel opponents who have suggested an all-out ban on produced water injection. “We’re releasing earthquakes that would have occurred naturally. We’re not really damaging the (geological) system.” http://everythingshale.com/news/2016/october/20/expert-says-oklahoma-s-efforts-to-address-induced-seismicity-are-working/ http://everythingshale.com/news/2016/october/20/expert-says-oklahoma-s-efforts-to-address-induced-seismicity-are-working/ Thu, 20 October 2016 17:07:03 http://everythingshale.com/news/2016/october/20/schlumberger-reports-profit-no-more-job-cuts/ Schlumberger maintained its global workforce at about 100,000 employees after axing about 50,000 jobs in 18 months during the worst oil bust in 30 years. “After calling the bottom of the cycle in the second quarter of this year, our business stabilized in the third quarter,” Schlumberger Chairman and CEO Paal Kibsgaard said in a prepared statement late Thursday. Schlumberger’s $176 million net gain compares to a much larger $989 million profit during the same time last year. However, Schlumberger posted a  $2.16 billion loss during  in the second quarter. Schlumberger’s revenues of $7.02 billion stayed largely in line with last quarter’s $7.16 billion, but still down from last year’s $8.47 billion during the same time period. Kibsgaard said the global oil market is “now more or less balanced” on supply-and-demand fundamentals as  production levels  decline and world works through the oil glut.  He particularly referenced crude storage level declines in recent weeks in the United States. “We maintain that a broad-based V-shaped recovery is unlikely given the fragile financial state of the industry, although we do see activity upside in 2017 in North America land, the Middle East and Russia markets,” he added. “We are therefore ensuring that we are optimally positioned to capture a large share of this upside that we can subsequently turn it into positive earnings contributions.” The energy services giant has its principal offices in Paris, Houston, London and The Hague. Schlumberger in April finalized its purchase of Houston-based Cameron International, which added close to 20,000 jobs worldwide, including about 4,000 in the Houston area. However, some of those positions were susceptible to job cuts in the second quarter. Comments comments http://everythingshale.com/news/2016/october/20/schlumberger-reports-profit-no-more-job-cuts/ http://everythingshale.com/news/2016/october/20/schlumberger-reports-profit-no-more-job-cuts/ Thu, 20 October 2016 15:33:04 http://everythingshale.com/news/2016/october/20/gastar-to-develop-wells-sell-other-acreage-in-oklahoma/ With the agreement, Houston-based Gastar and its private investor will develop 60 wells in Kingfisher County, part of a region northwest of Oklahoma City referred to in the industry as the STACK play. A company statement only describes the investor as a “large private global development fund.” RELATED:  What it takes to make money with $50 a barrel oil Gastar has 18,000 acres of undeveloped mineral leases in the area where the company will develop the wells. Gastar and its investor have agreed on locations for the first 20 wells, according to a company statement. The company also announced on Thursday that it has agreed to sell noncore leases in Kingfisher and Canadian counties for $71 million. The area being sold is about 19,100 acres that produces 181 barrels of oil equivalent per day. Proceeds from the sale will go toward other capital expenditures, according to a company statement. Comments comments http://everythingshale.com/news/2016/october/20/gastar-to-develop-wells-sell-other-acreage-in-oklahoma/ http://everythingshale.com/news/2016/october/20/gastar-to-develop-wells-sell-other-acreage-in-oklahoma/ Thu, 20 October 2016 15:29:20 http://everythingshale.com/news/2016/october/20/former-greenpeace-boss-rebukes-keep-it-in-the-ground-calls-fracking-the-answer-for-climate/ A former head of Greenpeace made headlines this week when he rebuked his former colleagues’ “Keep-It-In-The-Ground” platform by noting that hydraulic fracturing was “part of the answer” for climate change. Stephen Tindale, a former Greenpeace executive director from 2000 to 2005, who identified himself as a lifelong green, said , “Fracking is not the problem…but a central part of the answer.” Speaking about a newly approved shale gas project in Lancashire, Tindale continued , “And if activist groups including Greenpeace really want to help the environment, they should stop protesting about projects like this and let them be built as quickly as possible.” Of course, the UK only has to look across the pond to the United States where increased availability and use of natural gas for electricity generation has enabled Americans to reduce their greenhouse gas emissions significantly. As Vice Presidential candidate Tim Kaine (D-Va.) has explained, “We’ve been improving our emissions in this county without agreeing to the Kyoto accords, without Congressional action because of innovation form the natural gas area.” The Intergovernmental Panel on Climate Change (IPCC) has also pointed to natural gas having a key role in the United States’ emissions reduction . According to the IPCC’s Fifth Assessment Report , “[T]he rapid deployment of hydraulic fracturing and horizontal-drilling technologies, which has increased and diversified the gas supply…is an important reason for a reduction of GHG emissions in the United States.” As EID reported earlier this year, growth of the natural gas sector has also helped the U.S. secure its energy supply and to reduce prices overall for domestic consumers. According to data from the EIA , lower oil and natural gas prices have led to a reduction in household energy costs to levels not seen since the 1980s . The EIA reports, “While both U.S. natural gas consumption and production have increased in recent years, natural gas production has grown slightly faster, resulting in a decline in net imports. Increasing domestic production of natural gas has reduced U.S. reliance on imported natural gas and kept U.S. natural gas prices relatively low.” Tindale’s background as a Greenpeace leader and environmental advocate show just how extreme anti-fracking groups like Greenpeace – who want to stop the one fuel that’s achieving real results in emission reductions – actually are.   http://everythingshale.com/news/2016/october/20/former-greenpeace-boss-rebukes-keep-it-in-the-ground-calls-fracking-the-answer-for-climate/ http://everythingshale.com/news/2016/october/20/former-greenpeace-boss-rebukes-keep-it-in-the-ground-calls-fracking-the-answer-for-climate/ Thu, 20 October 2016 14:44:12 http://everythingshale.com/news/2016/october/20/fmc-technologies-pays-25-million-fine-to-settle-charges-it-overstated-profits/ The SEC alleged that  FMC, an energy equipment maker, pressured  its energy infrastructure segment to improve financial performance. The business segment’s controller, Jeffrey Favret, and an employee who reported to him, Steve Croft, reduced the company’s costs for employee time off by $800,000, according to the SEC. Croft later switched to a new accounting system that overstated its earnings in early 2014, regulators alleged. Companies must accurately report their financial performance,” said Stephanie Avakian, deputy director of the SEC's enforcement division, in a statement. “Favret and Croft manipulated results to create the impression that the business was performing better than reality.†FMC did not immediately respond to a request for comment. Last month, oilfield services company Weatherford International agreed to pay a $140 million penalty to settle charges that it inflated its profits through deceptive accounting practices. The SEC alleged that Weatherford executives committed intentional fraud - not gross negligence - in the commission's largest case of financial fraud this year. Weatherford allegedly overstated its earnings by nearly $1 billion from 2007 to 2012 and had virtually no oversight over its tax department, according to the SEC. Weatherford’s accounting firm, Ernst & Young, agreed to an $11.8 million fine this week for its role in the fraud. As for FMC,  Favret and Croft settled the SEC charges without admitting or denying the allegation and  accepted $30,000 and $10,000 penalties, respectively, regulators said.  They left the company in 2014. Comments comments http://everythingshale.com/news/2016/october/20/fmc-technologies-pays-25-million-fine-to-settle-charges-it-overstated-profits/ http://everythingshale.com/news/2016/october/20/fmc-technologies-pays-25-million-fine-to-settle-charges-it-overstated-profits/ Thu, 20 October 2016 14:18:34 http://everythingshale.com/news/2016/october/20/colorado-cd-6-debate-night-where-do-the-candidates-stand-on-fracking/ Against a backdrop of recently leaked emails showing that the Clinton campaign saw opposition to fracking as a losing issue with Colorado voters, incumbent Republican Congressman Mike Coffman is scheduled to appear with his Democratic challenger for Colorado’s 6 th congressional district, Morgan Carroll, tonight in a closely watched debate for what is widely considered to be one of the most competitive races in the country. If the previous debate hosted by Denver’s 9 News for the U.S. Senate candidates is any indication , Coffman and Carroll will likely be asked where they stand on fracking. Here is what we know: Republican Mike Coffman When it comes to oil and natural gas development, Coffman has a record of joining bipartisan opposition to ballot initiatives that would ban fracking in Colorado. For example, in 2014, when a pair of initiatives backed by Congressman Jared Polis threatened to ban fracking in the state, Coffman joined Democrats like then-U.S. Senator Mark Udall and even Andrew Romanoff, his Democrat challenger in speaking out against the measures. As Fox 31 reports : “Breakthrough advances in energy development have America racing toward energy independence,” said Coffman in a statement. “As a combat veteran myself, I know that means we’ll need fewer combat veterans in the future. I fear Jared Polis’s fracking ban initiatives would undermine Colorado’s contribution to the nation’s energy policy. Democrat Morgan Carroll Carroll has taken a hawkish stance against oil and natural gas development. As a state Senator, Carroll teamed up with Conservation Colorado to roll-out their “Coming Soon Arapahoe” campaign launched to turn public opinion, in and around CD-6, against oil and natural gas development. The environmental group’s scare tactics drew a strong rebuke from Arapahoe County Commissioner Nancy Sharpe: “Following the collapse of the Don’t Frack Denver campaign, Arapahoe County appears to be the next victim of the anti-fracking movement.  Another group, Conservation Colorado, targeted our county by releasing a map aimed at scaring Arapahoe County residents into thinking drilling was arriving in their backyard at any moment.” More recently, Carroll sponsored a bill in the Colorado legislature that  “would hold oil and gas drillers liable for any earthquakes.” The measure ultimately failed, but not before a coalition representing economic development and public policy interests  published a letter in the Denver Business Journal , raising serious issues with the proposal. From the letter : “The premise of the bill, that energy development triggers earthquakes, has not been scientifically proven.” The group went on: “Colorado does not and has not experienced frequent earthquakes; this legislation plays on unfounded fears to the express detriment of an environmentally-conscious industry that employs tens of thousands of our fellow Coloradans. By singling out this industry, it chills the business environment at a time when the industry already is shedding jobs.” Top Colorado and National Democrats Reject Calls for Banning Fracking Fracking has certainly been a key issue in Colorado’s political contests. During a recent debate between the state’s Democrat senator Michael Bennet and his Republican challenger, El Paso County Commissioner Darryl Glenn, 9 News moderators asked for a yes or no answer to the question “Should local governments in Colorado be able to ban fracking with voter approval?” As video of the debate shows, Bennet answered unequivocally: “No” Bennet’s opposition to local fracking bans comes on the heels of recently leaked emails revealing that Hillary Clinton’s campaign viewed primary election ads running in Colorado that highlighted Bernie Sanders’ ban-fracking agenda, as “extreme,” “unfeasible” and “irresponsible.” In other words, the Clinton campaign clearly recognized that an anti-fracking platform will not sell with Colorado voters.  From the  emails : “What does that mean? A complete 100% fracking ban. There is no elected dem and I believe no enviro group that takes this position. In fact, such an extreme position threatens the progress of common-sense safety measures like frack fluid disclosure and methane capture/air quality regulations.” Those points were reiterated in what is apparently  a draft statement  highlighting the economic and climate benefits of fracking proposed as a response to Sander’s ad: “Bernie’s call for banning all hydraulic fracturing is, extreme, unfeasible and ignores the contribution natural gas has made to our economy and our efforts to reduce carbon pollution.” Back in Colorado, the state’s leading Democrats have long-recognized the importance of energy development. Colorado’s Democrat governor, John Hickenlooper has been a stalwart supporter of oil and natural gas development, and a leader against ballot initiatives aimed at driving fracking out of the state. So with the candidates for CD-6 set to appear in a televised debate later this evening, it is certain that the district’s residents, many of whom work in the energy industry, will want to know whether the candidates stand with fracking supporters like Hillary Clinton and Michael Bennet, or with the extreme “Keep It In The Ground” agenda of Bernie Sanders. http://everythingshale.com/news/2016/october/20/colorado-cd-6-debate-night-where-do-the-candidates-stand-on-fracking/ http://everythingshale.com/news/2016/october/20/colorado-cd-6-debate-night-where-do-the-candidates-stand-on-fracking/ Thu, 20 October 2016 13:46:18 http://everythingshale.com/news/2016/october/20/market-currents-nigerian-oil-exports-rebounding/ 1) Yesterday’s EIA inventory report yielded a large counter-seasonal draw to crude stocks, even though refinery maintenance is likely at its peak. Imports not only dropped off from Canada, but also to all three coastal PADDs (1,3 & 5). West coast crude oil inputs reached their lowest level since April 2012 (hark, below), depressing the need for crude imports. 2) With lower refinery utilization, less crude is being needed by refineries. Yesterday’s EIA report showed PADD5 imports of 751,000 bpd last week. This is the lowest level since April 2013. Our ClipperData show the leading suppliers to the West Coast this year. While Ecuador is the second-largest supplier, sending medium sour Oriente and heavy sour Napo grades, Saudi Arabia is leading the way in terms of volume. But as our ClipperData illustrate , imports from Saudi Arabia have dropped right off this month, with just one delivery: 1,065,000 bbls of Arab Extra Light to Chevron’s El Segundo refinery. Monthly deliveries of Arab Light and Arab Medium have made their way to the West coast for fifteen consecutive months, but here we are, two-thirds of the way through October, and neither grade has been discharged yet. 3) While concerns swirl about Chinese output, the latest data from the National Bureau of Statistics show that producers have managed to stop the rot in September. As the chart below illustrates, Chinese production volumes managed to stabilize last month at 3.9mn bpd, ticking slightly higher than August’s level. That said, output is still 9.8 percent lower on year-ago levels , down ~400,000 bpd. Refining activity also rose last month, up 2.4 percent to 10.7mn bpd. 4) The boys are back in town! Troubled Nigerian grades, which have spent much of this year in and out of force majeure, are finally seeing a turnaround in our ClipperData  thus far this month. After being completely absent in September, Qua Iboe loadings are seeing a return to form, while Brass River, Escravos and Forcados are all up on last month’s loading volumes. Bonny Light, however, has shrunk to a new low for the year. The worst supply losses could be in the rear-view mirror for Nigeria. Now that flows are returning, however, the country’s national oil company, NNPC, is slashing the price of its oil to boost sales and regain market share . Qua Iboe has been reduced by the most since 2014, while the majority of grades have had their OSP (official selling price) lowered by at least $1/bbl . 5) While much has been made of how low oil prices have dented Saudi’s revenues, the charts below from EIA show the detrimental impact on Russia – and how weakness in the ruble has helped to offset this. But while lower oil prices have crimped Russian revenues, Russian oil and gas companies have been less affected, given that lower tax rates have been paid due to lower crude prices. This has meant that the likes of Rosneft and Lukoil – Russia’s two largest producers – have not had to slash their budgets like other large global producers have. In fact, Rosneft in 2015 boosted its capex on exploration and production by 30 percent versus the previous year, while capex in the first half of 2016 was 33% higher than in the first half of 2015. Lukoil's declined by 11 percent in 2015 compared to 2014, but is just 2 percent lower 1H 2016 compared to 1H 2015. As strong investment continues, Russian oil production has reached post-Soviet era highs , and is expected to continue growing in the coming years as new projects come online. Comments comments http://everythingshale.com/news/2016/october/20/market-currents-nigerian-oil-exports-rebounding/ http://everythingshale.com/news/2016/october/20/market-currents-nigerian-oil-exports-rebounding/ Thu, 20 October 2016 12:40:23 http://everythingshale.com/news/2016/october/20/us-companies-know-the-risks-of-climate-change-should-they-be-required-to-report-them/ The Sustainability Accounting Standards Board released a report on Wednesday  saying climate change will affect 72 of 79 U.S. industries and cost U.S. companies more than $27 trillion — 93 percent of the U.S. equity market. In the report, former Treasury secretaries Henry Paulson and Robert Rubin call climate change “the single biggest economic risk the world faces today,†and chide U.S companies and the Securities and Exchange Commission for disclosing those risks “poorly, if at all.” In July, Paulson, a Republican, and Rubin, a Democrat, sent a letter to the SEC, urging it to enforce “mandatory and meaningful disclosures of the material effects of climate change on issuers.” At the same time, 45 investors representing $1.1 trillion in assets, including CalPERS, the largest public pension fund in the United States, also asked the SEC to require companies to more thoroughly assess and disclose financial risks from global warming. In Tuesday’s report, the San Francisco-based Sustainability Accounting Standards Board said climate impacts are so widespread, investors cannot “diversify away” from the risks. Paulson and Rubin called the report the first comprehensive guide to understanding and measuring the impacts of climate change across industries. Comments comments http://everythingshale.com/news/2016/october/20/us-companies-know-the-risks-of-climate-change-should-they-be-required-to-report-them/ http://everythingshale.com/news/2016/october/20/us-companies-know-the-risks-of-climate-change-should-they-be-required-to-report-them/ Thu, 20 October 2016 11:22:25 http://everythingshale.com/news/2016/october/20/better-batteries-and-more-electric-cars-could-be-bad-news-for-oil-industry/ More than half of the world’s oil use comes from cars, and the oil industry is already reeling from an oil glut.  While the price of oil has drastically fluctuated in 2016, the Fitch report,  the industry faces a longer-term threat. If battery technology makes an unexpected leap forward,  the industry will feel the effects before the adoption of electric cars spike, with global oil demand peak sooner than the 2030s, as many analysts predict. In addition to making electric cars more practical and attractive to consumers, advances in battery technology could expand the role of intermittent renewable sources, such as wind and solar, in the power grid. The report predicts that the number of electric vehicles on the road will increase slowly, in part because today’s cars  can last up to 20 years. Even if global electric car sales were to grow by more than 30 percent a year,  it would still take 20 years for the vehicles to to account for a quarter of the world’s cars, according to Fitch. Nonetheless, Fitch said, the adoption of electric cars could affect oil companies sooner than expected, although the report did not give a timeline. The solution is for oil and gas companies is to diversify their energy businesses,  which some firms are already doing. In the report, Fitch urged companies to invest in battery technology and renewables or  focus more on natural gas. Fitch Ratings is owned by Hearst Corp., which owns the Houston Chronicle.   Comments comments http://everythingshale.com/news/2016/october/20/better-batteries-and-more-electric-cars-could-be-bad-news-for-oil-industry/ http://everythingshale.com/news/2016/october/20/better-batteries-and-more-electric-cars-could-be-bad-news-for-oil-industry/ Thu, 20 October 2016 11:18:56 http://everythingshale.com/news/2016/october/20/steel-daggers-fly-once-again-at-clinton-trump-debate/ The resilience of steel is well-known — even as a presidential debate zinger. Hillary Clinton got two steely jabs in Wednesday night, once again chiding Donald Trump for running an America First campaign after constructing his buildings with Chinese steel and aluminum, the latter clearly riding steel’s ferrous coattails onto the national political stage. Metals were the only commodities debated in the third and final campaign confrontation. There was no discussion of past political footballs like coal, oil, natural gas or even the price of gasoline. It was the second debate in which the issue of Chinese steel was raised. Both times Trump brought a Clinton cudgel onto himself. In the October 9 debate, he opened himself up by bemoaning the damage done to the US steel industry and its employees by dumped Chinese steel. Clinton countered, decrying Trump’s use of said steel. In Wednesday’s debate, Trump brought up the subject again , bemoaning the decline of American manufacturing. “Our product is pouring in from China, pouring in from Vietnam, pouring in from all over the world,” he said. Clinton shot back: “He mentioned China. And, you know, one of the biggest problems we have with China is the illegal dumping of steel and aluminum into our markets. I have fought against that as a senator. I’ve stood up against it as secretary of state.” Clinton then reiterated that she plans to enforce America’s trade agreements and have a “trade prosecutor” for the first time in US history. She said her administration would also encourage US businesses to buy more American-made products. Trump shot back: “Let me ask a simple question. She’s been doing this for 30 years. Why the hell didn’t you do it over the last 15, 20 years?” And then this: Trump again challenged Clinton to stop him before he imported Chinese steel again: “For 30 years, you’ve been in a position to help, and if you say that I use steel or I use something else, I — make it impossible for me to do that. I wouldn’t mind. The problem is, you talk, but you don’t get anything done, Hillary.” With northern US states like Pennsylvania, Ohio and Indiana — steelmakers all — so critical to this year’s election, it is understandable why Trump would repeatedly bring up the issue of unfairly traded imports, even at the risk of being slammed again by Clinton on his trade hypocrisy. While Wednesday night’s National Conversation was universally praised as the best Clinton-Trump debate of the three, Trump continued to interrupt Clinton as she spoke, repeatedly inserting “Wrong!” as she made her arguments. But Clinton got in the best zinger of the night after Trump waxed poetic pondering her ties to Wall Street: “I sat in my apartment today in a very beautiful hotel down the street known as Trump…” Clinton: “Made with Chinese steel!” It seems steel is not just resilient. It’s recyclable too.   Platts news and news analysis is independent, objective and neutral. The post Steel daggers fly once again at Clinton-Trump debate appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/20/steel-daggers-fly-once-again-at-clinton-trump-debate/ http://everythingshale.com/news/2016/october/20/steel-daggers-fly-once-again-at-clinton-trump-debate/ Thu, 20 October 2016 10:38:51 http://everythingshale.com/news/2016/october/20/how-iran-s-involvement-in-yemen-could-draw-america-into-the-war/ Along with Iran’s heightened anti-American rhetoric and local naval deployments, the recent Houthi missile attacks against U.S. vessels raise fears that Tehran’s clients may take the war into a new and more dangerous phase. As the Yemen war enters its twentieth month, the fighting has escalated beyond the country’s confines, with Iranian-backed Houthi rebels firing what appeared to be Iranian antiship cruise missiles at foreign vessels operating around the Bab al-Mandab Strait. The U.S.-flagged, Emirati-operated supply ship Swift was struck on October 1, and U.S. Navy ships were unsuccessfully targeted in subsequent days. In response, U.S. forces struck Houthi-controlled portions of Yemen’s coast, destroying three surveillance radars of undisclosed type that were reportedly active during the missile attacks. While U.S. military sources have yet to confirm the type of weapons fired at their ships, the prime suspect is the C-802 Noor, a cruise missile system that Iran has reportedly provided to its traditionally anti-American Houthi clients. Two other possibilities cannot be ruled out yet. The first is the C-801, an older cruise missile in the Yemeni navy’s arsenal, which could have fallen into rebel hands given that the Houthis are allied with former elements of the country’s armed forces and have taken over significant territory. The second is a converted version of the S-75 (SA-2) surface-to-air missile. Since 2015, a majority of Yemeni radar and air-defense systems have been attacked and rendered useless by the Saudi-led coalition’s airpower due to fears that they would be employed by the Houthis or their allies. In January, however, IHS Jane’s reported that forces opposing the Yemeni government had converted at least some S-75s to strike at surface targets at significant ranges. These same weapons could theoretically have been used in the recent antiship attacks. Whatever the case, the threat that Houthi antiship missiles pose to international shipping is real. And while Iran may have sent C-802 missiles to the rebels well before the current war began in 2015, it could still further help the Houthis improve their tactics, equipment, and targeting effectiveness by supplying them with other systems and expertise. To be sure, such transfers would be a difficult task under the current circumstances — unlike with other regional militia clients such as Hezbollah, Iran does not presently have a known, direct line of supply to the Houthis, and the coalition has reportedly seized several dhows carrying sporadic shipments of Kornet antitank missiles and other weapons for the rebels. A supply route via the Suez Canal and northeastern Africa might be more practical, though still problematic. And unlike in Syria, Iran can no longer supply the Houthis by air either. In April 2015, Saudi fighter jets prevented an Iranian plane carrying passengers and cargo from landing at Sana airport, and no Iranian aircraft have been permitted to land in Houthi-controlled territory ever since. Additionally, transporting potent antiship missile systems typically requires a decent-size cargo vessel, if only to better conceal the illicit arms. In March 2011, for example, Israeli forces in the Mediterranean Sea captured the 17,000-ton ship Victoria, whose cargo included six C-704 Nasr antiship missiles, two launchers, and two British-made maritime radars complete with hydraulic mountings. The Iranian missiles were intended to be offloaded in Alexandria, Egypt, transferred by land through the Sinai, and eventually delivered to Hamas in Gaza. The Nasr has a 130-kilogram warhead and is smaller than the C-802, but easier to transport and operate, and reportedly more effective. With a range of around thirty-five kilometers — long enough to reach almost any part of the Bab al-Mandab Strait — it can reportedly sink a 1,000-ton ship. Iran’s Zafar antiship missile has similar capabilities. The Nasr family also includes an electro-optically (EO) guided version, Nasr-e Basir. Besides the Nasr and various C-802 derivatives (e.g., the Noor, Ghader, and Ghadir, with claimed ranges of 120, 200, and 300 kilometers, respectively), Iran also operates the lighter and shorter-range Kosar class of EO/radar-guided missiles with ranges of 15 to 25 kilometers. EO-guided weapons can be more difficult to counter, and if they enter the Yemen war, they could be fired at U.S. ships with little or no warning. HEATING UP THE RHETORIC Even as U.S. ships are being targeted in the Bab al-Mandab, Iran has been ratcheting up its rhetoric against the American role in Yemen. On October 10, senior Islamic Revolutionary Guard Corps figure Gen. Amir Ali Hajizadeh accused the United States of running the war, calling it a Hebrew-Arab-Western conspiracy to destroy the Yemeni people. This position was echoed by influential hardliner Ahmad Khatami three days later during Friday prayers in Tehran, traditionally a de facto outlet for expressing Iran’s foreign policy posture. Meanwhile, on October 5, the Iranian navy sent its 44th antipiracy task force to the Gulf of Aden, where it will also monitor Western and coalition naval activities. The force includes the Vosper-class Alvand (71) frigate armed with Noor antiship missiles. The U.S. Navy deployed its own task group to the Bab al-Mandab on October 3, right after the Swift attack. The missile attacks against the American ships did not start until after a deadly Saudi airstrike hit a memorial service in Sana five days later, killing and wounding hundreds of people, reportedly including high-ranking Houthi commanders. The timing of the initial missile attacks suggests they were revenge strikes against the highest-value targets at hand, which happened to be U.S. vessels (the Houthis also fired Scud missiles toward the Saudi city of Taif that same night). Yet the fact that missile attacks reportedly continued days later could mean that the Houthis are also pursuing tactical objectives by attacking American warships. In an October 13 story in the Iranian outlet Fars News, rebel leader Abdul-Malik al-Houthi claimed that the U.S. counterstrikes on Yemeni mobile radar sites were Washington’s way of “preparing the ground for an aggression against the port city of Hodeida,” the second-largest Houthi stronghold in Yemen. He reportedly called for “resisting this savage aggression using all possible means.” The Houthi-controlled port has been a major destination for ships bringing supplies to the rebels, spurring the Saudi air force to bomb it in August. Any coalition attempt to cut Houthi territory in half would require a successful amphibious assault on Hodeida, so rebel leaders are keenly aware of its importance. Alternatively, whoever was behind the missile attacks could have been trying to create a “Stark effect,” that is, a high-profile outrage similar to the missile strike that hit the USS Stark in 1987 and dragged the United States further into the first Gulf War. Although it is unclear what they could hope to gain by such an outcome, it should not be ruled out yet. POTENTIAL FUTURE THREATS Arguably even more dangerous than occasional missile strikes is the prospect of limited mining of coastal and international shipping routes, which the Houthis are capable of doing without direct Iranian help. The countermine support ship USS Ponce and other existing assets could help clear the Bab al-Mandab Strait under those circumstances, but such a move might still disrupt shipping in and around the area for weeks. It could also create disproportionate psychological effects on world markets. In light of these current and potential threats, the United States needs to send a message to rebel factions in western Yemen that any escalation into the strait is unacceptable and will be met with a robust response, perhaps beyond the recent strikes on radar installation. At the same time, Washington and the international community should persuade the warring sides to enter a lasting ceasefire, since any greater U.S. involvement will further complicate a war that seems to have no end in sight. Farzin Nadimi is a Washington-based analyst specializing in the security and defense affairs of Iran and the Persian Gulf region. Originally Posted on October 17, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/october/20/how-iran-s-involvement-in-yemen-could-draw-america-into-the-war/ http://everythingshale.com/news/2016/october/20/how-iran-s-involvement-in-yemen-could-draw-america-into-the-war/ Thu, 20 October 2016 09:00:29 http://everythingshale.com/news/2016/october/20/zero-wedge-shrinking-margins-and-increased-regulation-leaves-restrained-optimism-for-gold/ Another year, another London Bullion Market Association conference, and this year was full of what HSBC senior analyst James Steel described as “restrained optimism.” A similar description was given of the recent Denver Gold conference in Colorado Springs, where one fund manager summed the mood up as “veiled optimism.” But this didn’t stop an air of positivity buzzing on the sidelines of both events, with the mood jubilant, especially in Singapore this week. At least at face value. Regulation continued to weigh heavy on an industry with ever decreasing margins. As Stuart Murray, non-exec chairman at Sylvania Platinum, bluntly put it: “regulation is killing capitalism.” There was a flurry of news out of the event, mainly linked to the ongoing reformation of the London over-the-counter market. Things certainly seem to be heating up with the three exchanges currently managing the LBMA prices: the London Metal Exchange, ICE and CME Group. ICE appeared pretty happy with their announcement that they will be centrally clearing the LBMA Gold Price starting in early 2017, backed by a new futures contract. This appeared to be going in direct competition with the LME’s project, LMEprecious, aimed at driving more business on to an exchange, but allowing for continuity with the OTC market. CME stayed quiet on the announcement, although many in the know said that they expected the group, which offers the world’s number one gold futures contract on COMEX, to launch some gold-related products in the near future. “Let’s not forget with all the buzz around London, CME still operate the number one gold futures contract in the world,” said one senior source. A second source backed this up saying, “COMEX is the go to for liquidity and depth.” In a bid to increase participation of the LBMA Gold Price, administrator ICE Benchmark Administration said that it will be introducing central clearing of the price discovery mechanism in March 2017, backed by a loco London futures contract. Reaction to the news was somewhat mixed at the LBMA conference, with some seeing the move as way to skirt UK regulation. In response, LBMA general counsel Sakhila Mirza said that wasn’t the case and that the new system is a means to increase participation for users with less access to credit. A source said that he thinks it’s more to do with the fact that ICE already operates out of the US, and is just easier to set up. One banker was less than optimistic of any of the exchanges moving the OTC market; “I’ll take a wager they’ll all fail. There’s no incentive for the market to move to exchange, they’ve all tried it before and not been successful, what’s different this time?” Separately, and in participation with the Singapore Bullion Market Association, IBA and the LBMA are mulling the introduction of a third price discovery mechanism designed for the Asian market. The joint feasibility study on the development of a 1330 SGT (0530 GMT) ‘Pre-AM Gold Price’ is “an important first step towards establishing a US dollar price discovery mechanism for gold during Asian hours.” Still, some were cautious of how the market will receive a the new settlement. “I think there’s concern it will cannibalize the AM settlement in London, and that there may not be enough participation to gain traction,” said one senior source. On the subject of price discovery in Asia, a workshop hosted by the China Gold & Silver Exchange Society and SBMA, participants talked of how Asia should be the price maker rather than a price taker. The region needs to develop partnerships to assume its “rightful role as the price maker in the global market,” a CGSE representative said. However, let’s not forget, this has been a theme for many years at LBMA conferences and meetings. Then we had the mounting headache of proposed ‘net stable fund requirement’ regulation penciled for launch early 2018. Speaking at a round table, Asahi Refining President Grant Angwin said the new regulation, could have a potentially devastating knock-on for the business, as money loaned from banks became increasingly expensive. “Imagine if I have three lines of credit with three separate banks, for $200 million per bank. Then two banks step away, the third bank can’t just increase the credit to $600 million,” he told S&P Global Platts. As The Barrel has previously said, the industry could be in for a wake-up call and a further liquidity squeeze, when potential new NSFR rules are passed. The requirements are being promoted by the European Commission. “This is going to be really bad for the market and will hit hard. More should have been done earlier in regards of lobbying for change,” a second refiner said on the sidelines of the conference. “The banks certainly aren’t going to bear the additional costs,” the refiner said. Speaking on a separate panel, LBMA’s Mirza said that NSFR would likely mean more banks leaving the business and as such “costs will significantly increase…this will effect everyone [involved in the bullion business].” Still, at  the round-up session, John Reade, strategist at gold fund Paulson, said that regardless of all the conversations; “I’m still no clearer on how NSFR will effect the refiners.” It’s likely this confusion that is leading to an air of panic across the value chain. “And rightly so too,” said one senior bullion banker. Sylvania Platinum’s Murray summed regulation up from one of his own conversations at the event; “you can’t make a baby while wearing a condom,” he said of the impact of overzealous regulation of the market. Getting back to the more positive stuff. Wolfgang Wrzesniok, CEO of high-end gold retailer Degussa, told Platts that he thinks the conference has changed over the years, and is now much more physical in nature. “There are a lot less banks, more logistics and mints. I think the attendance has changed a lot over the years,” he said. He said that from a business perspective he remains bullish on the outlook for gold, as the company plans to open more shops across Germany. Wrzesniok added that the expansion wouldn’t see large shops opening, rather smaller operations in smaller cities. There are no plans for anymore international offices for the time being; with a branch in London, Madrid, Zurich, Geneva and Singapore. And, with less banks in the fray new opportunities are opening; for certain refiners and brokers. INTL FCStone’s precious metals division is launching PMXecute+, an online trading platform connecting consumers and suppliers of physical gold globally, the US financial services group said during the conference. PMXecute+ provides customers with free, direct and real-time access to INTL FCStone’s inventory across the world, as well as all product offered through its global network of supply partners. The broker is in a prime position to lap up the business that the banks are leaving alone; either because of compliance issues or margins being too slim, or the fact there are just less banks. “We developed PMXecute+ to become the physical platform of choice for the global bullion market,” said Barry Canham, the company’s global head of precious metals Then there was the rather unique Perth Mint, the only operation seemingly shielded from the threat of over-regulation. CEO Richard Hayes said his company was working with small-to-medium-sized miners to create “a one stop shop” for financing. He did caution however that as refiners become more involved in the financing of the business regulators’ attention would turn to them. Moderator Courtney Lynne, vice president, investor relations and treasurer at the world’s largest primary silver producer, Coeur, questioned whether refiners had the ability to fill the liquidity gap. Hayes said that as long as there was some margin to be made then there would always be a group of banks to service those requirements. On the sidelines bankers said Perth Mint was an exception because it is fully backed by the Western Australia state government. Hayes agreed: “[We’re] a standout, owing to our credit lines. Peers may be effected by banks exiting.” The bullion world is changing. That’s one certainty. And for the time being that could bring fragmentation and confusion. Still, as one senior exchange source said, “we love fragmentation.” Let’s wait and see if the struggling end-users agree. The post Zero wedge: Shrinking margins and increased regulation leaves ‘restrained optimism’ for gold appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/20/zero-wedge-shrinking-margins-and-increased-regulation-leaves-restrained-optimism-for-gold/ http://everythingshale.com/news/2016/october/20/zero-wedge-shrinking-margins-and-increased-regulation-leaves-restrained-optimism-for-gold/ Thu, 20 October 2016 04:45:59 http://everythingshale.com/news/2016/october/20/container-market-s-financial-pressure-cooker-set-to-build-into-2017/ The shipping industry is meant to epitomize the word “globalization” but not in the true sense of the word, as shipping companies deal with the continuous onslaught of environmental and financial regulations. They are expected to be implemented globally in conjunction with maritime bodies trying to reduce the regulation impact on the balance sheet. The outcome sometimes is a mouse with an elephant’s trunk, meaning what looks good on paper is not always practical. In principal, the rules regarding Emission Control Areas and ballast water treatment systems are important legislation to sustain the way we want to live in future generations. The ECA zone rules led to shipowners finding ways to reduce the sometimes crippling bunker fuel prices. Enter dual-fueled newbuilding orders and scrubber technologies. The unlikely respite to ever increasing operational costs came as a consequence of the oil price crash in Q4 2014 and the ongoing Saudi market share battle with US shale gas. Shipowners are able to pass on the majority of bunker costs to charterers whether a ship is operating in or out of the ECA zones. In a sector like the container market beset with internal dominance price wars and a gaping supply/demand imbalance, the power of economies of scale continues to be an opportunity. Some shipowners have been able to offer below market freight rates in an attempt to gain market share on particular trade lanes. Add the fact that the container shipping market outlook is underwhelming. Slower global trade growth and the unrelenting delivery of ever loftier sized container ships could compound the issue of low freight rates if nothing fundamental changes. The Hanjin situation has shone a huge spotlight on the frenzied container market making a rare appearance into international newsrooms, as Hanjin has until 19 December to propose a rescue package to avoid bankruptcy. The true implications will not be resolved in the near future as the main symptom is inherent within the shipping industry, overcapacity. Some owners are delaying deliveries into 2017 but along with planned demolitions this will be a token gesture for reducing capacity. The Panama Canal expansion offers exciting opportunities but the immediate impact for the container market is lower-capacity vessels making their final swansong to their rest beds. Their valiant service to our consumable good culture has brought home that globalization is relentless. The impact has been on shipowners’ balance sheets have reached unsustainable levels for certain companies. One reason is the shipping industry is capital intensive and some of the traditional banks still have severe exposure levels. Some banks voluntarily reduced their appetite, but others were not so lucky and have gone from an active investor to a hunter role looking for the right moment to potentially re-enter. You could argue it is now as freight rates, asset prices and operational costs are all at lower levels in some commodity markets. The huge obstacle to maneuver around is financial regulations and in particular how much capital banks need to hold to manage exposure levels. All of these elements lead to a precarious list within the container market that may not be truly felt till shipowners either renegotiate their bank terms or seek new financial vehicles to perform their business strategies. The consequence could be one too many containers added to cause the ship to finally capsize. The post Container market’s financial pressure cooker set to build into 2017 appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/20/container-market-s-financial-pressure-cooker-set-to-build-into-2017/ http://everythingshale.com/news/2016/october/20/container-market-s-financial-pressure-cooker-set-to-build-into-2017/ Thu, 20 October 2016 04:30:47 http://everythingshale.com/news/2016/october/19/there-s-no-debate-fracking-is-bringing-manufacturing-back-1/ As Hillary Clinton and Donald Trump take the stage tonight for their final debate, one thing they can both agree on is the fact that America’s surge in natural gas production, which has driven down prices, is bringing manufacturing back. Only a few years ago, the United States watched manufacturing jobs get shipped overseas. In fact, some of the hardest hit areas were in Pennsylvania, West Virginia and Ohio, leaving the tristate, typically defined as the “Rust Belt,” suffering economically. But then fracking came to the Marcellus and Utica shales and everything changed. Within a few short years, vacant plants along the Ohio River were given new life and thousands of new jobs were created. On the Democratic side, Clinton recently referenced a report that discussed how the U.S. was on track to surpass Russia in domestic oil and natural gas production and went on to note, “What that means for viable manufacturing and industrialization in this country is enormous.” On the Republican side, Trump has agreed that our energy renaissance has been a boon for trade and manufacturing, “The oil and natural gas industry supports 10 million high-paying Americans jobs and can create another 400,000 new jobs per year. This exploration will also create a resurgence in American manufacturing — dramatically reducing both our trade deficit and our budget deficit.” The White House National Economic Council recently released  a report entitled “Revitalizing American Manufacturing” which finds that since early 2010, U.S. manufacturing has added over 800,000 direct jobs. The White House links this directly to shale production: “The surge in American natural gas production has lowered energy costs for manufacturers and driven job growth.” In 2014 PricewaterhouseCoopers put out a report , which stated that the annual cost savings to the manufacturing sector from shale gas could mean $22.3 billion by 2030 and $34.1 billion by 2040. This saving, in turn, would lead to 930,000 shale gas-driven manufacturing jobs by 2030 and 1.41 million jobs by 2040. The reason low natural gas prices are so important is due to the fact that oil and natural gas are used as the feedstock to American made products we use each and every day. Here’s a quick illustration of how that works: Without oil and natural gas, developed by fracking, the manufacturing of numerous products, including wind turbines and solar panels would not even be possible (ethane and propylene are used to make renewable infrastructure). This is a fact with anti-fracking activists conveniently and routinely ignore. Revitalizing Jobs in Ohio The promise of job creation is already proving true in Ohio: steel is again being manufactured , and resurgence is occurring up and down the Ohio River as the manufacturing industry is coming back to life . Natural gas production from the Marcellus and Utica shales and the intersection of these technological advances in manufacturing has not gone unnoticed, which is why companies are investing billions in ethane crackers along the Ohio River. In preparation for this manufacturing rebirth, Ohio and Pennsylvania have encouraged investment in innovative technologies, like 3D printing. To highlight this point, the Youngstown Regional Chamber , Youngstown State University, Humtown Products , and   Freshmade 3D joined forces to show just how innovative manufacturing plastics has become  by creating life-sized 3D printed Donald Trump and Hillary Clinton bubbleheads, manufactured from sand, and fiberglass (a petroleum based product). To watch how this technology works, click here . Both Democrats and Republicans agree: shale production is fueling manufacturing – and that means jobs are surging back.   http://everythingshale.com/news/2016/october/19/there-s-no-debate-fracking-is-bringing-manufacturing-back-1/ http://everythingshale.com/news/2016/october/19/there-s-no-debate-fracking-is-bringing-manufacturing-back-1/ Wed, 19 October 2016 16:03:00 http://everythingshale.com/news/2016/october/19/there-s-no-debate-fracking-is-bringing-manufacturing-back/ As Hillary Clinton and Donald Trump take the stage tonight for their final debate, one thing they can both agree on is the fact that America’s surge in natural gas production, which has driven down prices, is bringing manufacturing back. Only a few years ago, the United States watched manufacturing jobs get shipped overseas. In fact, some of the hardest hit areas were in Pennsylvania, West Virginia and Ohio, leaving the tristate, typically defined as the “Rust Belt,” suffering economically. But then fracking came to the Marcellus and Utica shales and everything changed. Within a few short years, vacant plants along the Ohio River were given new life and thousands of new jobs were created. On the Democratic side, Clinton recently referenced a report that discussed how the U.S. was on track to surpass Russia in domestic oil and natural gas production and went on to note, “What that means for viable manufacturing and industrialization in this country is enormous.” On the Republican side, Trump has agreed that our energy renaissance has been a boon for trade and manufacturing, “The oil and natural gas industry supports 10 million high-paying Americans jobs and can create another 400,000 new jobs per year. This exploration will also create a resurgence in American manufacturing — dramatically reducing both our trade deficit and our budget deficit.” The White House National Economic Council recently released  a report entitled “Revitalizing American Manufacturing” which finds that since early 2010, U.S. manufacturing has added over 800,000 direct jobs. The White House links this directly to shale production: “The surge in American natural gas production has lowered energy costs for manufacturers and driven job growth.” In 2014 PricewaterhouseCoopers put out a report , which stated that the annual cost savings to the manufacturing sector from shale gas could mean $22.3 billion by 2030 and $34.1 billion by 2040. This saving, in turn, would lead to 930,000 shale gas-driven manufacturing jobs by 2030 and 1.41 million jobs by 2040. The reason low natural gas prices are so important is due to the fact that oil and natural gas are used as the feedstock to American made products we use each and every day. Here’s a quick illustration of how that works: Without oil and natural gas, developed by fracking, the manufacturing of numerous products, including wind turbines and solar panels would not even be possible (ethane and propylene are used to make renewable infrastructure). This is a fact with anti-fracking activists conveniently and routinely ignore. Revitalizing Jobs in Ohio The promise of job creation is already proving true in Ohio: steel is again being manufactured , and resurgence is occurring up and down the Ohio River as the manufacturing industry is coming back to life . Natural gas production from the Marcellus and Utica shales and the intersection of these technological advances in manufacturing has not gone unnoticed, which is why companies are investing billions in ethane crackers along the Ohio River. In preparation for this manufacturing rebirth, Ohio and Pennsylvania have encouraged investment in innovative technologies, like 3D printing. To highlight this point, the Youngstown Regional Chamber , Youngstown State University, Humtown Products , and   Freshmade 3D joined forces to show just how innovative manufacturing plastics has become  by creating life-sized 3D printed Donald Trump and Hillary Clinton bubbleheads, manufactured from sand, and fiberglass (a petroleum based product). To watch how this technology works, click here . Both Democrats and Republicans agree: shale production is fueling manufacturing – and that means jobs are surging back.   http://everythingshale.com/news/2016/october/19/there-s-no-debate-fracking-is-bringing-manufacturing-back/ http://everythingshale.com/news/2016/october/19/there-s-no-debate-fracking-is-bringing-manufacturing-back/ Wed, 19 October 2016 16:03:00 http://everythingshale.com/news/2016/october/19/carnegie-mellon-study-natural-gas-could-provide-50-billion-in-health-benefits-1/ A cross-disciplinary team of researchers at Carnegie Mellon University recently released a peer-reviewed study finding significant health and climate benefits as a result of the increased use natural gas for electricity generation. In fact, the Carnegie Mellon team estimates that continuing to increase natural gas usage could provide as much as $20 to $50 billion in healthcare cost savings: “The human health benefits of such a switch are substantial: SO 2 emissions are reduced from the baseline (MATS (Mercury and Air Toxics Standard) retrofits by 2016) by more than 90%, and NO X emissions by more than 60%, reducing total national annual health damages by $20 to $50 billion annually.” Improving public health should be a priority, because “health effects, if valued at $6 million per statistical life, constitute 94%” of the economic costs of air pollution associated with energy generation in the US, according to the researchers. As the below chart shows, most of the public health savings would occur in the Ohio River Valley and southeastern US, where there are dense populations of Americans living downwind of higher-emission, non-natural gas power plants. According to Carnegie Mellon’s data, power plants using natural gas produce less sulfur dioxide (SO 2 ) and nitrous oxides (NO x ) into the atmosphere when burned. SO 2 can­ contribute to acid rain and smog , the clouds that obscure metropolitan areas under clouds of pollutants. Sulfur dioxide is also known to be particularly harmful and potentially life-threatening. Nitrous oxide compounds are known to increase risks of respiratory illnesses and can cause acid rain. Natural gas also produces far less particulate matter , which can lead to health problems if inhaled.   That’s not the only good news in the report. The researchers also expect that a widespread transition towards natural gas electricity generation would reduce greenhouse gas emissions drastically . The researchers found that natural gas power plants produce 50-67 percent less CO 2 and noted that natural gas usage has the potential to decrease overall methane (CH 4 ) emissions, “Assuming 3% fugitive CH 4 emissions, switching… would reduce the power sector’s contribution to warming by 20% in 2040.” As EID has noted many times, study after study has shown that fugitive methane emission from natural gas production are around 1.2 to 1.6 percent – which is well below the 3 percent threshold for natural gas to have significant climate benefits. Altogether, the potential decreases in greenhouse gases and air pollution make it impossible to deny the benefits of natural gas production. It is the responsible choice from an environmental perspective and offers significant public health benefits for all Americans. http://everythingshale.com/news/2016/october/19/carnegie-mellon-study-natural-gas-could-provide-50-billion-in-health-benefits-1/ http://everythingshale.com/news/2016/october/19/carnegie-mellon-study-natural-gas-could-provide-50-billion-in-health-benefits-1/ Wed, 19 October 2016 13:04:18 http://everythingshale.com/news/2016/october/19/carnegie-mellon-study-natural-gas-could-provide-50-billion-in-health-benefits/ A cross-disciplinary team of researchers at Carnegie Mellon University recently released a peer-reviewed study finding significant health and climate benefits as a result of the increased use natural gas for electricity generation. In fact, the Carnegie Mellon team estimates that continuing to increase natural gas usage could provide as much as $20 to $50 billion in healthcare cost savings: “The human health benefits of such a switch are substantial: SO 2 emissions are reduced from the baseline (MATS (Mercury and Air Toxics Standard) retrofits by 2016) by more than 90%, and NO X emissions by more than 60%, reducing total national annual health damages by $20 to $50 billion annually.” Improving public health should be a priority, because “health effects, if valued at $6 million per statistical life, constitute 94%” of the economic costs of air pollution associated with energy generation in the US, according to the researchers. As the below chart shows, most of the public health savings would occur in the Ohio River Valley and southeastern US, where there are dense populations of Americans living downwind of higher-emission, non-natural gas power plants. According to Carnegie Mellon’s data, power plants using natural gas produce less sulfur dioxide (SO 2 ) and nitrous oxides (NO x ) into the atmosphere when burned. SO 2 can­ contribute to acid rain and smog , the clouds that obscure metropolitan areas under clouds of pollutants. Sulfur dioxide is also known to be particularly harmful and potentially life-threatening. Nitrous oxide compounds are known to increase risks of respiratory illnesses and can cause acid rain. Natural gas also produces far less particulate matter , which can lead to health problems if inhaled.   That’s not the only good news in the report. The researchers also expect that a widespread transition towards natural gas electricity generation would reduce greenhouse gas emissions drastically . The researchers found that natural gas power plants produce 50-67 percent less CO 2 and noted that natural gas usage has the potential to decrease overall methane (CH 4 ) emissions, “Assuming 3% fugitive CH 4 emissions, switching… would reduce the power sector’s contribution to warming by 20% in 2040.” As EID has noted many times, study after study has shown that fugitive methane emission from natural gas production are around 1.2 to 1.6 percent – which is well below the 3 percent threshold for natural gas to have significant climate benefits. Altogether, the potential decreases in greenhouse gases and air pollution make it impossible to deny the benefits of natural gas production. It is the responsible choice from an environmental perspective and offers significant public health benefits for all Americans. http://everythingshale.com/news/2016/october/19/carnegie-mellon-study-natural-gas-could-provide-50-billion-in-health-benefits/ http://everythingshale.com/news/2016/october/19/carnegie-mellon-study-natural-gas-could-provide-50-billion-in-health-benefits/ Wed, 19 October 2016 13:04:18 http://everythingshale.com/news/2016/october/19/activist-s-attempt-at-convincing-longmont-to-enact-fracking-moratorium-falls-flat-1/ After failing to garner enough statewide support to place a pair of ballot initiatives to ban fracking on the ballot this fall, activists are taking their campaign back to the local level, and are getting the same results. The latest failure came last night when Karen Dike, a lead proponent of the failed initiatives, attempted to persuade Longmont City Council members to adopt a one-year moratorium on fracking within the city limits. As the Longmont Times-Call reports : “Dike said Longmont residents demand the council enact a moratorium because the oil and gas regulations that survived a lawsuit were written in 2012 and are now out of date.” But Longmont City Council members were not too enthusiastic about that idea. Also from the Times-Call : “Councilwoman Bonnie Finley said she has faith in Longmont’s regulations and wouldn’t see a need to update. Councilman Jeff Moore said that if the city can deal with minor details in the regulations in less than a year , he didn’t know whether they should enact a moratorium.” Longmont mayor, Dennis Coombs said he is “not there yet” while other council members alluded to a recent state Supreme Court decision ruling that Longmont’s now defunct fracking ban was illegal. From the Times-Call : “Councilman Gabe Santos said ‘it’s very obvious that the (Colorado) Supreme Court has ruled on that topic,’ when asked about Dike’s proposal. Santos refused to answer further questions about whether he supported or opposed a moratorium.” Colorado’s local communities have long been a target of national activist organizations seeking to drive oil and gas development out of the state. Groups like Karen Dike’s longtime national partner s, Food & Water Watch, The Sierra Club and Earthworks even joined the Longmont case as petitioners in support of local fracking bans. Now, it appears that Dike is once-again falling back on their strategy of masking their goal for a fracking ban with calls for increased regulation. As the Times-Call reports: “Dike said she thought a moratorium was appropriate so the city could examine Longmont’s rules and regulations…‘The reason we call for a moratorium isn’t to keep fracking out; it would be to look at the regulations,’ Dike told the Times-Call.” Of course, it is well known that Dike’s real interest is to ban fracking, along with the economic and climate benefits that come along with it. As EID previously reported, acting as a  spokesperson for Coloradans Against Fracking (CAF) earlier this year, Karen Dike kicked-off a conference call with supporters of the initiatives by recounting a series of anti-energy demonstrations organized by the group before she told participants: “None of these actions, as important as they are, is enough to halt this toxic industry .” With that effort now abandoned due to a lack of support, it is clear that Dike is not giving up. In other words, anti-fracking activists won’t let things like a lack of public support, the law or facts get in the way of their ban-fracking ideology. But Coloradans – and clearly the Longmont City Council– aren’t buying it. http://everythingshale.com/news/2016/october/19/activist-s-attempt-at-convincing-longmont-to-enact-fracking-moratorium-falls-flat-1/ http://everythingshale.com/news/2016/october/19/activist-s-attempt-at-convincing-longmont-to-enact-fracking-moratorium-falls-flat-1/ Wed, 19 October 2016 12:59:46 http://everythingshale.com/news/2016/october/19/activist-s-attempt-at-convincing-longmont-to-enact-fracking-moratorium-falls-flat/ After failing to garner enough statewide support to place a pair of ballot initiatives to ban fracking on the ballot this fall, activists are taking their campaign back to the local level, and are getting the same results. The latest failure came last night when Karen Dike, a lead proponent of the failed initiatives, attempted to persuade Longmont City Council members to adopt a one-year moratorium on fracking within the city limits. As the Longmont Times-Call reports : “Dike said Longmont residents demand the council enact a moratorium because the oil and gas regulations that survived a lawsuit were written in 2012 and are now out of date.” But Longmont City Council members were not too enthusiastic about that idea. Also from the Times-Call : “Councilwoman Bonnie Finley said she has faith in Longmont’s regulations and wouldn’t see a need to update. Councilman Jeff Moore said that if the city can deal with minor details in the regulations in less than a year , he didn’t know whether they should enact a moratorium.” Longmont mayor, Dennis Coombs said he is “not there yet” while other council members alluded to a recent state Supreme Court decision ruling that Longmont’s now defunct fracking ban was illegal. From the Times-Call : “Councilman Gabe Santos said ‘it’s very obvious that the (Colorado) Supreme Court has ruled on that topic,’ when asked about Dike’s proposal. Santos refused to answer further questions about whether he supported or opposed a moratorium.” Colorado’s local communities have long been a target of national activist organizations seeking to drive oil and gas development out of the state. Groups like Karen Dike’s longtime national partner s, Food & Water Watch, The Sierra Club and Earthworks even joined the Longmont case as petitioners in support of local fracking bans. Now, it appears that Dike is once-again falling back on their strategy of masking their goal for a fracking ban with calls for increased regulation. As the Times-Call reports: “Dike said she thought a moratorium was appropriate so the city could examine Longmont’s rules and regulations…‘The reason we call for a moratorium isn’t to keep fracking out; it would be to look at the regulations,’ Dike told the Times-Call.” Of course, it is well known that Dike’s real interest is to ban fracking, along with the economic and climate benefits that come along with it. As EID previously reported, acting as a  spokesperson for Coloradans Against Fracking (CAF) earlier this year, Karen Dike kicked-off a conference call with supporters of the initiatives by recounting a series of anti-energy demonstrations organized by the group before she told participants: “None of these actions, as important as they are, is enough to halt this toxic industry .” With that effort now abandoned due to a lack of support, it is clear that Dike is not giving up. In other words, anti-fracking activists won’t let things like a lack of public support, the law or facts get in the way of their ban-fracking ideology. But Coloradans – and clearly the Longmont City Council– aren’t buying it. http://everythingshale.com/news/2016/october/19/activist-s-attempt-at-convincing-longmont-to-enact-fracking-moratorium-falls-flat/ http://everythingshale.com/news/2016/october/19/activist-s-attempt-at-convincing-longmont-to-enact-fracking-moratorium-falls-flat/ Wed, 19 October 2016 12:59:46 http://everythingshale.com/news/2016/october/19/controls-pre-commissioning-is-like-checking-your-parachute-before-jumping-a-very-wise-decision-1/ Wouldn’t you want to make sure your parachute rip chords are OK before jumping out of a plane?  Me too.  Safety first, right?  Well, it’s the same idea with performing a pre-commissioning controls checkout of your plant before going live the first time.  Ask yourself…Is your Distributed Control System control logic configured correctly?  The answer is likely “no  – but what can I do about it?”. How about the Programmable Logic Controllers? The Emergency Shut Down System?  The Turbomachinery Controls?  The Burner Management System? And so forth… To quote Donald Rumsfeld–  “There are known knowns; there are things   we know we know .   We   also   know   there are known unknowns; that is to say   we know   there are some things   we do not   know . But there are also unknown unknowns .” A great quote taken out of context but directly relevant – we simply do not know how good our controls are prior to commissioning. What if I told you that a large refinery used dynamic simulation to do pre-commissioning tests on seven separate refinery units.  They identified more than 1200 logic and control configuration issues in a completely safe and cost-effective manner prior to their plant going live. Whew! This is actually the norm and not the exception. And who do you think became the hero in that story?  The plant manager, of course…and anyone else in the company who had the foresight to employ a dynamic simulator. Sleeping better at night If you knew there were (on average) 150 issues on each unit that could be corrected on your controls systems prior to live commissioning wouldn’t you be more confident in the lead up to commissioning? For a new greenfield facility or a revamp project,  the control or safety instrumented system is often seen as the critical path risk to completing the plant startup on schedule.  Low-Fidelity Tieback simulation is a good tool for basic testing, but only effectively tests single loops at a time. It certainly will provide value but today plants are highly complex and integrated and have highly non-linear responses  that limit the benefits of tie-back simulation. What if the engineering or operating company had the foresight to use dynamic simulation in the Front End Engineering Design (FEED) stage. Those high fidelity models have already delivered significant value as discussed in the first blog in the series. They can now be readily upgraded and integrated with the controls systems to support pre-commissioning controls checkout, adding substantially more benefits. Foresight and Planning Even for those companies that didn’t give thought at the design phase to do model development, there is still an opportunity to reap the benefits with a little foresight and planning. The controls design and dynamic simulation can happen in parallel – so don’t believe the naysayers who say that non-linear High-Fidelity simulation cannot fit into the always compressed timelines around controls design and startup. This early identification and resolution of controls issues in pre-commissioning has a dramatic impact in terms of shortening the commissioning time in the plant and ensures that a plant will be on-line sooner. Here’s an example where a power company saved an estimated $1 million dollars by performing  a Controls Pre-commissioning Checkout.  Intermountain Power Service Corporation purchased a simulator upgrade as part of a DCS upgrade project to help prepare operations for the new user interface and control logic changes.  After implementing a controls checkout using Schneider Electric’s SimSci  DYNSIM product, the plant identified and fixed critical errors prior to going online.  Read the complete success story to learn more about their challenges and the results. Lifecycle Management In the first blog of this series I highlighted the potential returns on investing in modeling early on in the project lifecycle. The same model has now become an asset and added extra value prior to plant commissioning by being utilized for controls pre-commissioning. The journey isn’t over yet. Please read the next blog in the series to learn about the additional benefits that can be realized by taking the controls checkout system and using it to train your operations staff. Operations staff directly impact safety, profitability and plant availability. Highly competent and skilled operators will maximize all three. The post Controls Pre-commissioning Is Like Checking your Parachute Before Jumping…A Very Wise Decision. appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/19/controls-pre-commissioning-is-like-checking-your-parachute-before-jumping-a-very-wise-decision-1/ http://everythingshale.com/news/2016/october/19/controls-pre-commissioning-is-like-checking-your-parachute-before-jumping-a-very-wise-decision-1/ Wed, 19 October 2016 11:25:53 http://everythingshale.com/news/2016/october/19/controls-pre-commissioning-is-like-checking-your-parachute-before-jumping-a-very-wise-decision/ Wouldn’t you want to make sure your parachute rip chords are OK before jumping out of a plane?  Me too.  Safety first, right?  Well, it’s the same idea with performing a pre-commissioning controls checkout of your plant before going live the first time.  Ask yourself…Is your Distributed Control System control logic configured correctly?  The answer is likely “no  – but what can I do about it?”. How about the Programmable Logic Controllers? The Emergency Shut Down System?  The Turbomachinery Controls?  The Burner Management System? And so forth… To quote Donald Rumsfeld–  “There are known knowns; there are things   we know we know .   We   also   know   there are known unknowns; that is to say   we know   there are some things   we do not   know . But there are also unknown unknowns .” A great quote taken out of context but directly relevant – we simply do not know how good our controls are prior to commissioning. What if I told you that a large refinery used dynamic simulation to do pre-commissioning tests on seven separate refinery units.  They identified more than 1200 logic and control configuration issues in a completely safe and cost-effective manner prior to their plant going live. Whew! This is actually the norm and not the exception. And who do you think became the hero in that story?  The plant manager, of course…and anyone else in the company who had the foresight to employ a dynamic simulator. Sleeping better at night If you knew there were (on average) 150 issues on each unit that could be corrected on your controls systems prior to live commissioning wouldn’t you be more confident in the lead up to commissioning? For a new greenfield facility or a revamp project,  the control or safety instrumented system is often seen as the critical path risk to completing the plant startup on schedule.  Low-Fidelity Tieback simulation is a good tool for basic testing, but only effectively tests single loops at a time. It certainly will provide value but today plants are highly complex and integrated and have highly non-linear responses  that limit the benefits of tie-back simulation. What if the engineering or operating company had the foresight to use dynamic simulation in the Front End Engineering Design (FEED) stage. Those high fidelity models have already delivered significant value as discussed in the first blog in the series. They can now be readily upgraded and integrated with the controls systems to support pre-commissioning controls checkout, adding substantially more benefits. Foresight and Planning Even for those companies that didn’t give thought at the design phase to do model development, there is still an opportunity to reap the benefits with a little foresight and planning. The controls design and dynamic simulation can happen in parallel – so don’t believe the naysayers who say that non-linear High-Fidelity simulation cannot fit into the always compressed timelines around controls design and startup. This early identification and resolution of controls issues in pre-commissioning has a dramatic impact in terms of shortening the commissioning time in the plant and ensures that a plant will be on-line sooner. Here’s an example where a power company saved an estimated $1 million dollars by performing  a Controls Pre-commissioning Checkout.  Intermountain Power Service Corporation purchased a simulator upgrade as part of a DCS upgrade project to help prepare operations for the new user interface and control logic changes.  After implementing a controls checkout using Schneider Electric’s SimSci  DYNSIM product, the plant identified and fixed critical errors prior to going online.  Read the complete success story to learn more about their challenges and the results. Lifecycle Management In the first blog of this series I highlighted the potential returns on investing in modeling early on in the project lifecycle. The same model has now become an asset and added extra value prior to plant commissioning by being utilized for controls pre-commissioning. The journey isn’t over yet. Please read the next blog in the series to learn about the additional benefits that can be realized by taking the controls checkout system and using it to train your operations staff. Operations staff directly impact safety, profitability and plant availability. Highly competent and skilled operators will maximize all three. The post Controls Pre-commissioning Is Like Checking your Parachute Before Jumping…A Very Wise Decision. appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/19/controls-pre-commissioning-is-like-checking-your-parachute-before-jumping-a-very-wise-decision/ http://everythingshale.com/news/2016/october/19/controls-pre-commissioning-is-like-checking-your-parachute-before-jumping-a-very-wise-decision/ Wed, 19 October 2016 11:25:53 http://everythingshale.com/news/2016/october/19/ohio-anti-fracking-ballot-measures-face-strong-community-opposition-in-november/ With 83 percent of anti-fracking ballot measures in Ohio having failed or been ruled invalid by various courts, it’s certainly fair to say that the Community Environmental Legal Defense Fund (CELDF) has been marginalized. However, despite the onslaught of defeats, CELDF continues to abuse Ohio cities by pushing anti-fracking ballot measures on them. On Election Day two cities, Youngstown and Waterville, will vote on the so-called Community Bill of Rights.  In response, coalition groups comprised of business leaders, elected officials, and unions are organizing to defeat the measures. In other words, CELDF will once again face strong opposition. Here’s what you need to know about both ballot measures: City of Youngstown Issue 4: Community Bill of Rights Five Times Failed, CELDF Abuses Voters for Sixth Time If at first you don’t succeed, try six times? That’s the story in Youngstown, where voters will go to the ballot for the sixth consecutive time on “Issue 4” to vote on the Community Bill of Rights – and taxpayers will be footing the bill. Taxpayers Have Already Spent Tens of Thousands So far, the measure has cost taxpayers over $80,000 just to go on the ballot for the first five defeats. With this upcoming “Issue 4” on the ballot, it’s guaranteed to cost several thousand more. Campaign Using Children (Again) To Advance Agenda The Youngstown Community Bill of Rights is, of course, the brain child of CELDF, but it is also being pushed by Frack Free Mahoning Valley , led by Dr. Ray and Susie Biersdorfer. The Biersdorfers were recently at the center of an opinion editorial from the Youngstown Vindicator entitled “Frick and Frack are Back,” recalling that just a few months ago Susie Biersdorfer was caught attacking me personally, while I was nine months pregnant. In short, to say these activists are fringe environmental extremists or outliers is an understatement.  But as this below flyer shows, they’re at it again, using pregnant women and children as pons in their deceptive campaign: In response, the City of Youngstown Mayor debunked this argument. As the Youngstown Business Journal reported : As for the safety of the water residents drink, Youngstown is a distributor of the water the Mahoning Valley Sanitary District treats, the mayor pointed out. The accusation that the U.S. Environmental Protection Agency three times in the last three years notified the city “that our drinking water is in VIOLATION of safe drinking water standards [emphasis in committee’s packet]” is another incomplete truth, McNally said. The U.S. EPA notified the city only once,” he said, and the notification was “not related to injection wells or fracking.” Community Coalition Formed to Stop Issue 4 Once again, the community has pushed back on the so-called Community Bill of Rights. Each time “Frick and Frack” put up another ballot measure, the coalition against them just seems to grow larger and larger. This is one issue where Republicans, Democrats, business, and labor all agree—the Community Bill of Rights is a bad idea. And while we know it is a bad idea, it’s certainly fair to say that the people who live and work in the Mahoning Valley are fed up with abuse of their city, calling it an “attack on jobs. It’s ridiculous, irresponsible, and was not written by people here but outsiders.” Coalition for Job Growth and Investment Highlights Bipartisan Fight Against CELDF (Photo from wfmj.com) Rocky DiGennaro, president of the Western Reserve Building and Construction Trades Council said , “If this destructive bill passes, it will devastate our local contractors and local [union] members” and said the amendment “is a waste of money and resources.” City of Waterville: Issue 3 Community Bill Of Rights CELDF Launches Campaign in Waterville In May, CELDF put out a press release announcing they were behind the petition drive to put the Community Bill of Rights on the ballot of the City of Waterville. While no Utica shale development is occurring in our around Waterville (which is just outside of Toledo), they are pushing a so-called Community Bill of Rights misinformation campaign in an effort to attempt to block a pipeline. The proposal was initiated after a planned FERC pipeline project was announced, but as is evident from the activist activity on social media , they are clearly against all industry development of any kind. City Law Director Warns Ballot Measure “Will Not Be Enforceable” In June, the city law director warned that placing the measure on the ballot “will not be enforceable.” His comments at a city council meeting were as follows , “Mr. Dombey stated that the amendment, if patterned after the Broadview Heights, Ohio, Community Bill of Rights, would not be enforceable or constitutional.  He quoted a decision by the U.S. Supreme Court in Morrison vs. Beck Energy Corporation, which affirmed that state statues pre-empt conflicting local ordinances.  He added that local municipalities cannot overrule federal or state exemptions or the interstate commerce clause.” CELDF Misinformation Campaign After announcing the campaign in Waterville, CELDF’s appears to have helped set up a community group calling themselves, Protecting Air in Waterville (PAW), led by a local activist, David Bourland, who incorrectly stated at a city council meeting in June , “If the amendment were passed, it would ban the Nexus Gas Transmission and future pipelines and compressor stations in the City.” Of course this is a well-established talking point from CELDF, and has been used frequently in the failed misinformation campaign in Medina County . Pipelines are regulated and decided upon by the Federal Energy Regulatory Commission (FERC), the state through the Ohio EPA, which makes the local measure therefore unenforceable. As the Ohio EPA recently reported ,  “The Ohio EPA thoroughly reviewed and responded to the public’s comments and reviewed the company’s application to ensure that emissions would comply with federal and state air pollution control standards, laws and regulations” Local Community Coalition Fights Back This week a group of local leaders issued a press release announcing they are fighting back to “Denounce tactics of out-of-state group selling false hope.” The group is comprised of Waterville Economic Development Corporation, Toledo Regional Chamber of Commerce, Toledo Regional Association of Realtors, and Plumbers, Steamfitters & Service Mechanics Local 50. Local business leader Bill Anderson said , “The name ‘community bill of rights’ is deceiving. When those supporting the proposed charter amendment described it to me, it sounded like a good idea. But when I actually read the language, I realized the measure is poorly written, and so overly broad that it could take control over our own property-keeping us from trimming our trees, fertilizing and grooming our lawns, and tending to our property as we see fit.” Like all CELDF’s “rights of nature” campaigns, Issue 3’s language is very broad – and while the pipeline in question would not be impacted by the passage of the Community Bill of Rights, a host of other industries would be. The oil and natural gas industry, in all its forms, is simply a way for CELDF to raise money, encourage frivolous lawsuits, bankrupt communities, and attempt to take personal property rights from taxpayers. Once educated, it’s clear that communities, like Waterville reject this misinformation campaign. As Phyllis Hyder, board member with the Waterville Economic Development Corporation said , “Issue 3 subjects all local companies and developers to the threat of costly and time-consuming lawsuits. What company would want to invest in our city when they could be slapped with a lawsuit as soon as they break ground or operate?   The current and planned development at Waterville Landing, for example, could violate the measure and could be stalled or shut down completely if this dangerous measure passes. We can’t be fooled by the false hope an out-of-state group is selling. Issue 3 cannot stop the NEXUS pipeline or the compressor station which are governed by state and federal law. But what Issue 3 will do is hurt local Waterville companies and families.” Local business leader, Dave Boothe really nailed the entire strategy of CELDF’s misinformation campaign in Waterville and in all the areas they attack, when he said , “We’ve been told that Issue 3 was drafted by Waterville residents, but a little research online reveals that it was actually drafted by a group of anti-development activists out of Pennsylvania that are pushing this measure and their agenda across the county. The Pennsylvania author of the proposed measure was quoted in Reuters as saying ‘if a town goes bankrupt trying to defend one of our ordinances, well, perhaps that’s exactly what is needed to trigger a national movement.’ Broadview Heights, Ohio passed a similar measure, was sued, and lost. Let’s learn from their experience and not make the same mistake for our community.” Conclusion It’s clear that these two anti-fracking campaigns face an uphill battle on Election Day as Ohio voters continue to reject these ideologies. It highlights growing trend from activist groups of staging anti-fracking campaigns in areas where no horizontal drilling and hydraulic fracturing is even occurring, a point recently made by the Wall Street Journal .  Whether we’re talking about misinformation and scare tactics around pipelines, compressor stations, or natural gas fired power plants, the end-game is all the same: these groups simply want to “Keep It in The Ground,” and ban-fracking across the country. Ohio voters have rejected this 83 percent of the time and it appears that trend will only continue in Youngstown and Waterville. http://everythingshale.com/news/2016/october/19/ohio-anti-fracking-ballot-measures-face-strong-community-opposition-in-november/ http://everythingshale.com/news/2016/october/19/ohio-anti-fracking-ballot-measures-face-strong-community-opposition-in-november/ Wed, 19 October 2016 10:14:42 http://everythingshale.com/news/2016/october/19/crude-prices-climb-as-us-stockpile-falls/ It's a fairly sizable amount, and it's the result of a significant decline in imports,†said Andy Lipow, an oil market analyst at Lipow Oil Associates in Houston. That's in part because climate activists had shut down Canadian pipelines carrying oil into the United States, he added. U.S. crude prices climbed $1.60 to $51.89 a barrel in early trading Wednesday, near its highest point in more than a year. Imported oil dropped below 7 million barrels a day in the week ended October 14, the EIA said, as refiners opted to use up stored commercial oil rather than purchase more imports to replace the missing barrels. Analysts reportedly had expected storage tanks to fill up another 2.2 million barrels. Comments comments http://everythingshale.com/news/2016/october/19/crude-prices-climb-as-us-stockpile-falls/ http://everythingshale.com/news/2016/october/19/crude-prices-climb-as-us-stockpile-falls/ Wed, 19 October 2016 10:14:34 http://everythingshale.com/news/2016/october/19/oil-companies-keep-paying-for-permian-land-high-water-numbers-analyst-says/ This time, it was Denver's SM Energy, announcing Tuesday it was picking up 35,700 acres in Howard and Martin counties, north and west of Midland, from private-equity backed and Houston-based QStar for $1.6 billion in cash and stock. The deal included 2,400 barrels per day of existing oil and gas production and works out to at least $42,000 per undeveloped acre, analysts said, stacking the purchase up among top prices this year. It's the second big announcement in a week. Last Thursday, Dallas-based RSP Permian bought Silver Hill Energy Partners, also headquartered in Dallas, and its 41,000 acres for $2.4 billion, or as much as $47,000 per undeveloped acre, according to some analysts. The investment banking firm Piper Jaffray called the purchase another among transformational acquisitions†this year. The two announcements again show how U.S. oil companies, regardless of the slump in oil prices, are fighting to get into the oil-rich Permian Basin, even as they pull rigs from other fields. They also show how much companies are willing to pay. The Permian is so hot right now,†said Ben Shattuck, an analyst with the energy research firm Wood Mackenzie. These are high-water numbers.†The Permian Basin's two sections, the Midland and the Delaware, are the most competitive markets in the country in tight oil right now, he said. RSP's buy was in the Delaware, the Permian's eastern lobe. There, year-to-date transactions have averaged $14,400 an acre, Piper Jaffray said ­- about $30,000 less than what RSP paid. It's the second big Permian purchase for SM Energy. Just two weeks ago, the company bought Denver- and Houston-based Rock Oil Holdings and its 24,783 acres in Howard County for $980 million. The two buys together buoyed SM's Midland Basin footprint to 82,450 acres. Moreover, much of the land is contiguous, allowing the company to drill longer horizontal wells and get out more oil. At the same time, SM Energy has pulled rigs from the Eagle Ford formation, west of Houston, and is now dumping its acreage in North Dakota's Williston Basin, too. Comments comments http://everythingshale.com/news/2016/october/19/oil-companies-keep-paying-for-permian-land-high-water-numbers-analyst-says/ http://everythingshale.com/news/2016/october/19/oil-companies-keep-paying-for-permian-land-high-water-numbers-analyst-says/ Wed, 19 October 2016 10:08:21 http://everythingshale.com/news/2016/october/19/federal-task-force-issues-recommendations-to-increase-the-safety-and-reliability-of-us-natural-gas-storage-facilities/ Overall, the report finds that while incidents at U.S. underground natural gas storage facilities are rare, the potential consequences of those incidents can be significant and require additional actions to ensure safe and reliable operation over the long term.†In particular, the report recommends that, except under limited circumstances, facility operators phase out single point of failure†designs that contributed to the inability to swiftly control and repair the Aliso Canyon leak. The report recommends natural gas storage facility operators conduct risk assessments, develop and implement transition plans to address high-risk infrastructure, and apply robust procedures to maintain safety and reliability while the transition to modern well design standards is occurring. The Task Force was co-chaired by Franklin Orr, Under Secretary for Science and Energy at the U.S. Department of Energy (DOE); and Marie Therese Dominguez, Administrator of the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA). Natural gas plays an important role in our nation's energy landscape, and we need to make sure the associated infrastructure is strong enough to maintain energy reliability, protect public health, and preserve our environment,†said Orr and Dominguez, who both visited the site of the Aliso Canyon leak shortly after it was controlled. No community should have to go through something like Aliso Canyon again. Companies operating natural gas storage facilities should adopt the recommendations as quickly as possible to reduce the risk of future leaks.†The Task Force pursued three primary areas of study: integrity of wells at natural gas storage facilities, public health and environmental effects from natural gas storage leaks, and energy reliability concerns in the case of future leaks. Three public workshops were held throughout the summer to hear from local and state level stakeholders, including gas storage operators and state regulators. These activities helped to inform the report released today. The report's 44 recommendations are separated across the three areas of study and are summarized in a fact sheet available  here . After providing Administration-wide support to the state response effort, in early 2016, the White House convened the Interagency Task Force on Natural Gas Storage Safety following the nation's largest ever natural gas leak at California's Aliso Canyon facility. This task force is consistent with the requirements codified by Congress in the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016, signed into law by President Obama in June 2016. The legislation created a task force led by the Secretary of Energy that consists of representatives from the Department of Transportation, the Environmental Protection Agency, the Federal Energy Regulatory Commission, the Department of Health and Human Services, Department of Commerce, the Department of the Interior, and from state and local governments. The work of the task force builds on the recommendations outlined in the Administration's 2015 Quadrennial Energy Review, which emphasized the urgent need to replace, expand, and modernize transmission, storage, and distribution infrastructure. Natural gas provides heat to millions of American homes and is expected to provide one-third of our nation's total electric power generation this year. Gas storage facilities are key components of a large and complex natural gas delivery infrastructure serving homes, offices, power plants, and industrial facilities. As noted in the report, there are approximately 400 active underground natural gas storage wells operating in 25 states of which, about 80 percent were constructed before 1980. Older wells are more likely to have single point of failure†designs, which offer less protection against leaks compared to more modern designs. The full report is available  here . PHMSA plans to issue interim regulations regarding underground natural gas storage in the coming months, incorporating API Recommended Practices 1170 and 1171. The Task Force's report is intended to inform PHMSA's phased rule-making process and to provide guidance to industry so that companies can begin implementing changes immediately. http://everythingshale.com/news/2016/october/19/federal-task-force-issues-recommendations-to-increase-the-safety-and-reliability-of-us-natural-gas-storage-facilities/ http://everythingshale.com/news/2016/october/19/federal-task-force-issues-recommendations-to-increase-the-safety-and-reliability-of-us-natural-gas-storage-facilities/ Wed, 19 October 2016 09:00:12 http://everythingshale.com/news/2016/october/19/halliburton-reports-tiny-profit-as-the-oil-bust-begins-to-fizzle-out/ The Houston company said it earned $6 million dollars in the third quarter after losing $3.2 billion in the second quarter and $54 million in the third quarter of 2014. Halliburton said that it maintained its global employment at about 50,000 workers, about the same as three months ago, ending the mass layoffs that swept through the company over the past several quarters. Halliburton has cut about 35,000 jobs in less than two years. Chief executive David J. Lesar said the worst appeared over after “the devastation our industry has faced over the past two year,”  but added the recovery is just slowly getting underway, and won’t be more visible until next year. I never thought I'd be so satisfied with barely making a profit,” Lesar said. Halliburton’s report kicked off the earnings season for the energy sector, which appears to have hit bottom in the second quarter and begun a slow climb back as oil prices have risen to about $50 a barrel and drilling rigs have returned to oilfields. Most analysts say the recovery will be slow and painful as the industry continues to work through a global surplus of oil and piles of debt run up during the boom. Halliburton reported revenues of $3.8 billion, essentially unchanged from the second quarter, but down 30 percent from $5.6 billion in the third quarter of 2015.  Revenues from North American operations rose 9 percent, but that growth was offset by declines in other parts of the world, the company said. As we look forward, we expect an increased commodity price to stimulate rig count growth,” Lesar said in a prepared statement. “In the near term, we remain cautious around fourth-quarter customer activity due to holiday and seasonal weather-related downtimes. However, it does not change our view that things are getting better for us and our customers.” The bleeding from job reductions seems to have largely stopped with Halliburton reporting a global employee count of 50,000 workers, nearly the same as three months ago. Halliburton has eliminated more than 35,000 jobs in less than two years. Halliburton’s shares rose 5 percent in morning trading. The stock was up $2.38 a share to $49.45 at about 10:30 a.m. Central Comments comments http://everythingshale.com/news/2016/october/19/halliburton-reports-tiny-profit-as-the-oil-bust-begins-to-fizzle-out/ http://everythingshale.com/news/2016/october/19/halliburton-reports-tiny-profit-as-the-oil-bust-begins-to-fizzle-out/ Wed, 19 October 2016 06:06:15 http://everythingshale.com/news/2016/october/19/looking-for-a-pop-from-premium-gasoline-look-again/ It may not change human behavior, but if it did, a recent AAA report on the benefits of premium gasoline might cut into what on paper looks like a pretty profitable business. In the study, released in the middle of last month, AAA — the long-standing interest group that looks at automobile issues through the lens of the car owner and driver — doesn’t mince words. The amount of money the average American spends on premium gasoline in cars that don’t need it is “wasted.” In the last year, it puts that figure at $2.1 billion. “Today, many motorists believe that premium grade gasoline will give engines designed to run on regular a variety of benefits, including more power, lower tailpipe emissions, and better fuel economy.” The paper spells out in detail the testing methods used by AAA, and the answers are pretty unambiguous in its “Key Findings” section. Verbatim… Does an engine designed to operate on Regular gasoline produce more horsepower when operated on Premium? No consistent differences in maximum horsepower were recorded. Does an engine designed to operate on Regular gasoline get better fuel economy when operated on Premium? No significant differences in fuel economy were recorded. Does an engine designed to operate on Regular gasoline produce fewer tailpipe emissions when operated on Premium? No consistent differences were recorded. The report is more verbose than that, but once you make those points so bluntly, there isn’t too much more that’s needed to be said. Yet, marketing of premium continues. Why? Numbers tell a pretty straightforward story. According to AAA, premium is on average 23% more than the cost of regular at the pump. Specifically, on October 12, the daily AAA survey of retail gasoline prices showed a nationwide price for retail gasoline of about $2.25/gallon. For premium, it was about $2.75/gallon, almost 23% exactly. Compare that 50-cent spread to some other numbers. On October 11, the Platts daily assessments for New York harbor unleaded RBOB vs. premium RBOB showed a spread of about 10 cents. But get to the wholesale level — the rack — and the spread starts to blow out, but not at any sort of consistent level. In Houston, the Platts range of rack prices for unleaded was about 21 cents on the low, but about 47 cents on the high. In Philadelphia, it was 16 cents on the low, and about 36 cents on the high. Note that rack prices are affected by numerous factors, many of them regional in nature for which no broader conclusion can be reached. So it’s not surprising that the road from a 10-cent spot market spread to a 50-cent retail spread isn’t exactly consistent. Premium looks like a profitable business, but long-time wholesale and retail marketing consultant Gary Bevers of Beversco says despite those apparent profits, premium isn’t that great a deal for retailers. First, premium sales might be only 1,200 gallons per month at an average station; those stations might be doing 20,000 gallons of regular in a week. “So premium sits in the tank and just doesn’t turn as fast,” he said. Additionally, the trucking cost is the same as regular, but a station might not even use the full capacity of the truck. “It’s a business based on volume,” Gary said. And premium doesn’t provide a lot of that. The AAA report on premium gasoline contrasts sharply with a report that came out a few weeks earlier touting the advantages of gasolines that have a TOP TIER designation. These are the ones you see touted by name-brand oil companies, that the additives in their fuel — which you will almost never find at non-name brand retailers — are worth the extra few cents per gallon. The additives are just one of the reason why a company like BP will sell its fuel at the rack to its branded customers for a few cents more than the non-additive gasoline it will sell at the same rack to other retailers — Sheetz, Liberty, Racetrac — for a few cents less. It isn’t just that; the industry believes there is a value to a brand like Exxon that needs to be captured in the wholesale price. “Among brands tested, non-TOP TIER gasolines caused 19 times more engine deposits than TOP TIER brands after just 4,000 miles of simulated driving,” the report said. “Such carbon deposits are known to reduce fuel economy, increase emissions and negatively impact vehicle performance, particularly on newer vehicles. To protect vehicle investments, AAA urges drivers to use a gasoline that meets TOP TIER standards for engine cleanliness and performance.” But the report goes on to say those considerations are important to only 12% of drivers. So you’ve got some buyers paying 50 cents more for premium gasoline that does almost nothing, and only 12% paying a few cents more for gasoline that actually does something. An interesting side issue is being tracked by the JP Morgan Chase Institute, which has now put out its latest report on what Americans are doing with their gasoline savings. JP Morgan Chase — drawing on banking data — said retail gasoline prices were down 25% in 2015 from 2014, but spending at gas stations only declined 19%. Why? The report cited several factors: lower prices encourages more driving, which means more gasoline consumption; savings at the pump can translate into greater purchases at the convenience stores, as the extra cash goes into buying beef jerky and a Sizzli for breakfast at Wawa; and possibly — but not definitely — buyers consumed more expensive gasoline. “While there is historical evidence that people switched to less expensive gas when gas prices increased, it is unclear whether people purchase more expensive gas in a low gas price environment,” the report said. It’s no wonder Americans get so manic when gasoline prices go up, because for a lot of them, the buying habits when prices are low are already pretty hard to figure out. The post Looking for a pop from premium gasoline? Look again appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/19/looking-for-a-pop-from-premium-gasoline-look-again/ http://everythingshale.com/news/2016/october/19/looking-for-a-pop-from-premium-gasoline-look-again/ Wed, 19 October 2016 00:01:32 http://everythingshale.com/news/2016/october/18/despite-claiming-otherwise-ceres-new-data-show-water-use-from-fracking-declining/ A Boston-based green “investors” group called Ceres, which is backed by prominent anti-fossil fuel activist organizations, has recently published its latest attempt to portray fracking as a threat to water supplies. But despite Ceres’ best efforts, not only does the water used for fracking still account for only a fraction of one percent of the total water used in the United States, it’s also significantly declining . Ceres’ updated data builds off its 2014 report, “ Hydraulic Fracturing and Water Stress: Water Demand by the Numbers ,” ( debunked here ) that was an update to a previous version of the report from 2013 ( debunked here ).  Here is what you need to know about their updated data: #1. Water usage for fracking is in decline Ceres  states, “A total of  358 billion gallons of water was used for hydraulic fracturing  over the 5-year timeframe, equivalent to the annual water needs of 200 mid-sized cities.” While it is clear that the intent of the update is to show that fracking is a threat to water supplies, a chart included in the release  shows a steep decline in water usage since 2014. Of course many will likely point to low commodity prices for the decline, but there is more to the story. Ceres acknowledges that overall water usage is on the decline, but they attempt to save themselves by claiming that “average water use per well doubled.” But in the process they also admit that may be a result of advances in drilling technology that allow for longer wellbores, which in turn, is allowing oil and natural gas developers to drill fewer wells . That means water use overall is going down. Ceres also makes no mention that the decline also has something to do with oil and natural gas developers finding efficiencies and deploying technological advancements such as  water recycling , ultimately reducing water usage. As a U.S. Government Accountability Office report suggests, even as the use of natural gas grows, water use will continue to be managed effectively, especially during fracking. From the GAO report : “These technologies include the use of waterless and water-efficient fracturing fluids such as those utilizing liquefied petroleum gas (LPG) and foams, and the technique of channel fracturing, which has been shown to improve operational efficiency while reducing material cost and water usage in selected formations” ( p. 19 ) #2. Ceres (again) fails to provide context on water use As with their previous report, the updated edition goes out of its way to avoid context. For instance, chief among their claims is that since 2011 : “A total of  358.4 billion gallons of water  was used for hydraulic fracturing, equivalent to the annual water needs of 200 mid-sized cities.” But researchers at Duke University find that the amount of water used in the fracking process amounts to a fraction of what other industries use, and well under one percent of total fresh water consumption in the United States. From the study: “This estimated water use is 0.87% of the total industrial water used in the United States and only 0.04% of the total fresh water use per year in the United States.” ( page 3 , emphasis added) Further, another recent report  from the University of Texas finds that fracking is actually helping to shield Texas from water shortages because it is allowing the state to move away from using more water intensive energy resources. #3. New report discredits Ceres’ own previous predictions A central tactic of Ceres reports has been to make scary sounding predictions about future water needs. But this new update shows that those scenarios are not taking place. For example, in their 2014 report, Ceres was making some dire-sounding future predictions for water usage in Weld County, Colorado. From that report : “Eighty-nine percent of the water used for hydraulic fracturing in Colorado was concentrated in two counties: Weld and Garfield. Overall water demand for hydraulic fracturing in the state is forecast to double, to six billion gallons by 2015, more than twice what the city of Boulder uses in an entire year.” But their new update shows that in 2015, total water used for fracking in Weld County amounted to 4.8 billion gallons. And while Ceres predictions were significantly off, Colorado officials have also looked into the amount of water needed for fracking, finding that : “[t]he amount of water currently used for hydraulic fracturing in Colorado is a small portion of the total amount of water used . In 2010, it reflected slightly less than one-tenth of one percent of the total water used. In 2015, it is projected to increase by 4,800 acre-feet to slightly more than one-tenth of one percent of the total water used.” Conclusion It’s worth pointing out again that while the Ceres coalition does include some institutional investors – mostly public-employee pension funds – the group also includes a large number of activist groups that actively oppose oil and natural gas development and fracking, a fact you won’t find disclosed in the Ceres report. Many of these  members  – including the  Sierra Club ,  Friends of the Earth ,  Natural Resources Defense Council ,  American Rivers  and others — are actively working to ban fracking. Besides these members, Ceres receives financial support from some of the most well-known funders of anti-fracking activism. According a recent  annual report , Ceres’ donors include the  Park Foundation , the  Energy Foundation , the  Tides Foundation , and the  Rockefeller Brothers Fund . Water usage is an issue that states and energy developers take very seriously. That’s why the oil and natural gas developers are  continually innovating solutions  to  reduce  its water use impacts,  enhance recycling , and use other non-fresh water sources. Yet, rather than highlight innovations that ultimately provide value to the companies and communities, Ceres cherry-picks their data to construct a false narrative that intends to invoke blame on hydraulic fracturing for America’s water stress in what is little more than a transparent activist-driven campaign to scare investors away from energy holdings.   http://everythingshale.com/news/2016/october/18/despite-claiming-otherwise-ceres-new-data-show-water-use-from-fracking-declining/ http://everythingshale.com/news/2016/october/18/despite-claiming-otherwise-ceres-new-data-show-water-use-from-fracking-declining/ Tue, 18 October 2016 15:48:06 http://everythingshale.com/news/2016/october/18/the-permian-premium-are-recent-high-prices-justified/ Activity in the Permian is high by all measures except new lease filing. Asset transactions involving Permian acreage ranged from $10,00 to $58,000 per net acre in 2016. Analysis of Wolfcamp B type curve production for recent long lateral wells in Martin County suggests land NPV from $52,000 to $269,000 per acre at $30 and $80 per barrel, respectively. NPV and acreage valuation estimates are sensitive to the decline curve model used to forecast production. Pioneer Wolfcamp B wells drilled in Martin County have a breakeven oil price of $21.40 per barrel, including land acquisition costs. Specify that this is for the new acreage. Because of more expensive land acquisition costs, the breakeven oil price for QEP in Martin County would be $31.50 per barrel. Activity in the Permian is higher than in any other U.S. resource play by nearly all measures. A quick look at nationwide rig counts shows ten of the top fifteen counties are in the Permian. Eight of the top fifteen counties for new drilling permits approved within the last six months are in the Permian. And eight of the top fifteen counties for wells with first production within the last 12 months are in the Permian. The only category in which the region does not figure prominently is leasing. It boasts only four of the top fifteen counties for lease filings within the last six months, with most of those on the edges of the play. [Figure 1 – Active rigs and new drilling permits, wells with first production, and new leases in the last six months grouped by county. Red stars indicate counties in the Permian (as Oct. 16, 2016).] The lack of permitting activity does not mean that acreage is failing to change hands. The second and third quarters of 2016 have seen more than a dozen significant asset transactions involving Permian acreage with big deals being announced every few weeks. Many of the announcements highlight the fact that the vast majority of acquired acreage is held by production (HBP). The upside of HBP acreage for buyers is that they don’t have to develop the acreage quickly in order to maintain access, but it also puts upward pressure on the price paid per acre. Buyers are forced to negotiate with other operators who often have a better idea of what the acreage is worth than mineral owners. This situation is partially explained by the long history of oil production in west Texas. The area has seen drilling with more or less enthusiasm from the 1940’s and many of those old wells have been worked over in recent years and brought back online to generate cash flow to fund new drilling and hold leases until they can be flipped. Because of the high potential production of Permian reservoirs like the Wolfcamp, and the business-to-business nature of acreage transactions, the price paid per acre this year has ranged from around $7,000 to $58,000. The highest price paid so far was by QEP resources, who paid more than $58,000 per net undeveloped acre for core Midland Basin acreage. That price raised some eyebrows and left people wondering how much the acreage was worth and how high prices could go. A recent acquisition by Pioneer in the same county provides useful information to evaluate the QEP transaction and independently estimate acreage value and singe well economics in the area. [Table 1 – Recent Permian acreage transactions (includes mergers and acquisitions). Only Concho ($50,000) and PDC ($35,000) disclosed the price paid per flowing barrel. $35,000 was used when the price was not disclosed. EOG details include acreage acquired outside the Delaware Basin.] Pioneer’s June announcement that it had paid Devon Energy $435 million for 28,000 acres in Martin and Midland County highlighted the fact that the acquisition enabled them expand their successful drilling recipe for Wolfcamp B wells with a long-lateral design to 70 new locations on 7,000 acres. This information implies that approximately 100 acres are required to drill each Wolfcamp B well that uses the preferred design. Applying this to the price paid per net acre ($14,285) results in a land acquisition cost of $1.43MM per well. In their August investor presentation Pioneer reported drilling and completion and facilities costs of $7.5MM and $0.4MM, respectively. That brings the total cost per ~9,000 ft Wolfcamp B well to $9.33MM. So how profitable are Wolfcamp B wells in Martin County drilled and completed according to the Pioneer recipe? An estimate starts by forecasting production from wells as similar as possible to those that Pioneer plans to drill in the future. For this, 18 Martin County wells were identified in the Drillinginfo database. [Table 2. Five-year total recovery volumes (oil + gas at 6:1 BOE for the best and worst individual wells and the type curve using the three different forecast models. Oil and gas production was forecast separately and combined using 6:1 BOE, although these were all predominantly oil producers (65% to > 80%).] The 18 wells all had first production in 2015 or 2016, perforated interval lengths greater than 7,500 ft, at least six months of reported production, and well true vertical depths between 9,200 to 9,800 feet, which isolates wells targeting the Wolfcamp reservoir. Five year P50 production forecasts performed for each well individually using the Arp’s model ranged from 225,844 bbls to 863,334 bbls, with a type curve P50 forecast of 525,300 bbls (Figure 2, Table 2). Production forecasts were also made using Modified Arp’s (Hyperbolic to Exponential decline) and Duong models. The Modified Arp’s forecasts tended to be the most pessimistic, Duong the most optimistic, with Arp’s in between (Figure 3, shown for oil only). [Figure 2. Drillinginfo probabilistic decline curve analysis tool. Martin County Wolfcamp B type curve fit forecast volume over 5-years using the Arp’s model. 200 simulations of Arp’s forecasts that fit within the observations were performed and compared to generate P50 estimates.] [Figure 3. Range of individual well forecasts and the type curve for oil production using three different forecasting models. The modified Arp’s model (terminal exponential decline) was the most pessimistic, the Duong model the most optimistic, with the standard Arp’s model in between.] The next step for determining profitability within five years is to calculate well net present value (NPV) for the different forecast volumes at different oil prices. This quickly turns into a multidimensional problem so moving forward we focus solely on the forecasts made with the Arp’s model. After deducting $9.33 MM in cost from five years of revenue estimated at $30, $40, $60, and $80 per barrel oil price, the NPV for Wolfcamp B wells in Martin County ranges from -$3.5MM in the worst cast scenario (worst individual well forecast at $30 per barrel) to $47MM for the best cast scenario (best individual well at $80 per barrel, Table 3). The type curve NPV ranged from $3.7MM to $25MM at $30 and $80 per barrel, respectively. If the land acquisition cost is removed, or a longer forecast period is used (10 years) the independently calculated type curve NPV agrees well with Pioneer’s claim that wells should see a pre-tax internal rate of return in excess of 50% at July strip prices ($45 per barrel). [Table 3. Net Present Value (NPV) of Pioneer Wolfcamp B wells drilled in Martin County using 5 years of forecasted production (Arp’s model) and a 10% discount rate. Costs include reported drilling and completion cost ($7.5MM) and facilities cost ($0.4MM), and estimated land acquisition cost ($1.43MM). Taxes and royalty burden are not considered.] So how much is the acreage worth? By using the type curve estimated revenue, considering only drilling and completion and facilities costs, and assuming of 100 acres are required per well we can produce an estimate of acreage value that can be compared with purchase prices. NPV per acre for Wolfcamp B acreage ranges from approximately $52,000 to $269,000 at $30 and $80 per barrel oil prices, respectively (Table 4). Although the $58,000 per acre price paid by QEP in Martin County exceeds the land NPV at $30 per bbl, the company should produce the acreage profitably in the present price environment. [Table 4. Land Net Present Value under a range of oil prices for Martin County Wolfcamp B acreage. Assumes 100 acres of land per well. Drilling, completion, and facilities costs are included (all costs but land), with a 10% discount rate.] However, assuming QEP also allocates 100 acres per Wolfcamp B well, their per well land acquisition costs are significantly higher than Pioneer’s, $5.8MM compared with $1.43MM, respectively. This reduces QEP’s internal rate of return significantly and elevates the breakeven price for a QEP well to $31.50, compared with $21.40 for Pioneer, assuming similar well design, production results, and $7.9MM drilling, completion, and facilities cost. If oil prices rise in the short to medium term QEP’s decision to invest heavily in Martin County will look like a great business decision. At current prices however the there are only small profits to be made. contrast, Pioneer appears to have made a great deal with a large amount of premium acreage acquired at a relatively low price per acre. This puts Pioneer in a good growth position whatever direction commodity prices take. Although the desire to acquire Permian assets is unlikely to end soon given the favorable economics of the region and recent low oil prices, the ability for companies without deep pockets or wealthy backers to move into the area remains limited. However, as long as oil prices remain low we should continue to see companies sell less profitable, non-Permian assets to finance Permian acquisitions. This will likely keep Permian acreage prices breaking records until we see an oil price recovery. http://everythingshale.com/news/2016/october/18/the-permian-premium-are-recent-high-prices-justified/ http://everythingshale.com/news/2016/october/18/the-permian-premium-are-recent-high-prices-justified/ Tue, 18 October 2016 14:30:18 http://everythingshale.com/news/2016/october/18/carnegie-mellon-study-there-is-no-support-for-activists-claims-on-radon-and-marcellus-gas/ Researchers from Carnegie Mellon University recently released a report concluding that “there is no support” to back up activists’ claims about cancer risks from Marcellus shale gas. This is kind of a blast from the past for EID, as it is the latest study to debunk the work of Dr. Marvin Resnikoff , who made a name for himself several years ago by superficially heightening concern over radon in the Marcellus. Calling out Resnikoff’s study in particular, the Carnegie Mellon report states that he “provided insufficient documentation of the methodology used” and “[a]t this time there is no support for the high mortality argument offered by Resnikoff.” The researchers assert that previous estimates of cancer risk are “speculative” at best, rely on non-peer reviewed conclusions, and overestimate radon exposure of most Marcellus natural gas customers. They find that the difference between radon levels in the average American home compared to a home using Marcellus natural gas is “insignificant.” They add that lung cancer risk to those using Marcellus natural gas “is not high enough to cause a measureable change” in the number of people who are likely to develop the disease in the region. These conclusions align with assertions made by other respected institutions, including: U.S. Geological Survey : Resnikoff “ relied on theoretical calculations utilizing limited data from geologic analogs.” New York Dept. of Environmental Conservation : Radon levels in Marcellus natural gas are “essentially equal to background values” and “do not indicate an exposure concern for workers or the general public.” Pennsylvania Department of Environmental Protection (PADEP) : “ [T]here is little potential for additional radon exposure to the public due to the use of natural gas extracted from geologic formations located in Pennsylvania .” The report goes on to debunk claims by anti-fracking activists that hydraulic fracturing in the area is linked to high levels of radon that have been found in some Pennsylvania homes. The Carnegie Mellon report is very clear that: “Some of the highest indoor concentrations have been found in the Northeast. The major routes of radon entry to homes are cracks and joints in home basements or foundations.” That squares with what many experts have said. Kevin Stewart, director of environmental health at the American Lung Association of the Mid-Atlantic noted that high levels of radon have been observed in homes “going back to the 1980s” well before fracking was occurring in the area. The  Pennsylvania Department of Environmental Protection (DEP)  has long documented radon in homes and explained how it can seep in through  the soil : “Radon is a radioactive gas.  It comes from the natural decay of uranium that is found in nearly all soils. It typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation. Your home traps radon inside, where it can build up.  Any home may have a radon problem. This means new and old homes, well-sealed and drafty homes, and homes with or without basements.  Radon from soil gas is the main cause of radon problems .” (emphasis added) If the absence of Resnikoff’s work from the hydraulic fracking debate over the past few years casted any doubt on the legitimacy of his claims, this latest report should solidify them as unfounded.       http://everythingshale.com/news/2016/october/18/carnegie-mellon-study-there-is-no-support-for-activists-claims-on-radon-and-marcellus-gas/ http://everythingshale.com/news/2016/october/18/carnegie-mellon-study-there-is-no-support-for-activists-claims-on-radon-and-marcellus-gas/ Tue, 18 October 2016 13:31:52 http://everythingshale.com/news/2016/october/18/market-currents-india-s-growing-significance/ 1) Rosneft, with a group of investors, has struck a deal to buy Essar’s Vadinar refinery – the second-largest in India. Rosneft, Russia’s largest oil producer, is purchasing the 405,000 bpd refinery as it pursues a strategy attempted by other leading global producers: to set up roots in large, growing oil-consuming nations. The port of Vadinar has five leading sources of waterborne deliveries; Iraq accounts for a quarter of volume this year, with Iran just behind at 23 percent. Venezuelan crude accounts for just under 20 percent, and with Nigerian and Kuwaiti volumes included, these five countries account for nearly 90 percent of flows into Vadinar this year. 2) As the graphic below illustrates (based on IEA data), India is projected to be the world’s fastest-growing oil consuming nation through 2040. Granted, quite a bit can happen over the coming years to usurp this, but given India’s population (hark, 1.3 billion people), its exceptionally low vehicle penetration rate  (149 motor vehicles per 1000 people, compared to 781 in the U.S.), and its need to import the vast majority of the oil it consumes, it is set to remain an exceptionally attractive area for growth. 3) Azerbaijan says it supports an OPEC / non-OPEC coordinated cut, and that it will not increase oil production. This is convenient, given that its September oil production is 10.2 percent lower than the prior month, and production of commercial oil was down 0.3 percent year-on-year . 4) While Iranian crude exports continue to remain strong to leading recipients China and India, our ClipperData below illustrate how exports into Europe continue to rise also. With crude discharged in 11 European destinations through September of this year, new countries are being added every month. In October, it is Ukraine’s turn, with ~500,000 bbls heading to the port of Kerch. 5) Although oil and gas infrastructure was able to avoid the impact of Hurricane Matthew, power outages were widespread. At its peak, roughly 2.5 million residential, commercial, and industrial electricity customers were  without power across five states . Florida, who received the brunt of Matthew’s force, saw the largest outages, with nearly one million customers (10 percent of all customers in the state) without service. As for South Carolina, its outages peaked at 800,000 customers, one third of the state's total customers. Comments comments http://everythingshale.com/news/2016/october/18/market-currents-india-s-growing-significance/ http://everythingshale.com/news/2016/october/18/market-currents-india-s-growing-significance/ Tue, 18 October 2016 12:06:44 http://everythingshale.com/news/2016/october/18/schneiderman-on-the-defensive-as-exxonknew-campaign-begins-to-backfire-on-ags/ On the heels of last week’s federal court order subjecting Massachusetts Attorney General Maura Healey and parties involved in the #ExxonKnew campaign to judicial scrutiny, yesterday ExxonMobil asked a federal court to join the Green 20 ringleader – New York Attorney General Eric Schneiderman – as a defendant in the case and invalidate the subpoena he issued in 2015. Explaining the basis for the discovery order, Bloomberg reported today that “The timing of Exxon’s filing [against Schneiderman] wasn’t happenstance.  Last week, U.S. District Judge Ed Kinkeade in Fort Worth said in writing that he was concerned that Healey may have engaged in a ‘bad faith’ pursuit” of the company given her biased and prejudicial public rhetoric on the matter.  As a result, Schneiderman, Healey, and other participants in the #ExxonKnew cabal will be compelled to produce internal emails and other documents and, potentially, sit for depositions. In other words, the tables have turned, and the “investigators” themselves will now be investigated about what they knew, said and did in the run-up to launching their campaign. Much like the successful filing against Healey, ExxonMobil’s motion to join Schneiderman in the case lays out compelling evidence that the New York AG was also acting (leading the coalition) in “bad faith,” and that he and Healey“joined together with each other as well as others known and unknown to conduct improper and politically motivated investigations of ExxonMobil in a coordinated effort to silence and intimidate one side of the public policy debate on how to address climate change.” While recent Freedom of Information Act (FOIA) requests have provided quite of bit of insight into the genesis and execution of the #ExxonKnew campaign, formal discovery processes are certain to expose a whole lot more.  We know, for example, that activists like the Union of Concerned Scientists’ Peter Frumhoff were lobbying state attorneys general to bring actions designed to “hold fossil fuel companies legally accountable” as early as July of 2015, roughly four months before Schneiderman launched his crusade.  The extent to which these efforts and other collusive activities led to a “bad faith” decision to investigate ExxonMobil remains to be seen.  But we are about to find out. Since the documents are fairly long and cover a lot of ground, EID has compiled a top three things you need to know. #1. Schneiderman, Healey, and other AGs held “unprecedented briefings” for press; then tried to hide collusion with activists through closed door meetings and improper “Common Interest Agreement” secrecy pact As Exxon’s complaint explains , “It is customary for law enforcement officials to maintain confidentiality of their investigations, both to protect the integrity of the investigative process and to avoid unfair prejudice to those under investigation .” (emphasis added, P. 9) But Schneiderman has repeatedly disregarded this widely-established precedent. Mere hours after Exxon received Schneiderman’s subpoena, The New York Times was reporting on it, noting that it focused on “the company’s own long running scientific research” on climate change. Only a week later, Schneiderman appeared on PBS NewsHour to proclaim that his investigation of the company centered on his concerns that Exxon had “shifted [its] point of view” on climate change over the years.  Less than a month later, Schneiderman attended a Politico event in New York where he was openly prejudicial in his rhetoric about his investigation into ExxonMobil. If that’s not enough, Schneiderman and his Green 20 coalition tried to make their investigations an even bigger story by announcing their grand, partisan plans at a March 29 th press conference with Al Gore. At the event, Schneiderman and Healey made it very clear that they had already determined Exxon’s guilt before the investigation ever began – and as Exxon puts it in its memorandum , this shows “Schneiderman has no intention of fairly evaluating ExxonMobil’s substantial production of documents.” (P. 3-4) Exxon’s complaint points out that activist lawyer Matt Pawa and Peter Frumhoff of the Union of Concerned Scientists (UCS) briefed the AGs behind closed doors ahead of their March 29 th press conference. But, of course, the AGs didn’t want anyone to know about that. When Pawa wrote to Schneiderman’s office to inform them he’d been asked by a Wall Street Journal reporter about his involvement, Lem Srolovic of Schneiderman’s office told him , “My ask is if you speak to the reporter, to not confirm that you attended or otherwise discuss the event.” The complaint goes on to mention that #ExxonKnew activists attended a closed-door meeting in January 2016 at the Rockefeller Family Fund headquarters in New York, where they brainstormed ways they could “establish in [the] public’s mind that Exxon is a corrupt institution” and “delegitimize [ExxonMobil] as a political actor.” As part of their effort to keep their correspondence secret, the AGs also signed on  to a Common Interest Agreement which, as Exxon’s memorandum explains, clearly displays the political motivation behind these investigations: “Public records requests also have revealed that the Green 20 executed an agreement, which was designed to shield the group’s communications from public disclosure. According to the agreement, the Green 20 shared two goals, neither of which relates to any legitimate law-enforcement objective : ‘limit[ing] climate change’ and ‘ensuring the dissemination of accurate information about climate change.’” (P. 3) (emphasis added) #2. The “new” alleged focus of Schneiderman’s fishing expedition is at odds with current SEC regulations & Financial Accounting Standards Board (FASB) rules Having abandoned his initial focus on what “Exxon knew” about climate change, Schneiderman now contends that his investigation is about what Exxon projects for the future and how it accounts for its reserves.  Specifically, he finds fault with the company’s stated position that, based on current conditions, none of its reserves will be “stranded” by climate-related restrictions on production.  Ironically, however, Schneiderman’s argument directly contradicts federal securities regulations and Financial Accounting Standards Board (FASB) rules. From Exxon’s complaint : “Those [SEC] regulations prohibit companies like ExxonMobil from considering the impact of future regulations when estimating reserves. To the contrary, they require ExxonMobil to calculate its proved reserves in light of ‘ existing economic conditions, operating methods, and government regulations …(emphasis added)…Attorney General Schneiderman’s theory of ‘massive securities fraud’ in ExxonMobil’s reported reserves cannot be reconciled with binding SEC regulations about how those reserves must be reported.” (P. 32) To put it bluntly, as the memorandum does , “The desire of Attorneys General Schneiderman and Healey to impose liability on ExxonMobil for complying with SEC disclosure requirements, and the accounting methodologies incorporated in them, would create a direct conflict with federal law .” (emphasis added, P.6) #3. Schneiderman changed the focus of his investigation no less than three times, which demonstrates the political nature of his crusade As outlined above, Schneiderman spectacularly changed his purpose for investigating Exxon at least three times: first he said it was about what “Exxon knew” about climate change back in the 1970s and 1980s. When that didn’t really work out he decided it was about that Exxon “predicts” – but when that argument turned out to be a flop, he decided it was actually about what Exxon “failed to predict.” As Exxon’s memorandum explains about this , “This sharp investigative shift shows that the Attorney General is simply searching for a legal theory that will justify his efforts to use legal tools to pressure ExxonMobil to alter its position on matters of public concern. Attorney General Schneiderman’s new theory of securities fraud has nothing to do with the prior focus of his investigation on ExxonMobil’s historic climate change research. And without offering – or possessing – any supporting evidence whatsoever, the Attorney General inappropriately opined to The New York Times that there ‘may be massive securities fraud’ at ExxonMobil based on its estimation of its oil and gas reserves and valuation of its assets.” (P. 4) As it turns out, Schneiderman’s investigation falls well outside of a now-expired statute of limitations too, as Exxon’s complaint notes. The bottom line Due to the federal district judge’s  court order last week  there’s no question we’ll find out a lot more about the inner workings of the #ExxonKnew campaign as it will expose additional documents, depositions, and inquiries. As  Wall Street Journal  columnist Holman Jenkins Jr. put it in  a recent interview , this could be “very embarrassing” for Healey, and as for Schneiderman: “Eric Schneiderman is somewhat embarrassed and in retreat has basically abandoned his argument. Plus he’s been embarrassed by release of an email showing that he tried to flog this Exxon case when he was out fundraising for his hoped-for governor’s bid in a couple of years. That looks like it’s not gonna come off.  He’s lucky just to come away from this with egg on his face.” It’s been clear for months now that Healey and Schneiderman’s incentive is politics, rather than anything legitimately legal, and that they are working closely with each other and outside activists to make this climate crusade happen. These filings are the best step to confirm that fact. http://everythingshale.com/news/2016/october/18/schneiderman-on-the-defensive-as-exxonknew-campaign-begins-to-backfire-on-ags/ http://everythingshale.com/news/2016/october/18/schneiderman-on-the-defensive-as-exxonknew-campaign-begins-to-backfire-on-ags/ Tue, 18 October 2016 12:02:31 http://everythingshale.com/news/2016/october/18/us-shale-plays-see-slowest-production-decline-in-over-a-year-eia-says/ In a report this week, the EIA said it expects seven plays in Texas, North Dakota and elsewhere to put out 30,000 fewer barrels each day in November, bringing combined output in those regions to 4.43 million barrels a day. That's the gentlest decline since the oil production numbers began falling in May 2015. And it's well below the average drop of 110,000 barrels a day from December to August. Drillers have redeployed 116 oil rigs into domestic fields since May, as crude prices have risen, and the activity may accelerate after the Organization of Petroleum Exporting Countries reached a proposed agreement to cap output last month in Algiers. At the OPEC meeting, the Saudi-led cartel signaled it would resume its role trying to manage global oil supply, a strategy change that marks a clear turning point for oil markets after Saudi Arabia and its Persian Gulf allies spent two years waiting for low energy prices to naturally curb high-cost oil production in the United States and elsewhere. Michael Wittner, an oil market analyst at Société Générale said that reversal is likely more important than whether an OPEC deal to freeze actually materializes by the end of November, OPEC's self-imposed deadline for ironing out the details of the agreement. They've gone beyond talking up the market,†Wittner said. They're trying hard to make a deal. It's a very big signal to the market.†If you're a producer or a service company, you want it to happen,†he said. Société Générale believes domestic crude production, including from fields outside of the shale plays, will hit bottom in the second quarter of next year. Several firms have said they'd increase oil field spending and boost drilling activity if crude rose to between $50 and $60 a barrel. British bank Barclays noted some U.S. oil explorers could see double digit†growth in oil production without taking on new lines of credit if domestic crude prices stayed above $50 a barrel. Comments comments http://everythingshale.com/news/2016/october/18/us-shale-plays-see-slowest-production-decline-in-over-a-year-eia-says/ http://everythingshale.com/news/2016/october/18/us-shale-plays-see-slowest-production-decline-in-over-a-year-eia-says/ Tue, 18 October 2016 10:18:21 http://everythingshale.com/news/2016/october/18/brace-yourself-3rd-quarter-results-are-about-to-be-released/ Energy companies begin to release their third-quarter earnings this week after a brutal second quarter of falling revenues, deep losses and thousands of layoffs. At the time, executives said, said those dismal reports represented that bottom of the worst industry downturn in 30 years.   The industry recovery so far has been driven by the rebound in crude prices, which sank to a low of $26 a barrel in February and recently broke above $50 a barrel. Throughout the quarter, prices hovered from $40 to $50 a barrel, hardly boom times but high enough for the most efficient companies to make some money. More than 100 rigs have gone back into operation in U.S. oil and gas fields since May, when the rig count reached a low of about 400, according to the Houston oil services firm Baker Hughes. So what does this mean for the third quarter? Jordan Blum talked with analysts who make their predictions at HoustonChronicle.com . Comments comments http://everythingshale.com/news/2016/october/18/brace-yourself-3rd-quarter-results-are-about-to-be-released/ http://everythingshale.com/news/2016/october/18/brace-yourself-3rd-quarter-results-are-about-to-be-released/ Tue, 18 October 2016 09:29:06 http://everythingshale.com/news/2016/october/18/oasis-petroleum-launches-stock-sale-to-finance-acquisition/ The Houston-based exploration and production company has begun selling 48 million shares of common stock, the company announced Tuesday. The company anticipates gross proceeds of $518.4 million. Oasis is buying 55,000 net acres in North Dakota’s Williston Basin from SM Energy Co. Reuters reported Tuesday that SM Energy’s deal with Oasis is worth $785 million. Also on Tuesday, SM Energy announced it will buy 35,700 acres in Texas’ Permian Basin for $1.6 billion. In a statement, Oasis said if its planned acquisition of SM Energy’s assets doesn’t occur, it will use proceeds from the stock sale for “general corporate purposes, which may include funding a portion of the company’s 2017 capital budget.” Comments comments http://everythingshale.com/news/2016/october/18/oasis-petroleum-launches-stock-sale-to-finance-acquisition/ http://everythingshale.com/news/2016/october/18/oasis-petroleum-launches-stock-sale-to-finance-acquisition/ Tue, 18 October 2016 09:24:52 http://everythingshale.com/news/2016/october/18/ohio-regulators-deliver-undoubtedly-unconventional-decision-in-firstenergy-bailout-case/ In a long-awaited decision, the Public Utilities Commission of Ohio (PUCO) yesterday approved a $600-million electricity rate plan for FirstEnergy. One read of the decision is, regulators killed the Ohio-based utility giant's massive bailout and ordered the utility to modernize its grid. If accurate, this would be an incredible victory: Dirty power plants would not be subsidized, FirstEnergy would not be rewarded for its poor business decisions, and the company would invest in measures that increase efficiency and welcome clean-energy resources. Ah, if the PUCO order were only so clear. On the one hand, it does seem the regulators are giving FirstEnergy $600 million upfront and requiring it to spend those funds on grid-modernization programs the PUCO will approve in the future. Yet, the more realistic read is, Ohio regulators are simply handing FirstEnergy $600 million in hopes the subsidy will allow the utility to improve its balance sheet. Then, FirstEnergy will (hopefully) propose grid-modernization efforts that the PUCO will consider and fund down the line. In other words, the PUCO is providing FirstEnergy a no-strings-attached subsidy. The decision is unusual and a bit difficult to interpret even the PUCO chairman admits the approach is undoubtedly unconventional.†The only certainty is that this issue will not die. Environmental Defense Fund and its allies will continue to press the PUCO and the Ohio Supreme Court to ensure the $600 million goes toward building a cleaner, more modern electric grid. FirstEnergy's bailout background A little history here is helpful. About two years ago, FirstEnergy requested a $4-billion bailout to keep operating its old, uneconomic, and dirty power plants. The PUCO agreed, but the Federal Energy Regulatory Commission (FERC) objected , saying the $4 billion was an illegal subsidy that would distort competitive electricity markets. In order to avoid FERC jurisdiction, FirstEnergy then revised its $4-billion-bailout request to remove the part related to the continued operation of any power plants. It also asked for another $4 billion to reduce its debt caused by its own bad business decisions as well as yet another $4 billion to justify keeping its corporate headquarters in Ohio. A few months ago, the PUCO staff recommended the utility receive only $600 million just 5 percent of the utility's $12-billion request in order to reduce its debt. That proposal was premised on the belief such funds would improve FirstEnergy's credit rating, allowing the utility to obtain capital and invest in grid modernization. However, the PUCO staff's recommendation didn't require any of the $600 million to be spent on grid modernization it was more along the lines of wishful thinking. Ohio Regulators Deliver ‘Undoubtedly Unconventional’ Decision in FirstEnergy Bailout Case CLICK TO TWEET An ambiguous order Yesterday, the PUCO commissioners essentially accepted the staff's recommendation. Yet some portions of its order suggest the $600 million must be spent to improve the utility's distribution system. The order declares that the approved funds should be conditioned upon the implementation of all grid modernization programs approved by the Commission.†It even states that the PUCO will annually review FirstEnergy's grid-modernization progress and adjust its receipts, including any over- or under-recoveries.†So, if FirstEnergy ends up spending less on grid modernization than it earned in new revenues, it would have to make up the difference through credits to customers, for example. Yet, hidden in the 192-page document are other lines saying the regulators will not place restrictions on the use†of the funds and that FirstEnergy may use the resources to indirectly support grid modernization investments.†The operative word, of course, is indirectly,†and the regulators suggest such investments†could include outstanding pension obligations, reducing debt, or taking other steps to reduce the long-term costs of accessing capital.†In other words, FirstEnergy could use the money solely to reduce its debt, without the need to show any connection to grid-modernization efforts. The PUCO also ruled that the $600 million in revenue would not be subject to an earnings test, which would require FirstEnergy to refund any revenues collected from customers that significantly exceed the utility's cost of providing service. By excluding these revenues from an earnings test, the PUCO made it more likely that the money will not be used for grid modernization. The PUCO decision is an important step in the FirstEnergy saga, but it is far from the end. What happens next? The PUCO decision is an important step in the FirstEnergy saga, but it is far from the end. Parties, including EDF, will ask the Ohio Supreme Court to consider whether the PUCO's undoubtedly unconventional†approach is legal. The PUCO itself will need to clarify what grid-modernization initiatives it supports. Most likely, FirstEnergy which received a measly 5 percent of its plea will appeal to Ohio legislators for a larger bailout as well as protection from competition. How the FirstEnergy situation shakes out has national significance. As one former FERC commissioner noted , subsidizing uneconomic power plants or poorly-managed utilities is the major challenge facing the electricity industry at this critical juncture in its evolution. These out-of-market constructs†being debated in Ohio would distort price signals in the electricity market and lead to a really, really unsustainable future.†The outcome will signal whether electricity markets rely on competition or monopolies, on markets or subsidies. The PUCO is so close to a great decision. Rejecting the bailout and ordering grid modernization would be a victory for markets, investment in Ohio, efficiency, customers, and the environment. Here's hoping the PUCO itself or the Ohio Supreme Court provides such clarity and progress. By Dick Munson Originally Published on October 13, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/october/18/ohio-regulators-deliver-undoubtedly-unconventional-decision-in-firstenergy-bailout-case/ http://everythingshale.com/news/2016/october/18/ohio-regulators-deliver-undoubtedly-unconventional-decision-in-firstenergy-bailout-case/ Tue, 18 October 2016 09:00:26 http://everythingshale.com/news/2016/october/18/permian-pumped-at-record-rates/ The region spanning West Texas and New Mexico will produce more than 2 million barrels of oil a day next month for the first time in data going back to 2007, the Energy Information Administration said Monday. It's the only area where output is forecast to grow, as production across the nation's major oilfields is expected to drop 0.7 percent in November to 4.43 million barrels a day. The Permian Basin, the largest oil region in the U.S., has been the most profitable shale play during the drilling recovery because of its cheaper operating costs and abundant resource base. Explorers are paying higher prices for drilling rights in Permian fields. RSP Permian Inc. paid the equivalent of $45,000 per acre in the Delaware Basin, the highest level ever seen in that section of the Permian, when it agreed last week to buy Silver Hill Energy Partners, according to Canaccord Genuity Inc. Oil output in the Permian will increase 30,000 barrels a day to 2.01 million, while the Eagle Ford Shale in South Texas is expected to drop 35,000 barrels per day and the Bakken in North Dakota and Montana is forecast to drop 21,000 barrels per day. Slowing Decline Overall U.S. oil production may be continuing a downward trajectory, but “declines are slowing,” wrote Scott Hanold, an analyst at RBC Capital Markets, in a report Monday. He said oil output will begin gradually ramping back up in 2017 through 2018. Even as current production slips, drilling rigs are going back to work at a rate that's expected to grow, or at least remain stable, in November. As rigs become more efficient, they're drilling more wells in less time, which will bring production online faster. “Productivity per rig is something that should continue to grow across all major basins. It's a trend,” said Matt Marietta, an analyst at Stephens Inc. in Houston, Texas, by phone. “It'll be easy to have growth on a per-rig basis.” Comments comments http://everythingshale.com/news/2016/october/18/permian-pumped-at-record-rates/ http://everythingshale.com/news/2016/october/18/permian-pumped-at-record-rates/ Tue, 18 October 2016 08:23:52 http://everythingshale.com/news/2016/october/17/latest-studies-undercut-epa-find-oil-and-gas-development-not-increasing-global-methane-emissions/ Environmentalists have made no bones about what they blame for the trend of rising global methane emissions. The Environmental Defense Fund (EDF) has hyperbolically characterized the environmental impact of methane emissions from the oil and natural gas industry as “staggering,” while the U.S. Environmental Protection Agency’s (EPA) has pushed its costly new regulations as a solution that is absolutely necessary to “ combat climate change .” But as environmentalists and the EPA continue to focus all their attention on methane emissions from oil and natural gas systems, study after study has found this tired narrative is indeed a methane myth. Instead, recent studies find that microbial sources such as wetlands, agriculture, rice paddies and even man-made reservoirs are the reason a rise in global methane emissions in recent years. Let’s have a look at a few of them. Washington State University-Vancouver Study on Methane from Man-Made Reservoirs This study found that man-made reservoirs used primarily for hydroelectric power — long touted as a “clean” alternative to fossil fuel electrical generation — emit as much methane as world’s rice paddies, which have been estimated to be more than 700 million metric tons, or 10-12 percent of the world’s total anthropogenic emissions! As study co-authors John Harrison and Bridget Deemer told Climate Central in an email : “To put these reservoir methane emissions in context, they are similar in size to other major human sources such as biomass burning and rice paddies, hence reservoirs are not necessarily the ‘clean’ energy source they are often thought to be.” The researchers found man-made reservoirs are responsible for 1.3 percent of total global greenhouse gas emissions, with a vast majority of that total being methane. From the study : “Specifically, this work highlights the dominant contribution of CH 4 emissions to total reservoir carbon emissions… “Our synthesis confirms that CH 4 emissions are responsible for the majority of the radiative forcing from reservoir water surfaces (approximately 80% over the 100-year timescale and 90% over the arguably more policy-relevant 20-year timescale) and that modeling approaches that ignore ebullitive CH 4 flux may fail to accurately quantify the magnitude of fluxes.” The study also explains why man-made reservoirs are a major (albeit overlooked) GHG emission source: “Artificial reservoirs created by dams are distinct from natural systems in a number of key ways that may enhance GHG emissions from these systems. First, the flooding of large stocks of terrestrial organic matter may fuel microbial decomposition, converting the organic matter stored in above and below ground biomass to carbon dioxide (CO 2 ), methane (CH 4 ), and nitrous oxide (N 2 O). Second, reservoirs often experience greater fluctuations in water level than natural lakes. Drops in hydrostatic pressure during water level drawdowns can enhance CH 4 bubbling (e.g., ebullition) rates at least over the short term (Maeck et al. 2014 ). This enhanced ebullition may then decrease the fraction of CH 4 that is oxidized to CO 2 , a less potent GHG, by methane oxidizing microbes (Kiene 1991 ). Finally, the high catchment area–to–surface area ratios and close proximity to human activities (Thornton et al. 1990 ) characteristic of many reservoirs are likely to increase the delivery of organic matter and nutrients from land to water (relative to natural lakes), potentially fueling additional decomposition.” In fact, the study found that 79 percent of carbon dioxide equivalent emissions from reservoirs are methane , which is 25 percent higher than previously thought For perspective, based on this study and EPA methane emissions estimates, EID research indicates man-made reservoirs emit nearly three times more methane annually than U.S. oil and natural gas systems (244.2 mmt, according to the latest EPA GHG Inventory ). Interestingly, as EPA continues to push on with its methane regulations of the oil and gas industry, methane emissions from man-made reservoirs aren’t even taken into account by the agency, as the following EPA pie chart shows. Despite the fact that EPA does not categorize methane emissions from man-made reservoirs separately in its current inventories, scientists have known for some time that reservoirs are a major sources of emissions. A 2012 study actually indicated that methane emissions from reservoirs are right on par with those from global oil and natural gas systems. That study found all large reservoirs globally could emit up to 104 teragrams of methane annually. By comparison, NASA estimates that global methane emissions associated with burning fossil fuels totals between 80 and 120 teragrams annually. In this latest study, researchers analyzed more than 100 studies on 267 reservoirs worldwide. They found that reservoirs emit just shy of 1 billion metric tons CO2 eq. greenhouse gas emissions annually, which exceeds Canada ’s annual GHG emissions. And those totals are expected to increase, considering there are 847 large hydroelectric dam projects in the works. National Oceanic and Atmospheric Administration (NOAA) Study This study found that microbial sources such as rice paddies and wetlands are the cause of the global increase in methane emissions. Lead author Stefan Schwietzke of NOAA at the University of Colorado Boulder also emphasized that fossil fuel development is “not responsible for the increase in total methane emissions observed since 2007.” And despite what some headlines may have suggested, the researchers’ data show methane emissions from fossil fuel production are “not increasing over time” even though energy production has dramatically increased. From the study: “[T]his study does not confirm an upward trend of FF emissions in global CH4 inventories despite the large increase in natural gas, oil and coal production and use over the past three decades.” The researchers made their determinations by using isotopic analysis to show that natural or microbial sources, such as “wetlands, ruminants, rice, landfill/waste, termites” are the source of most of the methane released to the atmosphere each year. The study’s headline and some of the news outlet headlines highlighted the fact that the researchers found methane emissions from fossil fuel development were 20 to 60 percent higher than what previous estimates found. But the key phrase here is “fossil fuels” because the researchers evaluated the contribution of all fossil fuels and even natural seeps together,  without determining how much is coming from each source, to make these claims. From the report : “We find that total fossil fuel methane emissions (fossil fuel industry plus natural geological seepage) are not increasing over time, but are 60 to 110 per cent greater than current estimates owing to large revisions in isotope source signatures. We show that this is consistent with the observed global latitudinal methane gradient. After accounting for natural geological methane seepage, we find that methane emissions from natural gas, oil and coal production and their usage are 20 to 60 per cent greater than inventories.” (emphasis added) When they do actually single out natural gas emissions, the researchers are very clear that leakage rates are down significantly, crediting “industry improvements”: “[W]e also find that methane emissions from natural gas as a fraction of production have declined from approximately 8 per cent to approximately 2 per cent over the past three decades.” Department of Earth Sciences at Royal Holloway, University of London Study Similarly, this study found the spike in global methane emissions since 2007 has been “largely driven” by tropical wetlands and agriculture, as lead author Euan Nisbet explained , “Our results go against conventional thinking that the recent increase in atmospheric methane must be caused by increased emissions from natural gas, oil, and coal production. Our analysis of methane’s isotopic composition clearly points to increased emissions from microbial sources, such as wetlands or agriculture .” The study states plainly that its data found “both the majority of this methane increase and the isotopic shift are biogenic,” and the authors noted that both studies’ findings “ contradict emission inventories.” Using measurements made by NOAA’s Cooperative Global Air Sampling Network in three locations (the Canadian Artic, the south Atlantic and South Africa), a combination of latitudinal analysis and isotopic data led researchers to determine a majority of the methane increase since 2007 has a biogenic signature, meaning it cannot be attributed to thermogenic methane from oil and gas development. The study further notes that the tropical wetlands are responsible for as much as a quarter of global methane emissions , and that significant weather events — such as La Nina in 2007 and 2008 — could explain a nearly 50 percent hike in methane emissions when compared to the last half decade. NOAA and the National Institute of Water and Atmospheric Research in New Zealand (NIWAR) Study This study also found increased global methane emissions are coming from wetlands and agriculture. On the increase in agriculture, the study itself notes that India, China and South East Asia are likely emitting the highest amounts of methane: “India and China’s dominance in livestock-emissions and S.E. Asian rice cultivation are consistent with the location of the source increase.”  Climatewire further reported , “Greenhouse gas inventories from U.S. EPA show that emissions from fossil fuel extraction have increased in recent years. But this has apparently not registered on the global scale. This is possibly because the U.S. energy industry contributes little to the overall burden of global fossil fuel emissions , Schaefer said.” (emphasis added) Like the University of London study, the researchers used a fingerprinting technique that evaluates thermogenic methane associated with oil and natural gas development, as well as biogenic methane associated with natural or agricultural causes. The researchers found that thermogenic methane did not increase, even during the oil and natural gas boom. All This Considered, Why Are the EPA’s Methane Rules Necessary? The fact that these studies have found increases global methane emissions are not being driven by oil and natural gas production should really come as no surprise, considering methane emissions from oil and natural gas systems continue to decrease at the same time production skyrockets thanks to hydraulic fracturing. In fact, since 1990 , U.S. natural gas production has increased 70 percent, while the economy has grown 75 percent and methane emissions from natural gas systems have declined 15 percent. As the following Global Methane Initiative chart shows (based on 2010 data, the latest available), methane emissions from oil and natural gas development are an ever-declining piece of a very big anthropogenic methane emissions pie that has numerous slices.   Considering the aforementioned research estimates man-made reservoirs and wetlands could account for a combined 36 percent of total global methane emissions to go along with all these man-made sources, it is really no wonder EID research has found the EPA’s methane rule would account for a reduction of a mere 0.0047 degrees Celsius – or four one-thousandths of one degree – by the year 2100. In other words, the regulations would have virtually no impact on the climate. Which begs the question: if environmentalists’ goal truly is fighting climate change, why are they focusing all their attention on fracking? http://everythingshale.com/news/2016/october/17/latest-studies-undercut-epa-find-oil-and-gas-development-not-increasing-global-methane-emissions/ http://everythingshale.com/news/2016/october/17/latest-studies-undercut-epa-find-oil-and-gas-development-not-increasing-global-methane-emissions/ Mon, 17 October 2016 18:41:46 http://everythingshale.com/news/2016/october/17/hanjin-shipping-s-demise-no-surprise-to-platts-ocean-intelligence-chief/ IF ONLY… Hanjin’s demise hardly came as a crashing surprise to Platts Ocean Intelligence chief Jason Silber. Consider the following: “Hanjin…is undergoing a restructuring…results for FY 2013 and 1Q FY 2014 continue to be worrying – not surprising given that the container shipping sector is still suffering from severe supply-demand imbalance and high bunker costs (and is) expected to remain challenging in the near term, and we are not optimistic that the company’s current cost-cutting and other measures to improve its bottom line will return it to profitability in the next few years.” And this: “Hanjin’s strained financial position would affect its ability to pay its counterparties on time, as evident in the delays in payments…Ocean Intelligence recommends a credit limit of USD low-seven figures for the company. This account should be monitored closely, and any deterioration in its payment performance would warrant an immediate credit review.” Prophecy or intuition? No: merely an Ocean Intelligence report published two whole years before the momentous collapse of Hanjin, the world’s seventh (or eighth or tenth – depends who’s asked) largest container liner and South Korea’s flagship carrier. Our analyst recommended a relatively modest credit line of low $ seven figures. Now that may seem generous, but given mid-2014 bunker prices of around $700/mt (now $250), and the amount of fuel larger container carriers digest, it’s a very conservative recommendation. Take the Hanjin Green Earth, a 13,000 ton-container ship. Not the largest of liners, but still very big, the vessel boasts a 12,000-ton bunker fuel tank, plus another 400 tons for distillate fuel used when sailing in certain coastal zones. Filling up the bunker tank alone would cost $8.4 million in 2014, and $3 million in today’s low fuel price environment. A low $ seven figure credit line would suffice for fixing only one vessel a month. Speaking of prophesy, consider another pungent passage: “Let them not gloat…over me when my feet slip.” That’s from Psalms 38:16. Far be it from me to gloat, some of Hanjin’s largest bunker creditors could have saved themselves a small – no, actually a massive – fortune, eight figure fortunes in fact, by shelling out a few hundred bucks two years ago for that Ocean Intelligence report. Pity. Truth be told, more than a few observers were alarmed over the state of the container industry as early as 2012. Major liners were said to be failing to generate enough money to cover interest and capital requirements. Hanjin was seen as being at particular risk. Strictly by the numbers, Hanjin was never in the tip top tier of international players: the global liner fleet consists of roughly 5,000 active pure container vessels (plus another 1,000 ships of other types employed on regular liner schedules), of which Maersk operates over 10%, Mediterranean Shipping Co around 8%, CMA-CGM 7.5% and COSCO 4.5%. With about 100 ships a few weeks ago, Hanjin had less than 2% of the liner fleet, a percentage now shrinking fast. Yet Hanjin’s small size relative to its rivals belied its influence: it represented a sizeable 7% of all Far East- North American container trade. And like the proverbial ripples of a pebble cast in a pond (or ocean in this case), the Hanjin bankruptcy has created prodigious losses down the supply chain for manufacturers, exporters and importers, freight forwarders, ports, consumers and most importantly (naturally), for its bunker suppliers. If only they had that Ocean Intelligence report in hand. The post Hanjin Shipping’s demise no surprise to Platts Ocean Intelligence chief appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/17/hanjin-shipping-s-demise-no-surprise-to-platts-ocean-intelligence-chief/ http://everythingshale.com/news/2016/october/17/hanjin-shipping-s-demise-no-surprise-to-platts-ocean-intelligence-chief/ Mon, 17 October 2016 18:00:59 http://everythingshale.com/news/2016/october/17/despite-huge-fundraising-flop-celdf-still-pushing-for-more-lawsuits-in-ohio/ The Community Environmental Legal Defense Fund (CELDF) has had a really tough year in Ohio, losing almost every attempt they have made at anti-fracking ballot measures. Despite this fact, the Community Environmental Legal Defense Fund (CELDF) continues to abuse Ohio taxpayers with frivolous lawsuits in an attempt to try to manipulate Ohio laws and place unenforceable measures on local ballots. But if their last fundraiser is any indication, their efforts aren’t exactly popular with Ohioans. Take a look at the recent $28 per plate CELDF fundraiser in Athens, Ohio, which only had two attendees and three people interested, according to Athens anti-fracking Facebook page . It’s not difficult to see why considering that the group’s Ohio organizer Tish O’Dell was caught saying , “If we know the law is wrong, why are we obedient?”  In other words, if you do not agree with a law—any law—the recourse is simply to disobey that law. While they would like folks to believe their “local” efforts are pure, in reality CELDF and its lawyers are nothing more than a marketing machine focused on lining their own pockets. Since they got involved in local control issue, CELDF’s coffers have swelled to over $1.4 million in assets . However, CELDF’s most recent 2014 tax filings showed that their failed efforts are starting to hurt their checkbook as they lost $113,965 in contributions from the previous year. One thing that we have learned as these 29 ballot measures have played out in Ohio is that CELDF continues to “tweak” its strategies in the hope that they can manipulate Ohio election laws and procedures. They are at it again, according to the Ohio University student paper , Dick McGinn, chairman of the charter, followed O’Dell’s speech with a call to action for where the group could go next with its legal battles. To conclude the night, he encouraged the group to start a third new charter, fixing the points it was denied upon previously. It has become abundantly clear that the only goal of these groups pushing “local control” measures is to cash in on Ohio taxpayers by any means possible, and with such outlandish ideologies like, “ If we know the law is wrong, why are we obedient ?” It’s no wonder they can’t hold a successful fundraiser in Ohio. Still, this election season continues to prove that CELDF and the lawyers they work with are only in it for themselves. http://everythingshale.com/news/2016/october/17/despite-huge-fundraising-flop-celdf-still-pushing-for-more-lawsuits-in-ohio/ http://everythingshale.com/news/2016/october/17/despite-huge-fundraising-flop-celdf-still-pushing-for-more-lawsuits-in-ohio/ Mon, 17 October 2016 16:08:04 http://everythingshale.com/news/2016/october/17/new-duke-study-finds-low-risk-of-flowback-contaminating-water/ Duke University researchers recently  published a new study , which finds the volume and quality of water that returns to the surface during oil and natural gas development (which the study refers to as “FP water”) is almost entirely composed of naturally occurring formation brine (about 92 to 96 percent), with between four and eight percent of wastewater consisting of fracking fluid used in development. Even then, the study finds, fracking fluid is only found within the first few months of development. Because much of the FP water is formation brine, the authors mention it can be safely processed and reused depending on its salinity and chemical composition. FP water that is unable to be recycled is therefore re-injected back into the formation, a practice used for decades and described by the U.S. Environmental Protection Agency as a “ safe and inexpensive option ” for the disposal of hazardous byproducts. In short, this is yet another study that confirms oil and gas development is safe. In fact, one of the lead researchers – Avner Vengosh, who has produced a number of anti-fracking studies over the years – had to admit that the risk of contamination from this process is very “low.” From the press release : “ This means that the probability of having environmental impacts from man-made chemicals in fracking fluids is low , unless a direct spill of the chemicals occurs before the actual fracking.” (emphasis added) Vengosh explains why this is the case noting , “‘Much of the public fear about fracking has centered on the chemical-laden fracking fluids – which are injected into wells at the start of production – and the potential harm they could cause if they spill or are disposed of improperly into the environment […] Our new analysis, however, shows that these fluids only account for between 4 and 8 percent of wastewater being generated over the productive lifetime of fracked wells in the major U.S. unconventional basins…Most of the fracking fluids injected into these wells do not return to the surface; they are retained in the shale deep underground.” Not only does the study find the process is safe, it also highlights the benefits of water recycling. The study found that since different formations produce FP with different constituents and salinity levels, water produced in some areas need little processing before it can be used. This is true for much of the water produced in Western formations, as the study states: “Based on these variations, we estimate that the western basins (Niobrara, California, Eagle Ford) with relatively low salinity in the formation brines have more potential for reuse for hydraulic fracturing and/or beneficial uses.” (p. 320) The beneficial uses mentioned by researchers include reuse for development, thus cutting down on the already relatively small amount of water used for hydraulic fracturing , as well as irrigation for crops. Both of these are especially important in areas with water scarcity, such as California, where programs that use recycled produced water to irrigate farmland have been proven to be safe . As one researcher mentioned in the study’s press release : “But with proper treatment, they [FP water] potentially could have beneficial uses…especially out West, where our study shows most brines being produced by fracked wells are much less saline than those in the East. These Western brines, which are similar to sea water, could possibly be treated and re-used for agricultural irrigation or other useful purposes, especially in areas where freshwater is scarce and drought is persistent.” Despite these findings however, some opposed to oil and gas development may latch on to the section of the report that states, “The management and disposal of flowback is one of the greatest challenges associated with unconventional oil and gas development.” (p. 314) But, if the study clearly states that the management of FP water is safe and the risks are “low,” and that’s “one of the greatest challenges” associated with fracking, that’s a pretty darned good track record. Overall, this study reaffirms that not only do the additives used in hydraulic fracturing not pose a significant environmental risk, but also that much of the water produced during development is in fact naturally occurring formation water that can be safely redisposed back into the formation. Moreover, the authors find that some of this produced water can be recycled for use in more development or irrigation, helping those regions impacted by water scarcity. http://everythingshale.com/news/2016/october/17/new-duke-study-finds-low-risk-of-flowback-contaminating-water/ http://everythingshale.com/news/2016/october/17/new-duke-study-finds-low-risk-of-flowback-contaminating-water/ Mon, 17 October 2016 15:45:03 http://everythingshale.com/news/2016/october/17/will-bernie-sanders-face-fracking-questions-at-colorado-rally/ Vermont Senator and former presidential candidate Bernie Sanders returned to Colorado this week to rally voters in support of Hillary Clinton. Next, he’ll appear at an event scheduled for later today in support of a statewide ballot initiative “that would create a universal state-administered and financed health care system for Colorado residents.” But the big question now is: will he face questions on fracking? Sanders’ return to the state comes amid the release of leaked emails , which reveal that Hillary Clinton’s campaign called his ban-fracking platform during the primary “extreme,” “unfeasible” and “irresponsible.” From the  emails : “What does that mean? A complete 100% fracking ban. There is no elected dem and I believe no enviro group that takes this position. In fact, such an extreme position threatens the progress of common-sense safety measures like frack fluid disclosure and methane capture/air quality regulations.” “The Denver Post Editorial Board could really smack him for this. This is tricky waters for caucus goers but his language may leave him vulnerable.” Those points were reiterated in what is apparently  a draft statement  highlighting the economic and climate benefits of fracking: “Bernie’s call for banning all hydraulic fracturing is, extreme, unfeasible and ignores the contribution natural gas has made to our economy and our efforts to reduce carbon pollution.” Transcripts of a meeting with labor leaders contained within the leaked emails show that Hillary Clinton campaign sides with labor unions over the extreme anti fossil-fuel agenda pushed by Keep It In The Ground (KIITG), even suggesting those in the movement should “get a life.” In 2015, she  told  a group of unions: “I’m already at odds with the most organized and wildest… They are after everything and I’m just talking through them. They come to my rallies and they yell at me and, you know, all the rest of it. They say, ‘Will you promise never to take any fossil fuels out of the earth ever again?’ No. I won’t promise that. Get a life, you know .’” Clinton went on to say that she wants to defend natural gas: “Bernie Sanders is getting lots of support from the most radical environmentalists because he’s out there every day bashing the Keystone pipeline. And, you know, I’m not into it for that. My view is, I want to defend natural gas. … I want to defend fracking under the right circumstances.” With leaders of the Democratic Party quickly working to distance themselves from extreme anti-fossil fuel activism both here in Colorado and nationally , activists will likely want answers from Sanders as to whether he is joining those who understand the economic and climate benefits of fracking, or whether he will stick with them. But one thing is clear: the KIITG, ban-fracking agenda is too extreme for Colorado. http://everythingshale.com/news/2016/october/17/will-bernie-sanders-face-fracking-questions-at-colorado-rally/ http://everythingshale.com/news/2016/october/17/will-bernie-sanders-face-fracking-questions-at-colorado-rally/ Mon, 17 October 2016 14:04:23 http://everythingshale.com/news/2016/october/17/luminant-cutting-132-texas-jobs-with-mine-closure/ As coal power plants continue to struggle financially with natural gas and renewable power gaining market share, many Texas coal plants are only operating during select summer and winter months when demand is strongest. As such, Luminant is closing one of the four lignite coal mines that feeds its Martin Lake power plant. Because of a collective bargaining agreement, some of the job cuts are coming from the other mines that will remain in production as Luminant consolidates operations. “This has been a very difficult decision, but one that is required to continue to run the business efficiently,” wrote Tim Bosecker, Martin Lake mines director, in a letter to the Texas Workforce Commission released Monday. The announcement comes just a month after the Westmoreland Coal Co. said it will cut about 250 Texas jobs when it closes its Jewett Mine after NRG Energy opted to switch to cleaner-burning coal from Wyoming. The moves comes as the power sector in Texas and across the country increasingly switches to cleaner fuels. NRG is switching to low-sulfur coal with less carbon emissions than Texas lignite, commonly called brown coal. Early this year, Luminant closed three small North Texas mines - its Winfield, Monticello and Thermo mines - in order to also make the switch from lignite  to Wyoming’s Powder River Basin coal. Luminant, which owns the most coal-fired power generation in Texas, is increasingly looking to shift toward other power generation sources. Luminant bought two major gas-fired power plants early this year in northeastern Texas. Luminant has struggled financially in recent years, and its parent company, Dallas-based Energy Future Holdings, filed for bankruptcy protection in early 2014 with more than $40 billion in debt. However, Luminant and its retail electricity sibling, TXU Energy, emerged from bankruptcy in early October under the newly created parent company, TCEH Corp. Comments comments http://everythingshale.com/news/2016/october/17/luminant-cutting-132-texas-jobs-with-mine-closure/ http://everythingshale.com/news/2016/october/17/luminant-cutting-132-texas-jobs-with-mine-closure/ Mon, 17 October 2016 13:39:17 http://everythingshale.com/news/2016/october/17/on-exxonknew-when-is-enough-enough/ A federal district judge’s order last week (which requires Massachusetts district Attorney General Maura Healey to provide additional information to determine if she initiated a “bad faith” investigation into ExxonMobil) raises the important question: when is enough, enough? At this stage it’s pretty clear that the Democratic AGs’ #ExxonKnew campaign is dead. It’s just a matter of time before they find a way to bow out as quietly as possible. But it might not be that easy to make an inconspicuous exit, as it looks like they’re going to end up in full damage control mode. There’s no question this order will dive even further into the inner workings of the #ExxonKnew campaign, exposing materials that would never see the light of day otherwise, including additional documents, depositions and inquiries. As Wall Street Journal columnist Holman Jenkins Jr. put it in a recent interview , this could be “very embarrassing” for Healey – and as for Schneiderman “He’s lucky just to come away from this with egg on his face.” Here’s the video and full text of the interview: Holman (:27): Yeah, this is a federal judge in Texas basically he gave Exxon the right to demand the notes and phone records and emails of Maura Healy, the Massachusetts Attorney General who is one of the attorney generals leading this crusade against Exxon for supposedly concealing its knowledge of climate science.  So basically the judge said there is good evidence in advance of a further investigation that the Massachusetts AG entered this case with bias against Exxon, was already talking about Exxon’s guilt before the investigation began. That she did it for political reasons. The AG’s had gotten together with Al Gore and a bunch of environmental groups and said that they were launching this litigation in order to advance the cause of climate change policy, not having to do with the justice, which is the job of AG’s. So he said, basically Exxon can go look for evidence that this was a bad faith prosecution from the get-go. Kissel (1:20): Now, could Attorney General Healy be in legal trouble here, Holman, for bringing this case then in the first place? What’s the next step here? Holman (1:28): Yeah, well they’re going to litigate this for a while but she, unlike Eric Schneiderman the New York Attorney General who has the Martin Act powers – he can issue subpoenas on his own – she had to go to a Massachusetts superior court to get her Exxon subpoena approved. So now, the Massachusetts court stands in danger of finding that its subpoena was improper by the federal court. So that would be very embarrassing for her and potentially would have legal consequences down the road if this litigation continues. I imagine at some point, if Exxon is winning it’ll just let her off the hook in order to get this whole case dropped. But it makes her look pretty bad . Kissel (2:04): Well you mentioned Eric Schneiderman from New York, you also had the California Attorney General Kamala Harris, who’s now running for Senate involved in this press release, this very public campaign against Exxon. Have Schneiderman and Harris essentially let this drop and could they be worried too about the negative press, the negative political ramifications for them? Holman (2:29): I don’t think so. Harris in California paid lip service to this campaign but never did anything about it so she’s kind of off the hook and she’s running for Senate now. Eric Schneiderman is somewhat embarrassed and in retreat has basically abandoned his argument. Plus he’s been embarrassed by release of an email showing that he tried to flog this Exxon case when he was out fundraising for his hoped-for governor’s bid in a couple of years. That looks like it’s not gonna come off. He’s lucky just to come away from this with egg on his face. I think it’s the Massachusetts AG right now who is in deeper trouble because of the dueling role of these two courts in Massachusetts and Texas looking at the validity of her original subpoena. The Democratic AGs have spent the past several months trying to skirt transparency laws and avoid Congressional subpoenas . Yet documents uncovered by E&E Legal Foundation as well as reporting on secret meetings behind closed doors by the Wall Street Journal show just how political of a campaign the Democratic AGs have run. This has led just about every editorial board in the country to question the #Exxonknew campaign and call for the AGs to end their political crusade. Making matters worse for the AGs, we know that they signed on to a Common Interest Agreement to keep their correspondence on the #ExxonKnew investigations secret, only because it was mentioned in previous batches of FIOA’d emails, but E&E Legal actually had to file suit to get a copy of the agreement.  Rhode Island ‘s Office of Attorney General wouldn’t provide the actual agreement because it was contained in an attachment, which, they claimed, wasn’t part of the email chain.  The Iowa AG ’s office claimed they didn’t have to turn over documents on the grounds that they had signed a Common Interest Agreement, even though they had not actually been party to it. The AGs’ offices have also worked pretty hard to keep their behind-the-scenes collusion with environmental activists out of the press. After FIOA’d emails revealed that Peter Frumhoff of the Union of Concerned Scientists and activist lawyer Matt Pawa had secretly briefed the attorneys general ahead of their March 29 press conference with Al Gore, Schneiderman’s office told those activists effectively to stonewall the press. On March 30, Pawa sent an  email to Lem Srolovic with the New York Attorney General’s office , as well as Scot Kline in the Vermont Attorney General’s office, explaining that “a WSJ reporter wants to talk to me. I may not even talk to her at all but if I do I obviously will have no comment on anything discussed at the meeting.” Pawa then asked, “What should I say if she asks if I attended? No comment? Let me know.” Srolovic responded that Pawa should effectively stonewall the WSJ reporter. “My ask is if you speak to the reporter,” Srolovic wrote, “to not confirm that you attended or otherwise discuss the event.” No wonder the Democratic AG’s were quick to welcome the news that the Securities Exchange Commission (SEC) is taking over the investigation about how the company assesses the value of its proven reserves. The entire #ExxonKnew coalition has been falling apart since the Al Gore press conference back in March. Now how will Healey and Schneiderman manage to get themselves out of this mess? We’ll find out soon enough. http://everythingshale.com/news/2016/october/17/on-exxonknew-when-is-enough-enough/ http://everythingshale.com/news/2016/october/17/on-exxonknew-when-is-enough-enough/ Mon, 17 October 2016 09:34:00 http://everythingshale.com/news/2016/october/17/ge-buys-lm-wind-power-for-16b-for-bigger-cheaper-wind-turbines/ As wind power expands globally, GE makes a strategic blade acquisition to stay at the top of the game. General Electric is buying one of the world's largest wind turbine blade manufacturers, LM Wind Power, for $1.65 billion. The acquisition will allow GE to bring wind turbine blade design in-house to drive down cost faster than it would have with LM Wind as an independent supplier, according to Jérôme Pécresse, president and CEO of GE Renewable Energy. GE is buying LM Wind from London-based private equity firm Doughty Hanson for 8.3 times EBITA. LM Wind will operate as a standalone subsidiary. The Danish blade company currently has blade factories in 13 countries including Brazil, Canada, China, Denmark, India, Poland, Spain and the U.S. LM Wind has long been a supplier to GE, but there is increasing global competition for onshore and offshore wind, both of which are growing markets, and driving down cost and pushing for further innovation in design is paramount. GE has positioned its renewable energy division as a $9 billion startup†as it tries to innovate at the speed of a startup, but with the balance sheet of an established global powerhouse. Although onshore wind is cost-competitive with fossil fuels and even with hydropower in some parts of the world, a recent study from Lawrence Berkeley National Laboratory found wind power could see another 25 percent cost decline by 2030. Experts expect cost advantages in wind to come through lower capital costs, but also through higher capacity factors, longer project life and operational efficiencies. That will mean better analytics and bigger turbines. Pécresse noted that blades are the single largest cost component of the total turbine, and it is the blade that drives much of the overall performance of the turbine, so it makes sense to tightly integrate the blade design with the rest of the turbine. That involves everything from how to manufacture and ship the blades that are getting bigger and bigger, to better placement of sensors to enhance the analytics that can further a turbine's performance. It's all part of the value chain,†he added. Another advantage is that both companies have global footprints that can be leveraged to grow the business in a more holistic way. With our combined global footprint, we can build flexible solutions for customers around the world,†said Pécresse. GE, for instance, would like to maintain a strong presence in China, where LM Wind Power already supplies various turbine manufacturers and has an office and three factories. Bloomberg New Energy Finance reported that GE lost wind market share to Goldwind and Vestas in 2015. The acquisition is expected to close in the first half of 2017. By Katherine Tweed  Originally published on Greentech Media  –  October 11, 2016 http://everythingshale.com/news/2016/october/17/ge-buys-lm-wind-power-for-16b-for-bigger-cheaper-wind-turbines/ http://everythingshale.com/news/2016/october/17/ge-buys-lm-wind-power-for-16b-for-bigger-cheaper-wind-turbines/ Mon, 17 October 2016 09:00:01 http://everythingshale.com/news/2016/october/17/recent-surprises-turn-oil-and-gas-market-bullish/ Addressing recent events transforming the U.S. oil and gas market Inventory Decreasing Unexpected surprises continue for the U.S. gasoline market in 2016, this time with gasoline prices underpinned as an inventory surplus was sharply cut. The East Coast has been affected in particular, with gasoline supply plummeting from a 36-year high to a 21-month low. With record high gasoline production holding supply well above the historical average in 2016, what has finally shifted the market from bearish to bullish? OPEC Production Cuts With an ongoing imbalance threatening to press global oil prices lower still, OPEC decided on Sept. 28 to cut production. Admitting that the imbalance of global oil supply-demand would indeed continue well into 2017, the 14-country member finally agreed to reduce production – the first cut in eight years. Beginning this November, OPEC ministers have agreed to a production range between 32.5 and 33.0 million bpd in contrast to their August output of roughly 33.3 million bpd. Details to these cuts will come about when OPEC meets in Vienna on Nov. 30. Colonial Pipeline Leak On Sept. 9, a leak was found on the Colonial Pipeline’s 36-inch gasoline main line 1 in Alabama that disrupted service. Not returning to full service until Sept. 21, the Southeast north through the mid-Atlantic saw limited new gasoline supply which led to steep drawdowns in regional stocks. This caused supply shortages, namely in the Southeast.. Natural Disasters The first hurricane in 11 years to make landfall in Florida, hurricane Hermine disrupted shipping lanes and sea-to-shore off-loading after it hit on Sept. 2. This natural disaster drew dawn East Coast gasoline supply 2.284 million bbl to 64.894 million bbl during the week ending Sept. 2 and another 884,00 bbl by Sept. 9. Both the pipeline and hurricane disruptions occurred in the midst of transition when refiners were moving out summer grade product to make room for winter grades – leading to a drop of nearly 6.0 million bbl in PADD 1C, the Lower Atlantic, according to the EIA. This drop in the region’s supply was the largest on record and well above the previous large drawdown in June of 2003 of 2.9 million bbl. National Gasoline Outlook – Supply Demand Leveling In light of a second hurricane in the past two months, this time Matthew – category 4, shipping lanes and pipeline service had again been disrupted. With East Coast supply taking another hit, gasoline prices have increased as decreasing supply combats the imbalance seen over the past year. This decrease in supply and climb in price has been another bullish factor underpinning higher fuel prices. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market , click here . The post Recent Surprises Turn Oil and Gas Market Bullish appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/17/recent-surprises-turn-oil-and-gas-market-bullish/ http://everythingshale.com/news/2016/october/17/recent-surprises-turn-oil-and-gas-market-bullish/ Mon, 17 October 2016 07:07:14 http://everythingshale.com/news/2016/october/17/trade-debate-simmers-at-global-steel-meeting/ Understatements can be jarring in a place like Dubai, where little is left to the imagination when it comes to wealth and statements of status are a way of life. Maybe that’s why one statement in particular stood out last week during the World Steel Association’s annual meeting in the United Arab Emirates’ most populous city. When commenting on the flurry of steel trade cases filed around the globe this year, worldsteel Director General Edwin Basson referred to it simply as “a period of trade tension at the moment.” No one could blame the head of an organization that represents the world’s largest steelmakers for wanting to keep the peace, downplaying the fact that government agencies from America to Asia have been working overtime to keep up with the steady flow of recent steel-related trade complaints. But top executives of worldsteel member companies in attendance assessed the situation more bluntly, peppering their statements with words like “cheating” and “protectionism” and “building walls.” Arguably, no country has seen as much recent activity on the trade case front as the US. And the plaintiffs are unapologetic regarding their success. “Have we seen benefits from it? Certainly,” Nucor CEO John Ferriola told S&P Global Platts during the meeting. “The flat-rolled sheet cases – hot-band, cold-rolled and galvanized – have been successful, and we’ve seen a reduction in the import of subsidized products in those areas. And we’re pursuing trade cases now on plate, rebar is coming up again – we hope to have the same kind of results there.” Ferriola said “the fact that so many cases are being filed and that they’re being so successfully prosecuted is testimony to just how blatant the cheating has become.” “It’s about time we’re taking action,” he said. “We have laws in place. When people break them, they need to be held accountable for breaking the law.” Ferriola, the new chairman of worldsteel, is quick to point out that he’s not against free trade – quite the contrary. But trade also needs to be fair for it work for everyone, he said. T.V. Narendran, managing director of Tata Steel Ltd. and head of worldsteel’s economic committee, said duties have been stepped up in India recently to protect investments made by the country’s steel companies. Narendran said “18 months ago there were barely any import duties. Last 18 months has been quite different, and hence, there have been some reactions.” Those reactions are a consequence India’s industry is willing to deal with, though. “Industry that has invested, you don’t want to see them suffer because of unfair trade,” Narendran said. China is the favorite boogeyman for many on the trade front. And while there were a number of delegates representing Chinese steel interests in Dubai, they remained mostly out of the discussion during the worldsteel meeting. China Iron & Steel Association Secretary General Liu Zhen Jiang, when addressing the topic of overcapacity, did say he believed China had made “great efforts in that regard” and that “some sides have spoken a lot, but done little.” He added: “It’s a pity for us to see so much talk from some about reducing overcapacity when they have done nothing.” Voestalpine AG CEO Wolfgang Eder said a proposed free trade agreement between Europe and the US would be a positive move. “We can’t talk about a globalized world and neglect that free trade is the only way forward for a peaceful, joyful future,” Eder said. “We can’t go back to protectionism and building up borders.” His sentiments were echoed by Emirates Steel CEO Saeed Ghumran Al Remeithi, who said the UAE – like its steel industry – has thrived in recent years due to its openness, not by closing itself off from the world. The UAE’s population of more than 9.2 million is comprised of people from more than 200 countries, he said, and it welcomes immigrants and foreign investment “unlike certain countries that are building walls to keep people out.” It’s probably an understatement to say building bridges to trade, not barriers, is essential at a time when global economies have become more entwined than ever. As the current dialogue becomes more exaggerated, though, that’s seemingly being lost in the shuffle. The post Trade debate simmers at global steel meeting appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/17/trade-debate-simmers-at-global-steel-meeting/ http://everythingshale.com/news/2016/october/17/trade-debate-simmers-at-global-steel-meeting/ Mon, 17 October 2016 07:00:27 http://everythingshale.com/news/2016/october/17/bp-a-company-with-a-split-personality-looks-to-the-future-fuel-for-thought/ It is six years since a prominent newspaper dubbed BP’s chief executive the “most hated and clueless man in America” and in that time the company has paid $62 billion in fines and compensation for its role in the Macondo Gulf of Mexico oil spill. Perhaps surprisingly, much of the top leadership that visited the White House in 2010 to brief President Barack Obama remains in charge of the company. Among them are Bob Dudley, the then-director for Asia and the Americas and now CEO, together with Lamar McKay, head of BP America at the time and now Dudley’s deputy. More striking is the extent to which BP is catching up with its competitors, but questions remain about the company’s future direction. When Dudley took up the chief executive’s role in 2010 some saw him as a short-term crisis manager, called in to appease angry US authorities. Six years on, whether and how BP sustains its dual role, as a globe-trotting buccaneer, searching out resources, and as a responsible manager of legacy assets, remains one of the industry’s more intriguing questions. BP has something of a split personality. On the one hand there is a focus on doing what it does best—drill, mainly for oil, in stable, preferably free-market locations such as the US and North Sea—and a resistance to “non-core” activities such as renewables. Its investment in gas has been more limited than its competitors’, especially Shell. Dudley, visiting Istanbul last week, reiterated plans to increase the share of gas in BP’s production, but as with other majors, that share has actually fallen during the price crash. Oil accounted for 55% of BP’s upstream production last year, compared with 52% a year earlier. Maintaining a tight focus has served BP well since the Macondo debacle and the nine-month suspension of dividend payments that followed. The company won praise for the speed with which it sold off swaths of non-core businesses. Despite slashing its asset base, BP’s US oil production is now a third higher than Shell’s, at over 400,000 b/d, and far outstrips Total’s. Its global oil and gas production, at 2.1 million b/d of oil equivalent, is also not too shabby. Its debt gearing—25% at the end of June— is nothing to boast of, but similar to Total’s and lower than Shell’s. BP’s troubles in the Gulf of Mexico also encouraged a retrenchment and efficiency drive in its UK heartland in the North Sea, which has paid off in higher production. It has used financial innovation to limit some of the risk of offshore operations—an example is its recent decision to spin off its Norwegian assets into a joint venture with Det Norske. The need to focus was a message Dudley drove home in Istanbul, saying that “for all oil companies right now in general we’re all short of capital. We have to use it extremely carefully.” An appetite for risk part of BP’s heritage But there is another side to BP’s personality, one that is more buccaneering and relies on personal relationships with senior politicians, evident in its immersion in the politics of the Middle East and former Soviet Union. It is an approach, exemplified in the figure of one-time chief executive John Browne, that is led more by geopolitics and contrasts with the business school ethos that helped form Dudley and McKay. It has made BP synonymous with the oil industry of one country, Azerbaijan, and has meant maximum engagement with Russia, oil giant Rosneft and its chief executive Igor Sechin, unlike ExxonMobil and Shell’s more discreet presence in the Russian far east at Sakhalin. However there have also been missed opportunities and failures in such politically riskier climes. One has been BP’s failure to renew its ADCO concession in the UAE. Total, by comparison, gained over 150,000 b/d of production when it signed a new ADCO contract last year. And the contortions BP went through to extricate itself from joint venture TNK-BP, just after Macondo, were for a time an embarrassment. In Iraq, some have been surprised at BP’s success in developing the Rumaila field, but again the risks still associated with Iraq, spanning politics, corruption, violence and pollution, are obvious. Whether the company will be willing to take on those kind of relationship risks in the future is unclear. Recent plans by BP to help transfer the shale revolution to Argentina, reminiscent perhaps of a similar failed effort by Shell in China, could prove a niche opportunity, or a dangerous distraction. The post BP, a company with a split personality, looks to the future: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/17/bp-a-company-with-a-split-personality-looks-to-the-future-fuel-for-thought/ http://everythingshale.com/news/2016/october/17/bp-a-company-with-a-split-personality-looks-to-the-future-fuel-for-thought/ Mon, 17 October 2016 01:15:59 http://everythingshale.com/news/2016/october/14/new-activist-report-rehashes-discredited-fracking-studies-to-target-school-children/ A new Environment America “ report ” uses a couple old anti-fracking tactics — exploitation of children and blatant misinformation from activist studies — to try to stoke fears and rally support for its extremist call to ban fracking nationwide . The ominously-titled “Dangerous and Close: Fracking Puts the Nation’s Most Vulnerable People at Risk” finds there are nearly 2,000 child care facilities, better than 1,300 schools, nearly 250 nursing care providers and more than 100 hospitals within a one-mile radius of fracked wells in the nine states examined, stating: “Given the scale and severity of fracking’s impacts, fracking should be prohibited wherever possible and existing wells should be shut down beginning with those near institutions that serve our most vulnerable populations.” But EA offers up absolutely no new original research to prove its claim that the “closer you are to fracking, the more susceptible you are to suffering negative health effects.” Instead relies on a virtual “greatest hits” of debunked studies and talking points to try to support its topline finding. Here are the report’s most egregious claims, followed by the facts. Environment America Claim : “Fracking creates a range of threats to our health, including creating toxic air pollution that can reduce lung function even among healthy people, trigger asthma attacks, and has been linked to premature death. Children and the elderly are especially vulnerable to fracking’s health risks.” REALITY: There is actually ample evidence that fracking is improving overall air quality and health by reducing major pollutants such as fine particulate matter, sulfur dioxide and nitrogen dioxide. Furthermore, all three studies EA singles out as “evidence” close proximity to fracking sites can lead to the myriad of adverse health effects have been thoroughly debunked. EA claims one study (McKenzie et al., 2012) shows “residents living within one-half mile of natural gas wells” in Garfield County, Colo., were “exposed to air pollutants that increased their risk of illness.” This study just so happens to be the most infamous of a slew of debunked anti-fracking papers by Lisa McKenzie of the Colorado School of Public Health (CSPH). Not only has EID debunked this study — pointing out it exaggerated emissions from well development by at least 10 times, failed to take into account exhaust fumes from a major interstate highway less than a mile away, and failed to note the cancer risk detected was not above the national average, just to name a few major flaws — the Colorado Oil and Gas Association and Garfield County’s environmental health chief Jim Rada have also disavowed the paper. Even McKenzie herself has conceded the study’s flaws. EA also singles out the recent Johns A. Hopkins asthma study, claiming it found “Pennsylvanians with asthma who live near fracked oil and gas wells had more asthma flare-ups that required medical care than did patients who lived farther away.” But EID has pointed out that the study failed to establish any actual proof linking asthma exacerbations to fracking. Also, state health data actually showed asthma-related hospitalizations were actually lower in shale counties than in counties with no oil and gas development. The final study (Rabinowitz et al.) singled out be EA claims Washington County, Pa., residents “relying on well water found increased rates of adverse health symptoms — including skin conditions and upper respiratory ailments — reported by those living within 1 kilometer (0.6 miles) of a gas well site, compared with those living more than 2 kilometers (1.2 miles) away.” But an EID review of the research found that this report is the result of data collected by an activist group who paid individuals to give complete surveys on health symptoms. The study also found no hard evidence proving its claims and relies on a number of anti-fracking studies that have been thoroughly debunked, or have been found to have major flaws in their methodologies (gee, that sounds familiar). There had also been no reports of air or water impacts in Washington County at the time of that study. Considering these are the only three health studies EA chose to focus on, one would have to surmise it feels they present the most convincing evidence to support its claim that proximity to fracking leads to health problems. But fact is, each study has been thoroughly discredited. Environment America Claim : “Pollution levels near wells are often high.” REALITY : Again, each of the studies Environment America uses an example to support this claim have been thoroughly debunked, while numerous studies showing low emissions at well sites are ignored by EA. The first study used by EA to support its claim found elevated levels of benzene and “other toxic or cancer causing compounds” at playgrounds near fracked wells in North Texas. First of all, the study was conducted by ShaleTest, which is “ proudly affiliated ” with the anti-fracking group Earthworks. It was also headed up by Calvin Tillman, a former mayor of DISH, Tex., and one of the stars of Josh Fox’s Gasland films. Not surprisingly, EA fails to point out that the highest benzene measurements detected in this study would have to be five times higher to cross the threshold of health concerns. Curiously, the ShaleTest report omits entirely what the short-term threshold actually is. Another study cited by EA (Warneke et al.) claimed to find “elevated levels of volatile organic compounds (VOCs) in Utah’s Unitah Basin. But a more recent study actually finds VOCs in Unitah Basin are not only lower than previously thought, but that they are half what was estimated, severely weakening any argument activists groups can make about energy development dragging down the region’s air quality. Similarly, EA claims another study — authored by another Gasland Star, Theo Colborn — found “Weekly tests of air quality 0.7 miles from a well pad in Colorado’s Front Range detected VOCs throughout the year-long study, which spanned multiple stages of well drilling and production.” But a recent Colorado State University study found low emissions along Colorado’s Front Range that are far below safe thresholds. EA even cites an Earthworks study that claims “A series of 2012 measurements by officials of the Texas Commission on Environmental Quality (TCEQ) found VOCs levels so high at one fracking location that the officials themselves were forced to stop taking measurements and leave the site because it was too dangerous for them to remain.” EA fails to mention TCEQ responded to Earthworks’ report by saying the agency has collected “several millions of data points for volatile organic compounds” in the Barnett Shale and Eagle Ford Shale and “Overall, the monitoring data provide evidence that shale play activity does not significantly impact air quality or pose a threat to human health .” EA also conveniently ignores that the West Virginia Department of Environmental Protection (DEP) and the Colorado Department of Public Health (CDPH) have conducted air monitoring near well sites as well and found no credible risk to public health. There are at least four other studies that have taken actual air measurements at Marcellus well sites and found emissions that are protective of public health, as well as three such Texas studies to go along with the TCEQ studies. And according to Environmental Protection Agency (EPA) data , aggregate national emissions of six common air pollutants have fallen an average of 63 percent since 1980 — while our population, energy use and GDP have increased. We’re even one-third of the way toward achieving the emissions reductions we committed to under the Paris climate agreement. These trends have been clearly driven by increased use of natural gas made possible by fracking. Environment America Claim: “Currently, oil and gas companies are exempt from key provisions in the Safe Drinking Water Act, the Clean Air Act, the Clean Water Act, and the Resource Conservation and Recovery Act.” REALITY: The notion that the oil and natural gas industry is under-regulated is absolutely absurd narrative activists such as EA continue to push. Oil and gas production activities are subject to eight federal laws : including all relevant provisions of the Safe Drinking Water Act (SDWA); Clean Water Act (CWA); Clean Air Act (CAA); Resources Conservation and Recovery Act (RCRA); Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); the EPCRA; Toxic Substances Control Act (TSCA); and Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Additionally, the oil and gas production sector is also heavily regulated at the state level. And for the thousandth time: hydraulic fracturing has never in its nearly 65-year history been regulated under the Safe Drinking Water Act. Language adopted by bipartisan majorities of Congress in 2005 simply reaffirmed that fact. Which begs the question: If a bill never covered you in the first place, how can you be considered “exempt” from it or any of its provisions, as this report claims? Of course, there is no level of regulation that would be deemed sufficient by a group like Environment America, whose stated goal is to ban fracking. Environment America Claim: “Exposure to low levels of many of the chemicals used in or generated by oil and gas extraction activities can contribute to a variety of health effects, including asthma, cancer, birth defects, damage to the reproductive system and impaired brain development. For example, children’s long-term exposure to low levels of benzene, generally classified as a carcinogen, also harms respiratory health.” REALITY : It is essential to understand that toxicity is completely dependent on dose level and exposure. The mere presence of benzene, for example, does not mean that it is present in toxic levels, as the numerous studies air monitoring studies referred to earlier illustrate. EA insinuates that even low-level benzene exposure is harmful. But benzene is actually present in countless everyday products such as shampoo, tooth paste, paint, PVC pipes and countless plastic products. Environment America Claim : “Fracking targets the oil and gas trapped in shale formations… Sometimes that means wells are drilled in rural areas, such as portions of Colorado or North Dakota, and sometimes that wells are in densely populated areas, such as Los Angeles …” REALITY : There are no fracking or unconventional oil production operations in the city of Los Angeles — none. EA attempts to justify this claim by employing the common activist tactic of expanding the definition of fracking to encompass all oil and gas related activity: “Throughout this report, we refer to “fracking” as including all of the activities needed to bring a well into production using high-volume hydraulic fracturing. This includes drilling the well, operating that well, processing the gas or oil produced from that well, and delivering the gas or oil to market. The oil and gas industry often uses a more restrictive definition of “fracking” that includes only the actual moment in the extraction process when rock is fractured – a definition that obscures the broad changes to environmental, health and community conditions that result from the use of high-volume hydraulic fracturing in oil and gas extraction.” By doing so, activist can lead the public to believe that fracking is encroaching on major populations centers such as L.A., which make it much easier to stoke fears regarding their claimed “dangers” of the process. But discussions about unconventional operations and hydraulic fracturing are simply off-topic when applied to Los Angeles. Fracking is not used as a completion technique at any of the urban drill sites in the city.  All of the facilities recover oil through traditional water flood operations. The report’s attempt to shoehorn fracking and unconventional production into its report proves that it is not engaged in an honest attempt to inform the public. Environment America Claim: “Because of the health hazard created by radon, Pennsylvania has a long record of radon measurements in homes. An analysis of those radon measurements by researchers at Johns Hopkins School of Public Health found that radon levels have increased in counties with extensive fracking since 2004, and also found elevated radon levels on the first floor of houses located within 12.5 miles of a fracked well.” REALITY: The Johns Hopkins study EA is referring to actually found the highest concentrations of radon were in areas with no shale development and direct sampling found radon not linked to fracking. As is the case with so many of the studies EA uses as evidence, the authors merely speculated fracking was the cause. Environment America Claim : “Oil and gas production at fracked wells releases volatile organic compounds and nitrogen oxides that contribute to the formation of smog.” REALITY: Oil and gas production is not a major contributor to ground-level ozone. As EID has emphasized before, publicly available information demonstrates oil and gas production is not the significant contributor to ozone levels. Vehicle exhaust adds far more non-methane volatile organic compounds (NMVOCs) and nitrogen oxides (NOx) — both precursors to ground-level ozone — to the atmosphere than oil and gas production, as data from the EPA’s 2016 Greenhouse Gas Inventory clearly demonstrates. Not only do oil and gas activities account for just six percent of total NOx emissions, which play more of a role in ground-level formation than VOCs, another recent NOAA report found that “The increased use of natural gas has…led to emissions reductions of NOx (40%) and SO2 (44%).” The latest EPA data also shows that NOx emissions have declined more than 50 percent since 1990, while non-methane VOCs have declined 48 percent during that timespan. Environment America Claim : “Contaminants can reach water supplies through faulty well construction, through surface spills, through improper wastewater disposal, or potentially through migration from the shale layer itself .” REALITY : The EPA’s landmark five-year study confirmed, “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources,” and at least 15 other studies say the fracking process, specifically, have not contaminated groundwater. Of course, as covered earlier, EA expands the definition of fracking to encompass all oil and gas related activities. So by that all-encompassing definition, it justifies claiming fracking can contaminate grounder. But EPA has actually found the number of cases of groundwater being impacted by development activities that EA misidentifies as “fracking” to be “small” when compared to the hundreds of thousands of shale wells drilled between 2006 and 2012. “Of the potential mechanisms identified in this report, we found specific instances where one or more mechanisms led to impacts on drinking water resources, including contamination of drinking water wells. The number of identified cases, however, was small compared to the number of hydraulically fractured wells .”(ES-6) And of course, EA’s claim of “potential migration from the shale layer itself” has been debunked as completely implausible countless times by the scientific community. As a 2013 report by Gradient states “[I]t is implausible that the fluids pumped into the target formation would migrate from the target formation through overlying bedrock to reach shallow aquifers.” And: “[T]here is no scientific basis for significant upward migration of HF fluid or brine from tight target formations in sedimentary basins.” Conclusion EA’s claims in this report — aimed at generating headlines — are quite profound: “Schools and day care centers should be safe places for kids to play and learn,” said Rachel Richardson, director of Environment America’s Stop Drilling program and co-author of the report. “Unfortunately our research shows far too many kids may be exposed to dirty air and toxic chemicals from fracking right next door.” The problem is EA’s “research” merely found that there are some schools, nursing homes and hospitals near oil and natural gas development. It made no effort to collect its own data to support their claim that this is leading to adverse health effects. Instead, it relied on long-debunked studies and tired fear tactics. Maybe that’s why the report’s hyperbolic claim that it “serves as a reminder of the unacceptable dangers of fracking, its potential to harm, and the need to bring this risky form of drilling to an end” was virtually ignored by the media. http://everythingshale.com/news/2016/october/14/new-activist-report-rehashes-discredited-fracking-studies-to-target-school-children/ http://everythingshale.com/news/2016/october/14/new-activist-report-rehashes-discredited-fracking-studies-to-target-school-children/ Fri, 14 October 2016 18:36:57 http://everythingshale.com/news/2016/october/14/dakota-access-protests-come-to-houston-as-the-light-crude-market-keeps-shifting/ The fight to halt construction of the Dakota Access crude pipeline made its way to the US energy capital as dozens of activists marched and chanted through the streets of downtown Houston. Carrying signs decorated with oil derricks, solar panels and tombstones, a group of around 75 activists marched for about six city blocks on October 12. The procession was headed by people in traditional Native American dress carrying incense burner. Protesters in downtown Houston. Photo by Allen Reed. The display is the latest in the ever-escalating pushback against crude oil pipelines. Similar satellite protests have been held in Dallas, Detroit, Denver and other sites across the nation. Actress Shailene Woodley, star of “Snowden,” “Divergent” and “Once Upon a Mattress,” was arrested in North Dakota on October 10 and the celebrity opposition pool includes Susan Sarandon, Ben Affleck, Jason Momoa, Leonardo DiCaprio and Pharrell among others. The Dakota Access pipeline cleared a key hurdle October 9 when a federal appeals court denied the Standing Rock Sioux Tribe’s request for an injunction to block construction of the 1,172-mile pipeline that will transport Bakken and light Canadian crude across North Dakota, South Dakota, Iowa and Illinois. Developer Energy Transfer Partners said October 11 that it plans to immediately resume construction but still needs the blessing of the Army Corps of Engineers, which is reviewing the line’s crossing of the Missouri River. Analysts expect startup of the line to be delayed into mid-2017, while climate activists have pledged to continue their opposition to the project. The Houston march coincided with, but wasn’t directly connected to, the restart of several major oil sands pipelines targeted by a Seattle-based climate group. Climate Direction Action, in what appears to be the first multi-pipeline targeting of its kind, attempted to shutter 2.537 million b/d of oil sands throughput by shutting emergency valves along five pipelines — Kinder Morgan’s Trans Mountain, Spectra’s Energy Express, TransCanada’s Keystone and Enbridge’s lines 4 and 67. Climate activists broke into the facilities on October 11 but the lines had all returned to service by October 12. The regulatory uncertainty and the breaking news of Dakota Access lawsuits, protests and general hiccups have caused Bakken and light Canadian crude oil prices to swing back and forth. As early as August 9, crude traders said that a 55-cent/b gain in SSP to the calendar-month average of the front-month NYMEX light sweet crude futures contract (WTI CMA) to minus 80 cents/b was partly due to the expected startup of Dakota Access. A protester in downtown Houston. Photo by Allen Reed. Traders credit a 45 cents/b gain to minus 55 cents/b on August 15 to the line, but the line has also been blamed for weakening prices. The grade fell 30 cents/b on September 12 to minus 85 cents/b after a Department of Justice announcement caused construction on the line to be postponed. With protestors stretched everywhere from North Dakota to the streets of Houston , there’s no clear end for to the Dakota Access controversy or the price volatility that comes with it. The post Dakota Access protests come to Houston as the light crude market keeps shifting appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/14/dakota-access-protests-come-to-houston-as-the-light-crude-market-keeps-shifting/ http://everythingshale.com/news/2016/october/14/dakota-access-protests-come-to-houston-as-the-light-crude-market-keeps-shifting/ Fri, 14 October 2016 13:38:13 http://everythingshale.com/news/2016/october/14/new-york-and-the-standby-tariff-a-breakthrough-for-clean-distributed-energy/ For New Yorkers wanting more clean, distributed energy, the recent Con Edison rate case offers some good news. Presented to New York's Public Service Commission (NYPSC), which regulates utilities in the state, a rate case is a process utilities use to adjust policies and set rates charged to customers. A rate case occurs once every few years and provides an opportunity for state and local governments, along with consumer and environmental advocacy groups, to seek cleaner, cheaper, and more customer-friendly electricity. The Con Edison rate case is considered a bellwether for similar proceedings involving electric utilities throughout New York State which is part of why a recent filing with the NYPSC is so important. Along with more than 20 other parties (including Con Edison, the Real Estate Board of New York, the New York Energy Consumers Council, and several environmental advocacy groups), Environmental Defense Fund (EDF) on September 20 th filed a joint proposal with NYPSC that (among other recommendations) calls for changes to the current standby tariff that are likely to be approved by the Commission. The standby tariff is a special rate charged to commercial and industrial customers who produce some of their own electricity, but remain connected to the grid. It has been a significant roadblock to widespread deployment of distributed generation, such as combined heat and power (CHP) systems, because it imposes burdensome costs and complex regulations on businesses and institutions that produce some of their own electricity independently from the utility. The joint proposal filed by EDF, Con Edison, and others presents several solutions for improving the standby tariff that will make it easier for people, businesses, and institutions to invest in clean, distributed energy resources. Exemptions for Efficient CHP†Together with the Pace Energy and Climate Center (the Pace Center), Environmental Defense Fund (EDF) called for changes to the standby tariff that favor clean, distributed generation, i.e. customer-sited power sources that emit low or zero greenhouse gases and greatly reduce nitrous oxides (NOx), which are harmful pollutants. This is an important distinction, since some distributed generation like diesel generators actually contribute to pollution and harm public health. That's why EDF and the Pace Center recommended that clean distributed energy resources be given preference in qualifying for exemptions from the standby tariff. The joint proposal recommends a much longer exemption for combined heat and power systems. Known more commonly as CHP, combined heat and power systems are most likely to be installed by businesses, industry, and institutions such as universities and hospitals. CHP systems recapture waste heat from natural gas-fired electricity generators and use it to produce steam or hot water for space heating, domestic hot water, or industrial processes. By recapturing waste heat for useful purposes, CHP can cut fuel costs and simultaneously reduce greenhouse gases and NOx pollution. As defined in the standby tariff, Efficient CHP†means CHP systems that meet minimum standards of efficiency (currently 60 percent average annual efficiency) and maximum limits on NOx emissions (currently 4.4 lbs./megawatt hour). Efficient CHP systems are currently exempted from the tariff for four years, which is not long enough to recoup the multimillion dollar investment typically needed to install CHP systems. The joint proposal pushes the exemption to 10 years, which would make for a much more attractive investment and spur greater investment in CHP systems. New York and the Standby Tariff: A Breakthrough for Clean, Distributed Energy CLICK TO TWEET Importantly, the new exemption would tie the length (and therefore, financial value) of the exemption to the degree of efficiency achieved by the CHP system: the more efficient the system, the longer the exemption. CHP systems that achieve average annual efficiencies of 63 to 65 percent will be entitled to a 7-year exemption, and systems that achieve average annual efficiencies of 63 percent or greater and achieve peak efficiencies of 65 percent or greater will be entitled to the full 10-year exemption. The new standby tariff exemption would be available for up to 50 megawatts of new or expanded efficient CHP between now and 2019. A recent report by Sue Tierney of the Analysis Group suggests, based on data showing current deployment of distributed generation , that this new exemption could increase deployment of CHP systems in New York City by at least a third in just the next few years, as CHP developers race to bring their projects within the 50 megawatt cap and meet the 2019 application deadline. Benefits of expanding Efficient CHP Stronger efficiency standards are critical for fighting climate change because the more efficient the CHP system, the less fuel that must be burned (and the lower the corresponding greenhouse gas emissions) to produce the same amount of electricity and usable heat energy. An additional benefit of the new exemption is that it would improve public health because only CHP projects that can reduce NOx emissions to 1.6 lbs. per megawatt hour or less will qualify for the exemption, resulting in a projected reduction of 64 percent in permitted emissions of this pollutant. The new exemption incorporates several concepts advocated by EDF and the Pace Center and would likely spur rapid growth of clean distributed generation because it recognizes that up to 10 years of freedom from the onerous standby tariff may be needed to spur greater investment in Efficient CHP systems. New exemptions for batteries EDF and the Pace Center also proposed a standby tariff exemption for energy storage technology, specifically batteries. Energy storage is a vital part of clean, distributed energy systems because it helps balance the intermittency of renewable energy sources like wind and solar. As a result of our advocacy, the joint proposal contains an exemption from the standby tariff for battery storage systems up to 1 megawatt, and a further exemption for battery storage systems larger than 1 megawatt (available for up to 25 new megawatts in total of this kind of battery storage). 1 megawatt of battery storage is enough capacity to significantly reduce peak electricity demand in commercial buildings, operate emergency lighting and other safety systems in the event of a power outage, or supply the power needs of a few hundred homes. A Promising Future New York is in the midst of a promising effort to reinvent its electricity system called Reforming the Energy Vision . The measures outlined in the September 20 th joint proposal are integral to its success.\ Assuming the Public Service Commission approves our recommendations in the Con Edison rate case, New Yorkers can look forward to a burst of new clean distributed generation that could reduce air pollution, curb climate emissions, and strengthen our 21 st century grid. By Marc Rauch Originally Published on October 5, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/october/14/new-york-and-the-standby-tariff-a-breakthrough-for-clean-distributed-energy/ http://everythingshale.com/news/2016/october/14/new-york-and-the-standby-tariff-a-breakthrough-for-clean-distributed-energy/ Fri, 14 October 2016 09:00:53 http://everythingshale.com/news/2016/october/13/colorado-senator-bennet-latest-democrat-to-say-no-to-local-fracking-bans/ Colorado Senator Michael Bennet is the latest Democratic elected official to reject local fracking bans. During a recent debate between Bennet and his Republican challenger, El Paso County Commissioner Darryl Glenn, 9 News moderators asked for a yes or no answer to the question “Should local governments in Colorado be able to ban fracking with voter approval?” As video of the debate shows, Bennet answered unequivocally: “No” And showing that opposition to local fracking bans is in-fact a bipartisan position, Bennet’s Republican challenger Darryl Glenn agreed, answering “no” as well. Bennet’s opposition to local fracking bans comes just after leaked emails revealed that Hillary Clinton’s campaign called the Bernie Sanders’ ban-fracking agenda “extreme,” “unfeasible” and “irresponsible.” In other words, the Clinton campaign clearly recognized that an anti-fracking platform will not sell with Colorado voters.  From the  emails : “What does that mean? A complete 100% fracking ban. There is no elected dem and I believe no enviro group that takes this position. In fact, such an extreme position threatens the progress of common-sense safety measures like frack fluid disclosure and methane capture/air quality regulations.” “The Denver Post Editorial Board could really smack him for this. This is tricky waters for caucus goers but his language may leave him vulnerable.” Those points were reiterated in what is apparently  a draft statement  highlighting the economic and climate benefits of fracking proposed as a response to Sander’s ad: “Bernie’s call for banning all hydraulic fracturing is, extreme, unfeasible and ignores the contribution natural gas has made to our economy and our efforts to reduce carbon pollution.” Colorado’s leading Democrats have long-recognized the importance of energy development to the state. Colorado’s Democrat governor, John Hickenlooper has been a stalwart supporter of oil and natural gas development, and a leader against ballot initiatives aimed at driving fracking out of the state. Colorado’s former Democrat governor Bill Ritter, Jr., who has been called  the nation’s  “Greenest Governor” and even been credited  with coining the phrase “new energy economy,” has said that natural gas is an important element of a clean energy future: “If you passed a national ban, this industry would go away and it would be  harder for us to get to our place of transition on clean energy and climate .” (emphasis added) More recently, Ritter distanced himself from anti-fossil fuel activists while speaking at the  “ After Fossil Fuels: The Next Economy ”  conference at Oberlin College in Ohio. Ritter pushed back on  remarks  by 350.org co-founder and “Keep-It-In-The-Ground” leader Bill McKibben, from the night before saying , “So it is really interesting to have been here for the last few days, or couple days and especially to have heard the presentation last night by Bill McKibben and some of the presentations made this morning because I would say that I do come at this from a bit of a different orientation .” Earlier this year, a broad coalition of prominent Colorado Democrats lined up with the state’s Republicans to mount a fierce opposition campaign against a pair of proposed ballot initiatives that would have effectively banned fracking in the state.  Democrats like former Denver Mayor Wellington Webb and former United States Senator and Secretary of the Interior Ken Salazar partnered with Colorado’s business community to denounce the measures. And when it comes to local control, an issue that activist groups push as a way to mask their national agenda to ban oil and gas development, even the Denver Post editorial board has indicated that it sees the issue as a fracking ban, as evidenced when it weighed in on a recent legislative proposal saying: “While officials in most Colorado cities and towns would seek responsible accommodation with the energy industry if they had final say in all siting decisions — indeed, most already do this — a few clearly would not choose such a course.” The Denver Post goes on: “They would instead either ban energy extraction outright or impose so many conditions and rules on permits as to make them impossible to obtain.” From leading Democrats, Michael Bennet and Hillary Clinton, to members of the State House of Representatives coming out against these ban-fracking measures, it is clear they understand Colorado voters are not interested in an anti-energy agenda. http://everythingshale.com/news/2016/october/13/colorado-senator-bennet-latest-democrat-to-say-no-to-local-fracking-bans/ http://everythingshale.com/news/2016/october/13/colorado-senator-bennet-latest-democrat-to-say-no-to-local-fracking-bans/ Thu, 13 October 2016 12:23:42 http://everythingshale.com/news/2016/october/13/the-road-to-mosul-reports-from-the-field/ Two longtime veterans of American military operations in Iraq share their assessments of the campaign against the Islamic State as Iraqi forces prepare to liberate the city of Mosul. On September 22,  Brig. Gen. William F. Mullen III, USMC,  and Daniel Green addressed a Policy Forum at The Washington Institute. Mullen, the commanding general of Marine Air Ground Task Force Training Command at Twenty-Nine Palms, California, has led U.S. forces on multiple fronts, including the Fallujah area of Iraq. Green is a defense fellow at the Institute and recently served in Iraq as a Sunni tribal analyst for the U.S. Navy. The following is a rapporteur’s summary of their remarks. WILLIAM MULLEN U.S. involvement in Iraq today faces constraints that were previously absent. The biggest difference now is the dramatically reduced U.S. footprint and control over operations. Coalition forces, especially the American component, often struggle with impatience because their preferred timeline for operations does not match that of the Iraqis. Moreover, the initial stagnancy of the Iraqi ground forces made it difficult to independently verify Iraqi intelligence regarding enemy targets, though the coalition was able to spot and strike them once Baghdad began conducting offensives into Islamic State-controlled areas. The opponent has evolved as well. While the Islamic State’s predecessor, al-Qaeda in Iraq, faced constraints on its brutality due to the influence of al-Qaeda Central, IS today behaves in ways that are brutal beyond belief. In the current situation, measuring progress depends on perspective. Despite Western impatience, political and military imperatives dictate that the upcoming offensive to retake Mosul be an indigenous Iraqi effort, which means that it will happen on an Iraqi timeline. From an Iraqi perspective, the campaign is progressing well, as forces are currently engaged in setting the stage for the Mosul offensive. Looking to the future, the success of the current campaign will depend on the Iraqi government’s ability to capitalize on the coalition air campaign, regain sovereign control, and push IS underground. The hope is that as Iraqi forces push toward Mosul, IS will flee, as they did in Fallujah previously. Still, brute force will not achieve coalition aims in the absence of political progress. The Iraqi government must attempt to reconcile with Sunni tribes and populations in order to undermine the insurgency that will likely follow an IS defeat. Religious leaders have a vital role to play in this war by discrediting the radical interpretation of Islam that underlies the IS caliphate. Iraqis must also resolve the question of Kurdish autonomy, reestablish a monopoly on the legitimate use of force by bringing all Shiite militias under government control, and gradually push out Iranian influence now that IS no longer threatens Baghdad. Moreover, the Iraqi military still faces enormous challenges due to a widely ingrained culture of corruption that is likely to endure for some time. Despite the importance of political progress, the reality is that the military aspect of the Mosul offensive will occupy the attention of Iraqi forces for the time being. Given that the United States lacks the influence over the Iraqi government that it once had, this war will be fought on Iraqi terms. Political progress will come, but it remains secondary to the military imperative of retaking Mosul — especially since the campaign is a significant burden on the Iraqi economy. Western players may not approve of this strategy, but they may not have a choice as the Iraqi government chooses to confront its challenges one at a time. DANIEL GREEN Sunni Arab tribes play a vital role in the Iraqi political landscape and the ongoing conflict. Today’s war is not as amenable to quick technological or monetary solutions as past conflicts seemed to be. It requires in-depth knowledge of the human terrain outside Baghdad, including the cultural and social dimensions that underlie the fighting. Unfortunately, U.S. institutional knowledge of the Iraqi tribal landscape has diminished since the troop surge of 2007. Although the Marine Corps and the U.S. embassy in Baghdad institutionalized such knowledge to some extent, tribal relations today face new obstacles. Chief among them is the U.S. military’s rotational system, which develops well-rounded officers but often hinders the development of expertise on certain issues. The small size of the U.S. footprint also hampers tribal engagement, while embassy control over tribal relations complicates military coordination, potentially obstructing outreach. Moreover, the fact that many tribes now cooperate with IS or live under its control makes it difficult to arrange meetings in Baghdad. Moving forward, the United States should consider developing a long-term rotation schedule in order to entrench the military’s understanding of Iraq’s human terrain and tribal history. Regarding the current campaign, one must consider the conflict’s political dimensions. The air war has degraded IS to the point where it is beginning to behave less like a state and more like an insurgent group, but there are limits to what can be achieved with airpower alone. Once IS has been defeated militarily, it will likely transform into a low-level insurgency, but the persistence of that insurgency will depend on the post-IS political landscape. To undermine the coming insurgency, the Iraqi government must build a legitimate and inclusive government, reconcile with Sunni tribal organizations, and rebuild trust between the population and rulers in newly liberated areas. Despite these daunting tasks, there is some reason for optimism. Reconciliation involves both bottom-up and top-down arrangements; by that standard, the reconciliation process is already occurring as government forces and Shiite militias work with local partners to liberate certain areas from IS. Additionally, the group’s brutality against the population has caused it to lose legitimacy in some areas. Meanwhile, many local tribal leaders have been stepping up and filling security gaps, using their own resources to provide humanitarian assistance and fighting capabilities. The long-term focus should remain on restoring Iraqi sovereignty and building a legitimate government free of interference by outside players like Iran. This process starts with demobilization of the various Shiite militias that are outside government control, even though many of them are militarily stronger than Iraqi forces. And it should culminate with reconciliation between the Shiite-led government and the Sunni population, since this relationship will be key to curbing the Islamic State’s appeal moving forward. This summary was prepared by Kendall Bianchi.  Originally Posted on October 11, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/october/13/the-road-to-mosul-reports-from-the-field/ http://everythingshale.com/news/2016/october/13/the-road-to-mosul-reports-from-the-field/ Thu, 13 October 2016 09:00:35 http://everythingshale.com/news/2016/october/13/goodrich-petroleum-emerges-from-bankruptcy/ The Houston-based drilling company was able to negotiate with its creditors to reduce its debts and costs and retain its assets. The company gets $40 million in new capital through second lien notes due in 2019. Half of that money will pay down outstanding debt and the other half will be used to fund the company’s drilling program in the Haynesville Shale, according to a company statement. Goodrich filed for bankruptcy in April, one of a string of companies bowing to the prolonged pressures of depressed oil prices. At the time, the company listed debts of $507 million and sought a protection plan to eliminate $400 million of that debt. Goodrich, an independent oil and natural gas exploration and production company, is active in the Eagle Ford, Haynesville and Tuscaloosa shale plays in South Texas, Northeast Texas and Northwest Louisiana, and southwestern Mississippi, respectively. Comments comments http://everythingshale.com/news/2016/october/13/goodrich-petroleum-emerges-from-bankruptcy/ http://everythingshale.com/news/2016/october/13/goodrich-petroleum-emerges-from-bankruptcy/ Thu, 13 October 2016 08:25:13 http://everythingshale.com/news/2016/october/13/exxon-mobil-global-energy-and-plastics-demand-will-push-emissions-up/ The world’s expanding middle class, particularly in China and India, is creating demand for plastics and other chemicals that will grow more than 4 percent a year, double the demand growth for energy, Neil Chapman, president of Exxon Mobil Chemical, said at a luncheon of National Association of Manufacturing held at Exxon’s campus here. A large chunk of the chemicals and plastics consumed in Asia will be exported from the Texas Gulf Coast, he said. Although carbon emissions are declining in the developed world due to increased energy efficiency, renewable power and natural gas replacing coal more, the rapid growth of the developing world will mean global emissions ticking upward until about 2030 before slowly beginning to fall, he said. “Climate change is an issue we have to address as a society,” Chapman said. “But, at the same time, there’s 1 billion people without electricity in the world.” Exxon is investing several billion dollars to increase the production of ethylene and polyethylene – the world’s most common plastic – at its Baytown and Mont Belvieu plants. The project represents Exxon Mobil’s first major U.S. chemical expansion in more than 15 years with completion slated for the second half of 2017. Exxon also has a joint venture with the Saudi Arabia Basic Industries Corp., known as SABIC. The companies will soon decide whether to build another massive chemical plant in southeastern Texas or Louisiana. The demand for plastics is largely driven by rising incomes in China and other developing countries, where people are spending more of their money on consumer products, many of them made of or packaged in plastic. When disposable incomes increase, Chapman said, people buy cars or shop at fancier grocery stores instead of outdoor neighborhood markets. “Everything is covered in plastic [in grocery stores]. In my business, we love that,” he said. Much of the plastics production needed to supply the developing word will come from the Gulf Coast, where access to cheap and ample natural gas has fueled a petrochemical boom. A component of natural gas, ethane, is the primary building block of most plastics. The American Chemistry Council, a chemical industry trade group, estimates that about 275 petrochemical projects are under construction or planned across the country through 2023, and they will create about 75,000 jobs. The combined cost is $170 billion, including almost $55 billion in Texas. The chemical sector now accounts for 51 percent of all U.S. manufacturing spending in 2016, according to the National Association of Manufacturing. “Houston is at the absolute epicenter of this revolution,” Chapman said, noting that more than 40 percent of the nation’s base chemicals are produced in the Houston area. The United States had little petrochemical growth in the last 15 years. As recently as a decade ago, it was, the most expensive place in the world to produce chemicals, Chapman said. The shale drilling boom, which unlocked vast reserves of oil and natural gas, changed that. “That’s an astonishing transformation from just a few years ago,” Chapman said. Comments comments http://everythingshale.com/news/2016/october/13/exxon-mobil-global-energy-and-plastics-demand-will-push-emissions-up/ http://everythingshale.com/news/2016/october/13/exxon-mobil-global-energy-and-plastics-demand-will-push-emissions-up/ Thu, 13 October 2016 06:00:02 http://everythingshale.com/news/2016/october/13/increased-regulations-at-refineries-at-least-in-california/ This summer, the state of California proposed changes to regulations aimed at improving safety at oil refineries. You can see the full release here . “Key features of the proposed regulations include: Increased employer accountability for the mechanical integrity of refinery equipment; Requirements to adopt inherently safer designs and systems, to the greatest extent feasible; Increased employee involvement in all aspects of the safety and prevention program; Periodic workplace safety culture assessments to evaluate whether management is appropriately emphasizing safety over production pressures; Authority for refinery personnel to shut down a unit if needed in the event of an unsafe condition or emergency and provisions for anonymous reporting of safety hazards; Requirements for investigations to determine root causes of any incidents that do occur and develop interim and permanent corrective measures in response; and Annual public reporting of refinery safety metrics” I can’t argue with any of the points specified in the proposal. But of course, implementation is another animal all together. However, I think global technology trends will be able to help refineries adhere to these regulations. For instance, the Industrial Internet of Things will enable plant personnel to continuously, and remotely, monitor mechanical equipment in the refinery. Various sensors can be placed on equipment to measure vibrations, heat output, flow rates, and acoustics among other variables. All of this data can be collected and analyzed by equipment experts, either on site or in a central location. In fact, many vendors of mechanical equipment offer this as a service and many other companies (including Schneider Electric) offer this service as well providing predictive maintenance capability to mechanical equipment. Another technology, Operator Training Simulators (OTSs), has developed as a result of the aging workforce and the impending “great crew shift.” This is a huge driver in O&G . We need to manage this workforce transition efficiently and effectively. Many companies have turned to OTS as a way to get the new workforce up-to-speed as quickly as possible without sacrificing effectiveness. In fact, OTSs have proven to be more effective and promote knowledge retention longer than the traditional on-the-job training. Many software vendors , including Schneider Electric, not only provide OTS, but enhanced OTS with virtual reality to allow for control room operators to interact with field personnel who are working in a virtual plant to develop teamwork and further enhance safe operations. I think these regulations are important not only to the workers in the plant, but the surrounding communities. The technology exists to make everyone safer; we should be using it as much as possible. To learn more about plant safety and workforce optimization solutions, please download our free Workforce Optimization Methodology Whitepaper.         The post Increased Regulations at Refineries, at least in California appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/13/increased-regulations-at-refineries-at-least-in-california/ http://everythingshale.com/news/2016/october/13/increased-regulations-at-refineries-at-least-in-california/ Thu, 13 October 2016 04:02:57 http://everythingshale.com/news/2016/october/13/coking-market-could-up-capp-thermal-prices-in-more-connected-coal-market/ Speculation over a fourth-quarter benchmark settlement near $200/mt in the Asian seaborne coking coal market has Central Appalachian sources talking of strengthening Central Appalachian thermal prices through the winter, with pricing potentially approaching $70/st. News on Oct. 10 of a Q4 mid-vol deal at $200/mt between Peabody Energy of Australia and Nippon Steel of Japan raised eyebrows. Sides in Asia are still negotiating a Q4 price, and the Peabody-Nippon deal could point to a settlement at $200/mt, or at least much closer to that figure than many have estimated. One West Virginia CAPP producer heavy into the international markets said a month ago Asian buyers were looking for a Q4 settlement at $155/mt but had recently increased the offer to $180/mt. The producer said a price of $200/mt would be “incredibly higher” than anticipated. “No doubt the market is trending up, but a number like that, if we see a settlement at about $200/mt, it means you really have to think that you’ll see higher prices than expected through 2017,” the producer said. Closer connection While Asian coking prices usually have little effect on CAPP thermal figures, this year there is a much greater connection between the markets. Historically, high prices in Asia increase prices for US met exports to Europe, which holds true today. But what has changed in 2016 is coal supply. Extreme production cuts in the eastern US this year have limited available thermal and met tonnage. A rise in export met pricing months ago came at a greater pace and ahead of a rise in thermal pricing as summer began. Producers took advantage of the met increase and sold thermal tons that could be blended into the met market. Those thermal tons are not coming back, producers continue to say, as coal companies churn out tonnage under contract with no desire to increase production. US Energy Information Administration data shows CAPP production is down almost 30% year to date, a drop of about 25 million st. “Unless you have a committed long-term deal at a good price, you’re not looking to mine extra tons,” one Virginia-based CAPP producer said. “Even for a good quarterly deal, it’s going to cost you to open back up mines and get production going again. You can’t do that unless you know you’re making it back and then some.” Low thermal supply Pricing for CAPP CSX-quality coal (12,500 Btu/lb, 1.6 lbs SO2/MMBtu) has increased into the mid- to upper-$50/st range and has held steady for weeks despite a drop in the kind of demand seen when summer heat blanketed the US. Brokers and producers alike have said a dwindling CAPP supply has and will keep pricing steady through the fall shoulder season and noted the recent hike in natural gas prices to well above $3/MMBtu should reinforce the trend. Sources also said utilities are preparing for coal increases during the winter and starting to run scenarios on coal burn with CAPP pricing in the $60s/st. “A lot of things are pointing in the right direction for CAPP thermal to strengthen,” the Virginia producer said. “We were worried about the shoulder season, but if gas stays up at, hits $3.50 to $4, then even some CAPP coal is in the money to burn. “If we have a cold winter, I can see coal see coal prices knocking at $70/st.” The post Coking market could up CAPP thermal prices in more connected coal market appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/13/coking-market-could-up-capp-thermal-prices-in-more-connected-coal-market/ http://everythingshale.com/news/2016/october/13/coking-market-could-up-capp-thermal-prices-in-more-connected-coal-market/ Thu, 13 October 2016 03:00:08 http://everythingshale.com/news/2016/october/12/what-s-in-store-for-global-polyethylene-and-polypropylene-out-to-2026/ Worldwide polyethylene production is seen to grow from 84.7 million mt in 2015 to 121 million mt by 2026. Platts Analytics estimated that around 12 million mt of additional polyethylene supply will be needed between 2024 and 2025. The expected shortfall would require around six to 10 world-scale ethylene crackers to be built between 2023 and 2026 to plug the gap. That additional supply is most likely to come from low-cost regions such as North America and the Middle East, and strong demand centers like India and China. Meanwhile, the global polypropylene market is expected to remain tight to long through 2022 with the addition of new on-purpose propylene units and associated polypropylene units. But with the increase in demand, the global polypropylene market is expected to be in a deficit through the rest of our forecast period. Our analysis shows an average of 2.74 million mt in additional propylene supply will be needed each year from 2023 to 2026 to keep up with annual 3.5% global demand growth throughout the next decade. Polyethylene and polypropylene – global trade flows All of the information contained within this graphic is taken from Platts Global Polyolefins Outlook report and data package. For more information visit: http://www.platts.com/GPO .   The post What’s in store for global polyethylene and polypropylene out to 2026? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/12/what-s-in-store-for-global-polyethylene-and-polypropylene-out-to-2026/ http://everythingshale.com/news/2016/october/12/what-s-in-store-for-global-polyethylene-and-polypropylene-out-to-2026/ Wed, 12 October 2016 23:01:49 http://everythingshale.com/news/2016/october/12/cheniere-cleared-to-export-lng-from-second-sabine-pass-plant/ Cheniere's second liquefaction plant at Sabine Pass was approved by the Federal Energy Regulatory Commission in a notice on Wednesday. Each plant has the capacity to produce the equivalent of about 650 million cubic feet a day. Additional volumes will come at a testing time for the global LNG market, which is reeling from a worldwide glut that's set to worsen through 2020 as demand from key Asian customers slows. Still, the first LNG exports from the lower 48 states have helped whittle down a U.S. supply glut and put Cheniere on the road to posting its debut profit. Train 2, as the plant is known, began producing LNG on July 28 during the commissioning process. Trains 1 and 2 were shut in late September for planned work, which was expected to last about four weeks. Next year, the company is planning to bring online a third plant and start the commissioning of a fourth. Sabine Pass took in 119 billion cubic feet of gas from April 1, which marked the start of the U.S. gas stockpiling season, through Sept. 9, ABB Inc. data show. During the same period, the country's supply glut versus the five-year average fell to 299 billion cubic feet from 874 billion. By starting up two liquefaction plants, Cheniere will be able to start taking in fixed payments for 20 years from customers whether or not they decide to actually take any LNG from Sabine Pass. A contract with Royal Dutch Shell Plc goes into effect this December for Train 1, while one with Spain's Gas Natural Fenosa starts in September 2017, according to a company presentation earlier this year. Sabine Pass has demonstrated that the plant has “been constructed in accordance with commission approval and applicable standards and can be expected to operate safely as designed,” the commission said in the notice. Comments comments http://everythingshale.com/news/2016/october/12/cheniere-cleared-to-export-lng-from-second-sabine-pass-plant/ http://everythingshale.com/news/2016/october/12/cheniere-cleared-to-export-lng-from-second-sabine-pass-plant/ Wed, 12 October 2016 15:53:15 http://everythingshale.com/news/2016/october/12/obama-advisor-can-t-change-the-facts-natural-gas-deserves-credit-for-declining-ghg-emissions/ Data clearly show natural gas has done more to reduce U.S. greenhouse gas emissions than any other government scheme or agreement. But that didn’t keep President Obama’s senior advisor on energy and climate policy from claiming on Tuesday that government policies deserve much of the credit. As Morning Consult reported , Obama senior advisor Brian Deese argued at an event organized by Columbia University’s Center on Global Energy Policy that tax credits for wind and solar power and investments in clean energy research should largely be credited for U.S. greenhouse emissions dropping to their lowest levels in more than two decades . “It’s not an accident of history,” Deese said. “In fact, it is directly linked to policies that have now changed the trajectory of where we are projected to go .” Though Deese did give some credit to the increased natural gas use that has been made possible by the shale boom, he indicated the government will have to take the lead from here on out for the trend to be sustainable. The facts show otherwise. As the following EID graphic illustrates, CO2 emissions have plummeted at the same time the economy has grown significantly. This simply would not have happened without an abundant supply of clean burning natural gas, which has not only led to a manufacturing boom and an economic turnaround from the depths of the Great Recession, it is also fueling electrical generation at an unprecedented clip. As result of abundant and clean-burning natural gas, the U.S. Energy Information Administration reports that between 2006 and 2014, natural gas has prevented 1.25 billion metric tons of carbon dioxide   from being emitted from power plants in the United States . By comparison, the use of renewable energy has prevented 789 million metric tons of carbon dioxide, according to the EIA. This EIA graphic shows how natural gas has outpaced renewables in terms of CO2 reductions. Notably, the above reductions attributable to renewables have been facilitated by natural gas. A recent report that noted that renewables like wind and solar absolutely must have natural gas as a backup to be a viable energy option. The Breakthrough Institute (BTI) — an environmental group founded by individuals whom Time Magazine recognized as “ heroes of the environment ” — has similarly found that natural gas has prevented 17 times more carbon dioxide emissions than wind, solar, and geothermal  combined . And a recent report by the Manhattan Institute shows that for every ton of CO2 emission reductions attributable to solar power, 13 tons can be attributed to natural gas. EIA is also projecting 2016 U.S. CO2 emissions to drop to 5.18 billion metric tons, down better than 1.5 percent from 2015 levels. Energy-related CO2 emissions were 2,530 million metric tons in the first six months of this year, the lowest levels since 1991 . This could have something to do with the fact that EIA expects natural gas to fuel 34 percent of electricity generation compared with 30 percent for coal. The fact that emissions are continuing to significantly drop from 2015 levels this year is notable considering CO2 emissions fell two percent in 2015. The latter trend prompted the International Energy Agency to state for the record what is becoming more and more obvious. “In the United States, emissions declined by 2% (in 2015), as a large switch from coal to natural gas use in electricity generation took place .” It is abundantly clear to just about everyone that the shale revolution deserves credit for an unprecedented coupling of economic growth and declining GHG emissions. http://everythingshale.com/news/2016/october/12/obama-advisor-can-t-change-the-facts-natural-gas-deserves-credit-for-declining-ghg-emissions/ http://everythingshale.com/news/2016/october/12/obama-advisor-can-t-change-the-facts-natural-gas-deserves-credit-for-declining-ghg-emissions/ Wed, 12 October 2016 14:54:33 http://everythingshale.com/news/2016/october/12/colorado-parks-wildlife-fracking-has-little-to-no-impact-on-mule-deer-population/ Oil and natural gas development in Western Colorado is having “little to no impact on mule deer survival.” That was the message Garfield County Energy Advisory Board members heard earlier this month from Colorado Parks & Wildlife (CPW) researcher , Chuck Anderson, who is leading an eight-year study looking at potential impacts of energy development on mule deer populations. As the Glenwood Springs Post-Independent reports : “Ongoing research in the Piceance Basin indicates there is little to no negative impact on mule deer survival from energy development, according to a leading researcher with Colorado Parks and Wildlife.” While CPW’s research team did find that energy development has the potential to affect mule deer behavior, Anderson said this does not impact their survival or reproduction rates.  Also from the Glenwood Springs Post-Independent: “It does alter their behavior,” he said. “You know…if they’ve got a big rig at night with lights and compressors…they’re going to stay a little farther away from that. So they modify their behavior around the different activity…But, Anderson went on to say, those modifications in behavior do not affect the deers’ survival or reproduction rates. (emphasis added) The ongoing study is tracking mule deer populations and behavior in Western Colorado’s Piceance Basin, a significant location because, as the story notes, Piceance “has one of the largest natural gas reserves in the country” and is home to “one of Colorado’s most important mule deer populations.” CPW researchers also found that industry innovations, which are lessening the footprint of energy development, are minimizing any potential impact on mule deer: “However, the deer are able to offset those influences under the current conditions, Anderson said at last week’s meeting. In qualifying the impact in the Piceance, he noted both the use of directional drilling and lower density of well pads as contributing to the finding that energy development is not negatively impacting survival rates. ” (emphasis added) The findings completely debunk anti-fracking activist groups who have been saying for years that oil and natural gas development is negatively impacting Western Colorado’s wildlife. The anti-fracking Center for Western Priorities even maintains an entire web page devoted to claiming that fracking is to blame for declining mule deer populations in Colorado and elsewhere. Well, there’s another phony talking point knocked right off the list. http://everythingshale.com/news/2016/october/12/colorado-parks-wildlife-fracking-has-little-to-no-impact-on-mule-deer-population/ http://everythingshale.com/news/2016/october/12/colorado-parks-wildlife-fracking-has-little-to-no-impact-on-mule-deer-population/ Wed, 12 October 2016 14:11:58 http://everythingshale.com/news/2016/october/12/secretary-moniz-statement-on-reaching-threshold-for-paris-agreement-s-entry-into-force/ WASHINGTON – As of today, 72 parties accounting for 56.75 percent of global greenhouse gas emissions have joined the climate agreement negotiated at COP21 in Paris, meeting the requirements of 55 parties representing 55 percent of global emissions needed for the Paris Agreement to enter into force in 30 days, prior to the COP22 meeting in Morocco. U.S. Secretary of Energy Ernest Moniz released the following statement: Passing the threshold for the Paris Agreement's entry into force is a historic moment, marking a new era of global consensus on climate change action. This agreement will further accelerate development of a multi-trillion dollar market for clean energy technology solutions that reduce heat-trapping emissions. While the Agreement's entry into force is cause for celebration, our work has just begun. The central challenge for this new era will be to accelerate the deployment of energy technologies, develop new innovative low-carbon solutions quickly, meet the goals our nations have declared before the world, and encourage even greater ambition. That's why, on the first day of COP21, President Obama announced Mission Innovation, an initiative in which 20 countries plus the European Union have now pledged to each seek a doubling of clean energy R&D investments over a five-year period. Private sector leaders announced the parallel Breakthrough Energy Coalition, again aimed at accelerating the transition to a clean energy economy. As we have already seen in the United States, building a clean energy economy creates jobs and entrepreneurial opportunities, lowers energy costs for families and businesses, enhances energy security, and has the potential to expand access to electricity to billions worldwide. The United States is committed to lead by example on clean energy and energy technology innovation. As I travel across the country, the innovation I see taking place in every state convinces me that America has the workers, the entrepreneurs, the scientists, the engineers, and the desire to be the global R&D leader for clean energy technology, research, development, and deployment. With each country doing their part to meet the Paris Agreement, we can leverage science and technology to combat climate change, improve quality of life around the world, and create unprecedented opportunities through a low-carbon economy.†http://everythingshale.com/news/2016/october/12/secretary-moniz-statement-on-reaching-threshold-for-paris-agreement-s-entry-into-force/ http://everythingshale.com/news/2016/october/12/secretary-moniz-statement-on-reaching-threshold-for-paris-agreement-s-entry-into-force/ Wed, 12 October 2016 14:00:56 http://everythingshale.com/news/2016/october/12/20-000-gallons-of-fuel-spill-after-barge-hits-south-texas-dock/ Cmdr. Keith Pierre says nobody was hurt and the barge was no longer leaking Wednesday at a site on the Intracoastal Waterway near Port Isabel. Authorities are trying to determine what caused the Capt. Jim Green on Tuesday night to hit the dock at the Subsea 7 facility - the intended destination. The Coast Guard had no further details on the load of low sulfur diesel fuel. Pierre had no reports of wildlife being impacted. A Coast Guard statement says Miller Environmental was on the scene Wednesday for air monitoring and recovery operations. Coast Guard aircraft were being used to survey the scene. Comments comments http://everythingshale.com/news/2016/october/12/20-000-gallons-of-fuel-spill-after-barge-hits-south-texas-dock/ http://everythingshale.com/news/2016/october/12/20-000-gallons-of-fuel-spill-after-barge-hits-south-texas-dock/ Wed, 12 October 2016 12:55:19 http://everythingshale.com/news/2016/october/12/apache-ut-arlington-to-study-water-quality-around-balmorhea/ Kevin Schug, a chemistry professor and director of UT's Collaborative Laboratories for Environmental Analysis and Remediation, will lead the work. Schug said in a statement that his agency will conduct a baseline analysis of surface and groundwater quality, setting the bar for future monitoring as Apache begins to expand drilling operations around the 500-person town of Balmorhea, home to the famous spring-fed pool at Balmorhea State Park. The company has dug about 15 wells so far, but expects it could drill as many as 3,000 in the area over the next 20-plus years. Last month, Apache announced it has discovered about 15 billion barrels of oil and gas along a strip of Reeves County, in the southern corner of the prolific Delaware Basin. Comments comments http://everythingshale.com/news/2016/october/12/apache-ut-arlington-to-study-water-quality-around-balmorhea/ http://everythingshale.com/news/2016/october/12/apache-ut-arlington-to-study-water-quality-around-balmorhea/ Wed, 12 October 2016 12:47:14 http://everythingshale.com/news/2016/october/12/unhinged-gasland-director-accuses-obama-s-former-epa-chief-of-lying-about-fracking/ Embattled Gasland Director Josh Fox, whose films have been utterly discredited , had a meltdown this week during an interview with the BBC, when he was asked some tough questions about his debunked films. After BBC’s Sarah Montague brought up the fact that former Environmental Protection Agency (EPA) Administrator Lisa Jackson said there were “ no confirmed cases ” of water contamination from the fracking process, Josh Fox went on a rant that culminated in him calling Jackson a liar. Here’s how that went down : Montague: Hang on, why in that case – just picking up one of your points – why if it’s so clear on the contamination of drinking water did the former head of the U.S. Environmental Protection Agency (EPA) say to Congress that there have been zero proven cases of water contamination due to fracking? Josh Fox: Well she was lying. Lisa Jackson was absolutely not saying correctly the information. Montague: She was lying? She testified before Congress and you say she was lying? document.createElement('audio'); https://energyindepth.org/wp-content/uploads/2016/10/FoxonBBC.mp3 Click here to listen to the entire interview starting at 2:21:58. After the interview, Fox filmed himself having a temper tantrum outside the BBC studio where he proceeded to claim it was a “sneak attack” and that the BBC was “an arm of the oil and gas industry.” Oh and he also called the mainstream media “assholes.” This isn’t the first time Fox has resorted to calling people liars if they challenge the phony claims in his films. After EPA released its landmark groundwater study , which found “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources,” Fox appeared on  Fox Business  for an interview with Stuart Varney to discuss the results. When Varney told him he could light his water on fire at a property in Pennsylvania long before fracking, Fox accused him of lying: Josh Fox : You are absolutely wrong. Varney : I did it myself. Josh Fox : I do believe you’re lying right now. Varney : Lying?! Josh Fox : Yes I do, on your own show. Varney : This interview is over young man. The interview is over, I am not lying, I did it myself. Thank you, goodbye. You’re out of here son, you are out of here. Of course, Josh Fox and his anti-fracking allies, have been getting a lot of pushback lately from Democrats who are leaders in the climate movement, including President Obama who said in an interview with Leonardo DiCaprio, [Anti-fracking activists’] attitude is we got to leave that stuff in the ground if we’re going to solve climate change. And I get all that.  On the other hand,  the fact that we’re transitioning from coal to natural gas means less greenhouse gases.” Newly leaked emails from Hillary Clinton’s aides show her campaign thinks the anti-fracking agenda is “extreme,” “unfeasible” and “irresponsible.” We almost feel sorry for Josh Fox, who must be feeling pretty lonely – but his temper tantrums aren’t doing him any favors. http://everythingshale.com/news/2016/october/12/unhinged-gasland-director-accuses-obama-s-former-epa-chief-of-lying-about-fracking/ http://everythingshale.com/news/2016/october/12/unhinged-gasland-director-accuses-obama-s-former-epa-chief-of-lying-about-fracking/ Wed, 12 October 2016 12:44:59 http://everythingshale.com/news/2016/october/12/mexico-seeks-to-export-maya-crude-to-west-coast/ While Mexico has been a regular supplier of Maya oil to U.S. Gulf Coast refineries, it hasn't shipped any to the West Coast since February 2008, according to data from the U.S. Energy Information Administration. California refineries such as Valero Energy Corp.'s Benicia, Chevron Corp.'s El Segundo and Phillips 66 used to be big buyers of the grade. Petroleos Mexicanos, the state-controlled oil producer, took the first step in making Maya exports to the West Coast a reality Tuesday by issuing an official price for November sales. Earlier in the day, Pemex said on its official Twitter account that it was planning to resume shipments to the region. With stronger margins in the U.S., Pemex's move to restart Maya exports to the West Coast allows the company to capture a higher value for the crude compared to Europe and Asia,â€Â Ixchel Castro, a senior analyst for Latin American oils and refining markets at Wood Mackenzie in Mexico City, said in an e-mail. The exports halted at a time when margins in Asia were stronger, she said. The company's oil trading arm, known as PMI, set the differential to sell Maya into the West Coast at $3.70 a barrel below the price of a basket of crudes and fuel oil prices for the region. The differential, known as the K factor, compares with minus $12.65 a barrel in January 2008, the last one issued, according to data compiled by Bloomberg. The official selling price for different parts of the world is determined using a regional basket of oils as a benchmark. Maya's discount to the Asian basket is $10.80 for November. Facing more competition Mexico is facing increasing competition in Asia from rising production in places like Saudi Arabia and Iran,†Gurpal Dosanjh, a Bloomberg Intelligence analyst said in an interview Tuesday. With a big refinery maintenance season coming up on the U.S. Gulf Coast, it makes sense for them to try to pursue the West Coast once again.†Pemex is looking for new destinations for its crude as exports rose to 1.26 million barrels of oil daily in August, the highest in 10 months, according to data from the Mexico Energy Information Agency. Shipments increased as low refinery utilization rates freed more supplies for international markets, John Galante, a senior analyst at Boston-based ESAI Energy, said in a telephone interview. Refinery utilization rates at Pemex's six refineries slid to 51 percent in August. That compares with an 88.3 percent U.S. utilization rate Sept. 30. Pemex has yet to determine when the first cargo will be sent or the amount of crude, according to a spokesman who asked not to be identified in accordance with the company's policy. The move will allow Pemex to expand and diversify its client base, he said. Pemex isn't currently considering expanding Maya exports to Asia, he said. Though part of the U.S., the West Coast is seen as a market that is very different from the Gulf Coast. It mainly attracts barrels from Alaska, Saudi Arabia, Canada and Ecuador that travel the Pacific Ocean. Maya can compete with Saudi crude given Mexico's proximity to the U.S., but very few shipments are likely to head north, Mara Roberts, a New York-based analyst at BMI Research, said in an e-mail. The last time Mexican exports were sent to the West Coast, it was a bit erratic and before that, volumes were quite low,†she said. I think Maya crude is highly unlikely to squeeze out Canadian or Saudi shipments altogether, but rather carve out a small piece of the West Coast pie for itself.†Comments comments http://everythingshale.com/news/2016/october/12/mexico-seeks-to-export-maya-crude-to-west-coast/ http://everythingshale.com/news/2016/october/12/mexico-seeks-to-export-maya-crude-to-west-coast/ Wed, 12 October 2016 12:40:41 http://everythingshale.com/news/2016/october/12/turtle-bayou-oilfield-cleanup-opens-nature-preserve/ Until recently, Turtle Bayou was like many places in Texas abandoned by oil and gas development: alligators, bald eagles and bobcats lived among unplugged oil wells. Nonetheless, risks remained for the nature preserve's wildlife and human visitors–potential oil spills, waste pits and possible contaminants in the water. But ultimately cleaning up remnants of the defunct oil field became an imperative for protecting drinking water quality for the Chambers-Liberty Counties Navigation District, which owns the 511-acre preserve. With help from the Texas Railroad Commission, which put more than $1 million o into the project, the preserve's wells were plugged and its oilfield sites cleaned up. The rehabilitated preserve opened to the public on Friday as a free, safer place to hike, kayak and observe a rich mixture of wildlife that live that call the wetlands, prairie and forest home. It allows us to have peace of mind,†said Matt Singer with the Galveston Bay Foundation, which has a conservation easement on the land. There is not going to be a gas leak or an oil spill out there.†The preserve is part of the Turtle Bayou Oil Field, which was discovered in 1952 along Lake Anahuac between Houston and Beaumont.  Both federal and state funds financed the cleanup of the site, with most coming from the Railroad Commission's Oil and Gas Regulation and Cleanup Fund, a pot of money filled by fees taken from the oil and gas industry. The money is used in areas like Turtle Bayou, where operators left wells unplugged. The commission also used $176,300 from its Brownfield Response Program, a five year $500,000 grant from the U.S. Environmental Protection agency to cleanup abandoned oil and gas sites. Comments comments http://everythingshale.com/news/2016/october/12/turtle-bayou-oilfield-cleanup-opens-nature-preserve/ http://everythingshale.com/news/2016/october/12/turtle-bayou-oilfield-cleanup-opens-nature-preserve/ Wed, 12 October 2016 11:03:31 http://everythingshale.com/news/2016/october/12/eia-carbon-emissions-from-power-plants-lowest-since-1991/ The drop comes amidst a long-term shift away from coal to natural gas and ever increasing levels of wind turbines and solar panels across the country’s electrical grid. Also, a particularly mild winter – the warmest since at least 1949, EIA said – meant less need for heating systems and thus less electricity demand. The fall off from the power industry comes as greenhouse gas emissions from cars and trucks ticked up in recent years. According to the Environmental Protection Agency, emissions from the transportation sector rose 2 percent between 2012 and 2014 – the most recent year for which data was available. According to the report from EIA Wednesday, consumption of coal-fired electricity decreased 18 percent from the first half of 2015 to the same period in 2016. Natural gas decreased 1 percent. And renewables, which includes, wind, solar and hydroelectric dams, increased 9 percent. Comments comments http://everythingshale.com/news/2016/october/12/eia-carbon-emissions-from-power-plants-lowest-since-1991/ http://everythingshale.com/news/2016/october/12/eia-carbon-emissions-from-power-plants-lowest-since-1991/ Wed, 12 October 2016 10:12:10 http://everythingshale.com/news/2016/october/12/clinton-s-energy-independence-claim-may-signal-likely-policy-path/ Near the end of Sunday’s contentious and much-maligned presidential debate, Hillary Clinton made, arguably, the most revealing statement yet on the likely path of energy policy in her White House. “We’ve got to remain energy independent,” Clinton said. “It gives us much more power and freedom than to be worried about what goes on in the Middle East. We have enough worries over there without having to worry about that.” Now, the statement may appear almost innocuous at first blush. Every US president since Richard Nixon has spoken on the importance of energy independence, a notion which gained new life both after the September 11, 2001, attacks and amid the US shale oil and gas renaissance. And Clinton’s use of the energy independence political catchphrase was quickly pointed to as one of two factual errors she made in the debate. “US production is up and the share of imports is down, but that’s not the same as being energy-independent,” wrote Politico , which claimed that this and a reference to Donald Trump not apologizing were Clinton’s two “falsehoods” of the debate. (Donald Trump, Politico wrote, had made 13 falsehoods and six misleading claims during the debate). It’s certainly difficult to think of the US being energy independent when it continues to import millions of barrels of foreign, and OPEC-sourced, crude oil. This year, for example, the US is on pace to import an average of 7.85 million b/d of crude oil, including more than 3.15 million b/d of crude from OPEC nations, according to the US Energy Information Administration. US crude imports in July averaged nearly 8.1 million b/d, the most since August 2013, according to EIA. US imports of OPEC crude have fallen from the nearly 5.42 million b/d peak in 2008, but are on pace to average more than 3.15 million b/d this year, up from 2.67 million b/d in 2015. Imports have risen as US crude production has declined, to 8.7 million b/d in July from 9.6 million b/d in April 2015. As a percentage of total crude inputs into US refineries, production reflects a drop to 51% from nearly 60% in April 2015. But if you want to use this as an argument that the US is now less oil dependent you also have to ignore that US refiners have been increasingly exporting refined products, and producers are now able to export crude. Total crude and petroleum products exports hit a record high 5.7 million b/d in May 2016, according to the EIA. That was up from just 694,000 b/d in March 1985, when the US produced 80% of the crude run through its refineries. But was Clinton actually wrong? It depends on how one wants to define energy independence. In his 2011 book “The Quest,” Daniel Yergin wonders if energy independence is even a realistic goal when the US is “deeply enmeshed” in the world economy. “Some argue that the term ‘energy independence’ is misconstrued and should be understood not as ‘virtually import-free’ but rather as ‘not vulnerable’,” Yergin wrote. “Generally, however, it is understood to mean self-sufficiency.” Sam Ori, executive director at the Energy Policy Institute at the University of Chicago, told S&P Global Platts this week that the idea of energy independence has become “kind of a myth.” “Our economy is fully integrated in the global market by nature of the fact that we are such large consumers of fuels like gasoline and diesel, especially in transportation,” Ori said. “The price we pay for those fuels is set in a global market, and those prices are driven by all kinds of factors like geopolitics, supply interruptions, demand in China and so on.” Kevin Book, managing director at ClearView Energy Partners, said that the idea of energy independence may be an antiquated one that can create risks of economic inefficiency. “A 100% molecule-for-molecule supply-demand balance isn’t necessary ideal,” Book said. “Even resource-sufficient countries may export and import to minimize transportation costs and other factor costs.” Book said that when Clinton was talking about energy independence she may have been referring to power generation and home heating, in which the US is nearly independent, but not transportation fuels. In addition, Book said that rather than discussing energy independence, Clinton was likely signaling changes to US energy interdependence, or the changing role of US energy in a global market. “Politicians, including Secretary Clinton, appear much more aware that supply interruptions anywhere in the world can impact oil prices everywhere in the world,” Book said. “Interdependence, however, doesn’t meet the usual definition of independence, which the situation where domestic resources fully satisfy domestic consumption.” So, what if she did not misspeak? What if Clinton’s view is that, even with millions of barrels of foreign crude oil and other petroleum products coming into the US every day, that this nation is, in fact, energy independent? Arguably, this could mean that Clinton believes that her White House will have no obligation to boost US fossil fuel production going forward. Without the need to lower and ultimately end energy imports in a quest for what has long been viewed as the goal of US energy independence, Clinton may be likely to press ahead with regulations which could constrain production on federal lands and in federal waters. If Clinton views the energy independence goal as already achieved then there may be no reason for her to go beyond the status quo nor take any action to boost fossil fuel production. This may best be seen in her potential plans to go further than even the Obama administration has on regulating fracking. In a March debate with Vermont Senator Bernie Sanders, her opponent in the Democratic primary at the time, Clinton outlined three conditions which would cause her to oppose fracking: when a locality or state is against it; if it causes methane release or water contamination; and if operators do not make chemical disclosures. “So by the time we get through all my conditions, I do not think there will be many places in America where fracking will continue to take place,” Clinton said in March. The Clinton campaign this week did not respond to a request for further clarity on Clinton’s remarks. Whether her energy independence comments were an error or a sign of a policy shift to come, we may have to wait until well after next month’s election to find out for sure. The post Clinton’s energy independence claim may signal likely policy path appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/12/clinton-s-energy-independence-claim-may-signal-likely-policy-path/ http://everythingshale.com/news/2016/october/12/clinton-s-energy-independence-claim-may-signal-likely-policy-path/ Wed, 12 October 2016 00:01:47 http://everythingshale.com/news/2016/october/11/clinton-campaign-thought-bernie-sanders-ban-fracking-agenda-too-extreme-unfeasible-for-colorado/ Clinton Team Floated Polis to “Whack Sanders for Taking an Irresponsible Position” on Fracking Citing the climate and economic benefits of fracking, Clinton campaign aides called Bernie Sanders’ ban-fracking agenda “extreme,” “unfeasible” and “irresponsible” according to a trove of leaked emails published this week. These emails focused on Clinton’s primary campaign strategy in Colorado after Bernie released an anti-fracking ad in the state.  What’s pretty clear is that Clinton’s aides recognized that a ban-fracking agenda would not sell with energy-state voters.  From the exchange : “What does that mean? A complete 100% fracking ban. There is no elected dem and I believe no enviro group that takes this position. In fact, such an extreme position threatens the progress of common-sense safety measures like frack fluid disclosure and methane capture/air quality regulations.” “The Denver Post Editorial Board could really smack him for this. This is tricky waters for caucus goers but his language may leave him vulnerable.” Those points were reiterated in what is apparently a draft statement from the Clinton campaign proposed as a response to Sander’s ad: “Bernie’s call for banning all hydraulic fracturing is, extreme, unfeasible and ignores the contribution natural gas has made to our economy and our efforts to reduce carbon pollution.” But curiously, Clinton’s staffers go on to suggest that Boulder Congressman Jared Polis voice opposition to Sanders’ ad. Also from the exchange : “Jared Polis is a regarded as a leader of the regulating fracking team in > CO and his argument is reforms, not a ban.” And later in the email chain from another campaign staffer: “I would prefer an ally (congressman polis and/or LCV) Who have strong bone fides on the environment to whack sander’s for taking an irresponsible position and in doing so, threatening real progress on frack fluid disclosure and air quality regulations. This is yet another promise he can’t keep .” “emphasis added) Of course, Colorado politics observers will know that Congressman Polis would have been very unlikely to take the campaign up on their offer to “whack sanders” given his long-running opposition to fracking in the state. In fact, less than a month before this exchange took place, Polis was openly speculating that he might throw his support behind activists proposing a series of ballot measures that would have effectively banned fracking in the state – a threat he later made good on, financially backing the campaign pushing the initiatives. While the Clinton campaign had clearly done their homework on where Coloradans stand on fracking, they missed the mark when it came to their messenger of choice. But the bottom line is they clearly understood that a ban-fracking agenda doesn’t sell in Colorado. http://everythingshale.com/news/2016/october/11/clinton-campaign-thought-bernie-sanders-ban-fracking-agenda-too-extreme-unfeasible-for-colorado/ http://everythingshale.com/news/2016/october/11/clinton-campaign-thought-bernie-sanders-ban-fracking-agenda-too-extreme-unfeasible-for-colorado/ Tue, 11 October 2016 17:19:39 http://everythingshale.com/news/2016/october/11/as-schneiderman-sued-for-failure-to-disclose-here-are-the-top-five-exxonknew-revelations-from-fioa-d-documents/ Late last week, the Energy & Environment Legal Institute (E&E Legal) was forced to file suit against New York Attorney General Eric Schneiderman after their repeated requests via public records laws for documents related to his #ExxonKnew crusade were refused or ignored. Since previous open records requests have uncovered a number of major developments that Schneiderman and his #ExxonKnew friends would have rather kept secret, we’re left with the important question: what else is Schneiderman trying to hide? While it may take a lawsuit to find out, the fact that his crusade is motivated by politics rather than the practice of the law is so clear that the New York Post wrote that Schneiderman “should just declare he’s running for governor in 2018” and be done with it . The Post continued noting, Schneiderman’s Exxon climate-change probe is just as political. Sunday, The Post cited an e-mail from Ted White, a partner of rich enviro-activist and Exxon foe Tom Steyer, noting the AG sought “a call with Tom regarding support for his race for governor . . . regarding Exxon case.” Was Schneiderman squeezing Steyer for cash for a 2018 bid based on his Exxon probe? Monday, the Daily Caller reported the AG snagged thousands from “monied individuals with ties to lawyers and environmentalists” backing his probe. Major greenie George Soros and his family gave close to $300,000. David Einhorn, another “clean energy” investor, forked over at least $122,300. Considering what’s been revealed in past batches of FIOA’d emails, we’re not surprised that Schneiderman doesn’t want anyone to know what’s been going on behind closed doors. Let’s have a look at the top five revelations that have come from recent records requests: #1. Activists briefed the state AGs ahead of their March 29 th press conference with Al Gore : In April,  Reuters  reported on FIOA’d emails , which revealed that Peter Frumhoff of the Union of Concerned Scientists and activist lawyer Matt Pawa had secretly briefed the attorneys general ahead of their March 29 press conference with Al Gore to announce the Exxon investigation. In  an email  to Lem Srolovic with the New York Attorney General’s office, Vermont Assistant Attorney General Scott Kline expressed concerns about sharing documents related to the meeting, as they could be discoverable to the public via a records requests. Kline said “ our office is okay with refusing to disclose covered documents .” The New York Attorney General’s office then requested a “Common Interest Agreement” be signed to avoid having the public find out about their meetings. #2. NY Attorney General’s Office told activist not to tell a reporter he had attended the meeting: Those same FOIA’d emails also reveal that the New York Attorney General’s office specifically told activists not to reveal that they had attended this meeting with the attorneys general group. On March 30, Pawa sent an  email to Lem Srolovic with the New York Attorney General’s office , as well as Scot Kline in the Vermont Attorney General’s office, explaining that “a WSJ reporter wants to talk to me. I may not even talk to her at all but if I do I obviously will have no comment on anything discussed at the meeting.” Pawa then asked, “What should I say if she asks if I attended? No comment? Let me know.” Srolovic responded that Pawa should effectively stonewall the WSJ reporter. “My ask is if you speak to the reporter,” Srolovic wrote, “to not confirm that you attended or otherwise discuss the event.” #3. AGs drafted Common Interest Agreement to keep correspondence secret: In August, Reuters   broke the news  that a Common Interest Agreement, which had been alluded to in a number of batches of FIOA’d emails, was finally been made public through litigation by E&E Legal. The AGs signed on to this agreement to make sure their correspondence regarding the Exxon investigation was kept secret. After a number of AGs’ offices refused to disclose the actual agreement, it was ultimately obtained through litigation with the District of Columbia. #4. RICO20 professors were working directly with Senator Whitehouse and Rockefeller-funded activist groups : Another batch of emails revealed that after George Mason University (GMU) professors Jagadish Shukla and Edward Maibach – who sent  a letter  in September 2015 with 18 other colleagues to U.S. Attorney General Loretta Lynch and President Obama asking them to explore RICO charges against climate “deniers” and their funders – were coordinating with Senator Whitehouse and his staff on their efforts. After their letter was widely criticized, they went into “full damage-control mode,” seeking communications advice from Climate Nexus, an environmental PR firm funded by the Rockefeller foundations, which are also bankrolling the entire #ExxonKnew campaign. #5. AGs were running far away from Schneiderman’s investigation: Finally, another batch of emails revealed  that many of the AGs in Schneiderman’s climate coalition didn’t want to be associated with his investigations at all. The Virginia AG’s office said it makes them “nervous” to say they are working together and asked Schneiderman’s office to “dial that back one notch.” The Iowa AG’s office called Schneiderman a “wild card” and apparently tried to get out of attending the press conference, but felt they’d have to “ride it through.” Another set of FIOA’d emails  revealed that just a few weeks after the Delaware AGs office agreed to sign on to the Common Interest Agreement, they suddenly pulled out, telling the other AGs that they would no longer be participating: “Our AG has determined that Delaware will not be involved in this worthy effort, and thus will not be signing the common interest agreement.” That’s why this litigation is important: it will ensure that Schneiderman complies with the transparency laws that were implemented to hold public officials accountable. And considering what we know so far, it’s safe to say, there’s a lot more to be revealed. http://everythingshale.com/news/2016/october/11/as-schneiderman-sued-for-failure-to-disclose-here-are-the-top-five-exxonknew-revelations-from-fioa-d-documents/ http://everythingshale.com/news/2016/october/11/as-schneiderman-sued-for-failure-to-disclose-here-are-the-top-five-exxonknew-revelations-from-fioa-d-documents/ Tue, 11 October 2016 16:15:45 http://everythingshale.com/news/2016/october/11/government-uncertainty-hinders-world-class-infrastructure/ Our country has significant infrastructure needs. Here, the focus is on energy, but America's roads, bridges, airports, ports and more all need attention, too. All of them energy and otherwise also need government approval processes that are fair and efficient so that important infrastructure projects can be built in a timely manner. Unfortunately, these principles as well as the rule of law are at risk with the Obama administration's move to halt construction of the Dakota Access Pipeline in South Dakota. The uncertainty the administration injected into the situation is wreaking havoc with workers on a project that's already 60 percent complete. And it could have a chilling effect on all kinds of infrastructure projects in the future. Workers' unions and groups representing contractors, suppliers, equipment distributors and others are weighing in with a letter to President Obama, who throughout his presidency has advocated for more infrastructure construction. The letter, signed by 18 organizations , cited the president's past support for 21 st -century infrastructure and called the Dakota Access intervention unprecedented.†From the letter: Mr. President, this is not how our country should operate. The Dakota Access Pipeline has undergone a rigorous and well established environmental and regulatory review.  It has already invested $2.5 billion in construction capital, employing almost ten thousand highly skilled, highly paid workers.  To arbitrarily preempt that process, as these agencies have done, is not only grossly unfair, it will have a chilling impact on the willingness of developers in all fields to commit time and capital to the construction of the infrastructure our nation so vitally needs.   The above follows another letter to the president this week from five major labor unions the International Brotherhood of Teamsters, the Laborers' International Union of North America, the International Brotherhood of Electrical Workers, the International Union of Operating Engineers and the United Association urging him to let the Dakota Access Pipeline proceed without delay.†The letter points out the project was lawfully permitted, reviewed more than two years by officials in North Dakota, South Dakota, Iowa and Illinois (states crossed by the pipeline) and the U.S. Army Corps of Engineers. The letter notes that the Corps of Engineers held 389 meetings with 55 tribes about the project, and that opponents have not produced evidence that sites of cultural and historic significance would be harmed by construction. From the letter: The precedent created by this extraordinary intervention following the conclusion of the regulatory process is chilling for future investment in necessary U.S. infrastructure from highways and bridges to ports and factories. Our members make careers out of jobs created by projects like Dakota Access, and our jobs depend on the investments of conscientious employers. If companies like Energy Transfer Partners cannot trust that the regulatory process outlined in federal law will be upheld, who will continue to invest in America? The family sustaining jobs and benefits that this project provides are in jeopardy. Sean McGarvey, president of North America's Building Trades Unions, representing 3 million craft professionals in the U.S. and Canada, sounded general alarm about infrastructure permitting and construction during a recent speech at the Center for American Progress (McGarvey's remarks start about three hours into this event video ). McGarvey called infrastructure construction a key driver of economic growth, tying the timely and definitive approval of pipeline and other energy projects to the livelihoods of roughly half his union's members. McGarvey: We should not … try to fashion together a national infrastructure/energy policy one project at a time … We have a saying in the building trades, and it goes like this: All we do is build, build is all we do. … We need certainty and a national plan when it comes to the entire range of our national infrastructure. We need a permitting process that not only ensures rigorous examination and study, but also a definitive end. Project sponsors, contractors and our members cannot be held in limbo indefinitely.†McGarvey specifically addressed the situation with the Dakota Access Pipeline: What our members are experiencing in the heartland of America after an override of a federal court decision that upheld a rigorous, comprehensive, inclusive permitting process simply adds further confusion and uncertainty for all future infrastructure projects, both energy and non-energy related. It's not just the Dakota Access Pipeline that should be a concern for all of us …†McGarvey said infrastructure should have bipartisan support for the good of our economy and for the good of individual Americans: There are many things that we as a nation can and should agree upon. And primary among them, in our view, are the vast socio-economic opportunities that can be created and realized through infrastructure investments, provided that they are structured in a thoughtful, proper manner. Doing so will let us achieve world-class infrastructure and a world-class workforce to boot.†Again, basic fairness, the integrity of official review processes and upholding the rule of law are at stake in the Dakota Access Pipeline case. Moving the goalposts for official review after a project is more than halfway built is unfair, undermines due process and runs counter to the rule of law. And, as McGarvey and others assert, the impacts could be wide and damaging to our country in terms of infrastructure and the economic benefits that derive from it. By Mark Green Originally posted October 5  2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.   http://everythingshale.com/news/2016/october/11/government-uncertainty-hinders-world-class-infrastructure/ http://everythingshale.com/news/2016/october/11/government-uncertainty-hinders-world-class-infrastructure/ Tue, 11 October 2016 13:00:03 http://everythingshale.com/news/2016/october/11/latest-epa-greenhouse-emission-numbers-demonstrate-success-of-methane-standards/ This week sees the release of new figures from the U.S. Greenhouse Gas Emissions Reporting Program (GHGRP), which includes self-reported, large facility-level emissions data for 2015. The good news is that methane pollution from the oil and gas industry is down slightly, thanks to a combination of stronger safeguards starting to take effect, along with a decline in new drilling projects due to an overall market cooling. Operators report that methane pollution from onshore oil and gas production is down about 3.8% in 2015 from 2014.  However, overall greenhouse gas emissions from all reporting segments in the oil and gas sector are only down 1.6%. Sensible methane standards are starting to work Some in industry will undoubtedly point to the new numbers as evidence that new emission rules are unnecessary. In fact, the figures show that sensible safeguards are responsible for much of the progress. For example, the data from 2011-2015, oil and gas companies report a decline in methane emissions from well completions an area the EPA began regulating in 2012. Since October of that year, operators have been required under an early phase of EPA's New Source Performance Standards (NSPS) to either flare (burn off) or capture emissions with Reduced Emissions Completions (RECs), or use green completion†methods that capture and route excess gas back into the system. What we don't learn from the Greehouse Gas Reporting Program numbers It's also important to note that many methane emissions are still unaccounted for in these new figures, which are self-reported by industry, and only include facilities emitting over 25,000 metric tons of CO2 equivalent per year. Only about half of U.S. oil and gas wells are required to report their emissions to the GHGRP. This is unlike the EPA's Greenhouse Gas Inventory , which is an agency-prepared accounting of all man-made greenhouse gasses from across all sectors. Greehouse Gas Reporting Program methods can also underestimate emissions since they often require use of emission factors rather than direct measurements. For example, the Aliso Canyon storage facility in Southern California that sprung a massive, four-month leak last October reported annual emissions of only about 1,400 metric tons of methane, even though official estimates predict the actual amount of pollution during the leak was closer to 100,000 metric tons. This means that the monthly emissions rate during the leak was about 215 times higher than reported. Had Aliso Canyon been included in the GHGRP, it would show emissions were 7% more than reported. We don't know what other catastrophic super-emitter events have gone undetected and underreported. Bottom line: Emissions are still too high EPA's much more comprehensive inventory finds that the oil and gas industry is emitting nearly 10 million tons of methane pollution a year -  34% higher than previously estimated. And a new study , out this week in Science, shows that methane emissions attributable to fossil fuels are at least 20-60% higher than reported. So while we may be making progress addressing emissions, it's clear methane continues to be a huge problem for our public health, economy, and climate. By David Lyon Originally Published on October 7, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/october/11/latest-epa-greenhouse-emission-numbers-demonstrate-success-of-methane-standards/ http://everythingshale.com/news/2016/october/11/latest-epa-greenhouse-emission-numbers-demonstrate-success-of-methane-standards/ Tue, 11 October 2016 09:00:12 http://everythingshale.com/news/2016/october/11/american-steel-cameos-in-us-presidential-candidate-debate/ After Sunday night’s sad and nasty US presidential debate it’s hard to focus on the relatively small exchange the candidates had about American steel. It came towards the end of a brawl that one commentator likened to watching a cobra and a mongoose fighting in a small cage. After a flood of attention-grabbing — and even crotch-grabbing — allegations, the candidates turned their attention to steel. Here’s the exchange: “It’s killing our steel workers and our steel companies,” Donald Trump said about cheap Chinese steel imports. Hillary Clinton: “China is illegally dumping steel in the United States and Donald Trump is buying it to build his buildings, putting American steelworkers and plants out of business.” I half-expected Trump to lean into his microphone, cock his head and retort: “Because I’m smart” — the same thing he said about paying no taxes. It might be instructive then to ponder Trump’s explanation on the tax issue, because of what it might mean for steel. Regarding his taxes, he explained that he was not doing anything illegal, merely using America’s tax laws to his benefit, as any smart businessman, or citizen, would do. He has said that an appalled society can, via the Democratic process, end unfair tax breaks and loopholes. He chided Clinton for not doing so in her 30-plus years of public life, effectively saying, “Stop me, Hillary, before I loss-carry-forward again!” Transferring this thinking to steel and other trade matters would mean that America’s trade laws would have to change via new legislation or more-stringent enforcement of existing laws. And it seems both candidates are on board — good news for America’s steelmakers, but what some in Trump’s party might argue is bad news for America’s steel users. America already has a lot of trade laws, some would say too many. But based on his tax logic, Trump would give us more to “Bring back steel” — a promise he made earlier in his campaign in Pittsburgh. He also said he would renegotiate America’s global trade deals. Although light on specifics, Trump is touting a populist “America first” agenda, effectively pushing even Clinton to the left. She now disavows her earlier support for the Trans-Pacific Partnership. Her solution? The appointment of a “trade prosecutor” to protect US workers from global trade inequities, something she reiterated Sunday when talking about American steel. Now that both parties’ candidates clearly want to put America first — and after a debate that made an entire nation feel icky — something big must be done, regardless of who is elected. That Big Something is a massive infrastructure program, the literal rebuilding of a crumbling America. While absent from Sunday’s shameful debate, infrastructure rebuilding is the single most likely transforming initiative that could have bi-partisan support no matter who is president — an obvious way to bring the country together, and perhaps even restore true patriotism. And, by the way, it would greatly benefit steel. Sunday’s debate — and all the sordid news that led up to it and now follows it — in an odd way brings hope. Politics in America has become so scrambled and bizarre that whoever is elected president will have to reach across the aisle and do whatever it takes to heal the country. And Trump, via his populist success, has made it okay for Republicans to support massive government initiatives when justified. Given the dangerous wear-and-tear of our neglected infrastructure and the lengthy rip in America’s social fabric revealed by Trump’s candidacy, building new roads and bridges has become imperative, both physically and metaphorically. It has been said you can’t spring back to the top — Make America Great Again — until you are able to push off from the bottom. We are at the bottom. The post American steel cameos in US presidential candidate debate appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/11/american-steel-cameos-in-us-presidential-candidate-debate/ http://everythingshale.com/news/2016/october/11/american-steel-cameos-in-us-presidential-candidate-debate/ Tue, 11 October 2016 00:01:01 http://everythingshale.com/news/2016/october/10/as-clinton-deals-huge-debate-blow-to-keep-it-in-the-ground-emails-confirm-russians-funding-phony-anti-fracking-groups/ Keep-It-In-The-Ground activists must have been pretty disappointed last night when presidential candidate Hillary Clinton touted the benefits of U.S. shale development during the second presidential debate . But that was just the beginning. A number of speeches given by Clinton, which were leaked today, confirm what folks have long suspected – that the Russians have been funding what she calls “phony” anti-fracking efforts across the globe. As Clinton put it in a 2014 speech sponsored by tinePublic: “We were up against Russia pushing oligarchs and others to buy media.  We were even up against phony environmental groups, and I’m a big environmentalist, but these were funded by the Russians to stand against any effort, oh that pipeline, that fracking, that whatever will be a problem for you, and a lot of the money supporting that message was coming from Russia.” In another speech, Clinton noted the importance of European natural gas production in order to reduce dependence on Russia. As she said in a 2014 speech at the Palais des Congrès de Montréal, “So how far this aggressiveness goes I think is really up to us. I would like to see us accelerating the development of pipelines from Azerbaijan up into Europe. I would like to see us looking for ways to accelerate the internal domestic production. Poland recently signed a big contract to explore hydraulic fracturing to see what it could produce. Apparently, there is thought to be some good reserves there.  And just really go at this in a self-interested, smart way. The Russians can only intimidate you if you are dependent upon them .” As the Washington Times put it today , “the leaked speeches came as another blow to Mrs. Clinton’s tenuous relationship with environmentalists.” The first blow came last night in the presidential debate when Clinton said , [Y]ou know that we are now for the first time ever energy-independent. We are not dependent upon the Middle East . But the Middle East still controls a lot of the prices. So the price of oil has been way down. And that has had a damaging effect on a lot of the oil companies, right? We are, however, producing a lot of natural gas, which serves as a bridge to more renewable fuels. And I think that’s an important transition . We’ve got to remain energy-independent. It gives us much more power and freedom than to be worried about what goes on in the Middle East. We have enough worries over there without having to worry about that. [emphasis added] Her comments reflect the pro-shale sentiments in other speeches she has given, which were also released today . In a 2013 speech to Goldman Sachs, she called shale development “a gift”: “I mean, the energy revolution in the United States is just a gift, and we’re able to exploit it and use it and it’s going to make us independent.  We can have a North American energy system that will be unbelievably powerful.  If we have enough of it we can be exporting and supporting a lot of our friends and allies.” [emphasis added] In her remarks for Robbins Geller Rudman & Dowd in 2013, she echoed this sentiment, “I’ll make a couple of points, because it’s really an important question.  Number one, because of changes in technology as all of you know , we are now producing more oil and gas than we ever have in our history and we’re on our way to be the number one producer in the world.  Now, that is a tremendous opportunity, as long as we are smart about it.” [emphasis added] She also noted that oil and gas production go hand in hand with renewable energy in a 2013 speech for Deutsche Bank: “So I want to see us become the number one oil and gas producer while we also pursue a clean-energy agenda at the same time. I don’t think it has to be either or. I think it’s a mistake to think it does. I happen to think we are missing a great opportunity by not dealing with climate change, not just because it’s a rolling crisis that we’re dealing with, but also I think there’s a lot of money to be made from pioneering and manufacturing and exporting and creating a global market for how we deal with climate change.” Needless to say, anti-fracking activists have not been pleased. Greenpeace, 350.org and other “Keep-It-In-The-Ground” groups attacked her position throughout the debate, as the below tweets demonstrate:   @greenpeaceusa @HillaryClinton 4 minutes on the biggest issue facing humanity — PT81 (@PT9881) October 10, 2016 Hillary throws the climate base under the bus… and for what? Does she want us to stay home in the coming weeks? — Jason Kowalski (@JasonK350) October 10, 2016 In the wake of the debate, Gasland director Josh Fox ran straight to the UK Guardian – the “Keep-It-In-The-Ground” publication – to engage in an anti-science rant claiming natural gas increases greenhouse gas emissions, even though every credible institution, including the Intergovernmental Panel on Climate Change (IPCC) , says exactly the opposite. Clinton joins the ranks of many Democratic leaders who have called the “Keep-It-In-The-Ground” agenda too extreme — including President Obama, who said just last week about their goals, “We’ve got to live in the real world.” What these emails show is just how far to the fringe anti-fracking activists are – so far, that their work only helps the Russian energy dependence agenda, rather than the cause of American energy security. http://everythingshale.com/news/2016/october/10/as-clinton-deals-huge-debate-blow-to-keep-it-in-the-ground-emails-confirm-russians-funding-phony-anti-fracking-groups/ http://everythingshale.com/news/2016/october/10/as-clinton-deals-huge-debate-blow-to-keep-it-in-the-ground-emails-confirm-russians-funding-phony-anti-fracking-groups/ Mon, 10 October 2016 17:59:26 http://everythingshale.com/news/2016/october/10/bipartisan-pushback-against-villainizing-industry-at-anti-fossil-fuel-conference/ Just when we thought anti-fossil fuel activists couldn’t marginalize themselves any further, former Governors Arnold Schwarzenegger (R-CA) and Bill Ritter (D-CO) – key figures in the climate change movement – pushed back against their extreme rhetoric at the “ After Fossil Fuels: The Next Economy ”  conference, which was held at Oberlin College last weekend.  EID was on the ground at the conference, reporting each day on appearances by 350.org co-founder and #ExxonKnew proponent Bill McKibben and San Francisco billionaire activist Tom Steyer. On the Saturday panel, Steyer said that oil companies “like making hundreds of billions of dollars. They would like to continue doing it and they are going to push back.” But former California Governor Arnold Schwarzenegger disagreed with this demonization of the industry, noting that the climate movement needs to be “inclusive” and should not “villainize the oil companies.” As Schwarzenegger put it , “ And I think the important thing also is to be always inclusive. It doesn’t help if you villainize the oil companies. […] I think the key thing is that you need to bring them in and make them understand that they should diversify with their investments. Not just their investments in oil but to invest in green energy because this will be the energy of the future. And it will be a smart investment for them also. But, just attacking them and just villainizing them alone is not going to bring them in because they will feel they are on the other side and they will fight and all those things. So you can fight them and you can also negotiate with them and I was always in the belief that the more we bring everyone in and the more we make everyone part of the crusade, the more and the faster we can win this crusade.” Former Democratic Colorado Governor Bill Ritter, who has  even been credited  with coining the phrase, “new energy economy,” also talked about the importance of collaboration with the energy industry, saying he has a big difference of opinion with McKibben, who also spoke at the conference. As Ritter said , “ So it is really interesting to have been here for the last few days, or couple days and especially to have heard the presentation last night by Bill McKibben and some of the presentations made this morning because I would say that I do come at this from a bit of a different orientation [ …] I’ve chosen this place of policy,  and it’s interesting to think about Bill McKibben’s remarks last night  and what I call empowering toward the need for speed and to being dedicated to trying to change things through the policy lens. It’s a difficult, difficult thing to do. I hosted a seminar at Colorado State University last week, we had a former chief economist from BP, Christof Rühl, who was part of it  because we believe in never having echo-chambers  to try and get people of diverse thought to really have the hard discussions.” Therefore it’s no surprise that Bill McKibben kicked off the conference telling the audience that his anti-fossil fuel agenda was “not completely popular” with Hillary Clinton’s campaign. As he said , “If Hillary Clinton wins the White House the democratic platform, which thanks to Bernie, I got to help write, he got to name five of the fifteen platform writers and by hanging tough, he made sure that a lot of what we wanted managed to make its way in. Well one of the things that’s in there is a promise that there will be an emergency climate summit within the first 100 days of the new administration  with an eye toward a mobilization like World War II to get us going.  I will tell you that this was not completely popular with the people who were negotiating for the Clinton team, but they went along with it and I’m sure they will hold it .” The “Keep-It-In-The-Ground,” #ExxonKnew movement is so extreme that even at their own conferences, climate change leaders such as Governors Schwarzenegger and Ritter have had to push back. As President Obama put it about their anti-fossil fuel goals in an interview  with Leonardo DiCaprio, “ we’ve got to live in the real world ” – clearly these activists don’t. http://everythingshale.com/news/2016/october/10/bipartisan-pushback-against-villainizing-industry-at-anti-fossil-fuel-conference/ http://everythingshale.com/news/2016/october/10/bipartisan-pushback-against-villainizing-industry-at-anti-fossil-fuel-conference/ Mon, 10 October 2016 15:31:35 http://everythingshale.com/news/2016/october/10/white-house-touts-shale-gas-revolution-s-role-in-reviving-us-manufacturing/ EID has highlighted many times how cheap and abundant natural gas — made possible by hydraulic fracturing — has brought manufacturing back to life in America . And to celebrate Manufacturing Day last Friday, the White House National Economic Council released a report entitled “Revitalizing American Manufacturing” that further illustrates how the shale boom has been instrumental to lifting the U.S. out of the depths of the Great Recession. The report notes that since early 2010, U.S. manufacturing has added over 800,000 direct jobs. This is a remarkable reversal of fortunes, considering the manufacturing sector lost 5.7 million jobs — roughly one-third of all manufacturing workers — from 2000 to 2009, a higher share of jobs lost than during the Great Depression, proving particularly invigorating to traditional manufacturing hubs such as the Appalachian Basin , the Ohio Valley and Texas . So considering one fifth of manufacturing is energy intensive — including plastics , fertilizers , chemicals , and steel manufacturing — its not surprising the report credits record low natural gas prices and production for turning things around. “The surge in American natural gas production has lowered energy costs for manufacturers and driven job growth… Recent analysis estimates that industrial sector consumers of natural gas were better off by about $22 billion between 2007 and 2013 due to abundant, inexpensive shale gas. That is an important part of why companies have announced tens of billions in new capital commitments in energy-intensive manufacturing facilities that will come on line in the years ahead.” The U.S. chemical industry alone has invested $164 billion in shale gas projects, which are the direct result of shale gas production increasing 155 percent since 2010, while overall U.S. natural gas production has increased 27 percent . Thanks to this remarkable production, natural gas prices have remained well below $4 mcf since November 2014. This combination has boosted American chemical exports , sparked reinvestment in the United States and created booms within the plastic and fertilizer industries . The report fully acknowledges these remarkable trends. “Once poised to be a major natural gas importer, the United States is now the number one natural gas producer in the world… “Since the Great Recession, manufacturing has grown at nearly twice the pace of the economy overall, marking the longest period where manufacturing has outpaced U.S. economic output in 50 years… the job gains between 2010 and early 2014 are about 500,000 above and beyond what would be associated with the historical cyclical pattern.” The report also notes that because fracking is driving down energy costs considerably for businesses , the U.S. is not only competitive with other countries — we actually have a competitive advantage. U.S. natural gas prices are half of Europe’s and one third of Asia’s, according to the report. “… U.S. direct manufacturing production costs compare favorably to other advanced economies, particularly due to the high productivity of American workers and the low energy costs as a result of abundant natural gas. According to The Boston Consulting Group, the U.S. relative costs of production in 2014 were within 5 percent of those of China and substantially less than countries like Japan, Canada, Brazil, France, and Germany.” Another recent report finds that U.S. manufacturing could actually be cheaper than China by 2018 thanks to natural gas. These trends are all-the-more relevant to the average American because, as the report notes, as U.S. manufacturing, so goes America. “A strong manufacturing sector is vital to America’s economic progress because it is inextricably linked to our country’s ability to innovate. Despite representing only 12 percent of U.S. GDP, manufacturing accounts for roughly 75 percent of private sector research and development, 60 percent of all U.S.” President Obama has long credited shale development for driving down energy costs and spurring, in turn, a manufacturing renaissance in the United States that is creating jobs and growing our economy. As he said in November 2014: “When I travel to Asia or I travel to Europe, their biggest envy is the American, homegrown, U.S. energy production that is producing jobs and attracting manufacturing because locating here means you’ve got lower energy costs .” [Emphasis added.] President Obama has also said : “Meanwhile, our 100-year supply of natural gas is a big factor in drawing jobs back to our shores. Many are in manufacturing — the quintessential middle-class job.” So if you’ve noticed more and more “Made in America” labels lately, keep in mind it was made possible by the U.S. shale revolution. http://everythingshale.com/news/2016/october/10/white-house-touts-shale-gas-revolution-s-role-in-reviving-us-manufacturing/ http://everythingshale.com/news/2016/october/10/white-house-touts-shale-gas-revolution-s-role-in-reviving-us-manufacturing/ Mon, 10 October 2016 09:50:34 http://everythingshale.com/news/2016/october/10/what-does-google-home-mean-for-nest/ As Google takes on Amazon's Alexa, Nest can no longer lay claim to Google's smart home ecosystem. Google debuted its new connected home device on Tuesday — aptly called Google Home — to compete directly with Amazon's voice-activated speaker Alexa. Google also unveiled another key piece of its connected home strategy, a mesh router simply named Google Wi-Fi . The two pieces of hardware will be the cornerstone of Google's push into home controls. So where does that leave Nest? If recent activity (or lack thereof) is any indication, Nest will be just another piece of hardware in the ecosystem. There was a time when it seemed as though Nest was going to be central to Google's approach to the connected home . In 2013, Nest suggested the device would act as a connected home hub, and its Works With Nest developer program would have an ecosystem of products that would respond based on the status of the thermostat. The vision is still there. Nest does have a robust developer program, with more than 10,000 developer partners integrating products and services on the platform including Rachio, Lutron, Xfinity Home, Whirlpool and Stringify. But Google Home's website suggests the vision is no longer one owned by Nest within Alphabet: “Google Home connects seamlessly with smart devices like Chromecast, Nest and Philips Hue, so you can use your voice to set the perfect temperature or turn down the lights,” reads the site. In the near term, it is certainly not an either-or proposition. Nest can continue to have a developer network for those who choose to integrate products through the thermostat, and Google will add to its own network of devices supported by Google Home. For example, both Nest and Google Home work with the popular automation software IFTTT, as does Amazon Alexa. Nest also works with Alexa. Makers of individual devices do not want to box themselves into a corner at this early stage in the growing market, so most integrate with different platforms. Essentially it's a wide variety of ecosystems,†said Honeywell Connected Home design director Ted Booth. His company is integrating its Wi-Fi thermostats with connected home platforms since customers are still experimenting with lots of different software to control devices in the home. However, with Google and Amazon competing directly via voice-activated speakers, there is vast potential for a push toward these two platforms in coming years. (Apple will need to step up its game beyond HomeKit .) Since many people already interact daily with Amazon, Google and Apple, there’s tremendous pull toward those companies. For key products, integration will be essential. Earlier this year, Amazon Alexa Fund made its  largest investment to date  in smart thermostat company ecobee, which will create a tighter integration between ecobee and Alexa. Few people will buy Alexa or Google Home thinking about a fully connected home, and it’s even less likely that they’ll be thinking about upfront energy savings. They'll buy it so they can play music, or ask it for weather forecasts, or control disparate devices. Early adopters of Nest bought the thermostat because it was the best looking one they'd ever seen — and it could be controlled from their phone. People did not buy it hoping it would someday open their garage door. Nor were they looking for a  deeper relationship with their utility . But that’s what many eventually got. When Nest founder Tony Fadell left the company in June , he said in a statement the company had grown into much more than a thermostat company. We've created a hardware + software + services ecosystem,†he wrote in a blog post, which is still in the early growth stage and will continue to evolve to move further into the mainstream over the coming years.†What that means for Nest is still unclear. For now, it might mean tighter integration with Google Home, rather than being an ecosystem unto itself. By Katherine Tweed Originally published on Greentech Media October 5, 2016 http://everythingshale.com/news/2016/october/10/what-does-google-home-mean-for-nest/ http://everythingshale.com/news/2016/october/10/what-does-google-home-mean-for-nest/ Mon, 10 October 2016 09:00:04 http://everythingshale.com/news/2016/october/09/first-nations-flex-muscles-in-us-canada-pipeline-debate-fuel-for-thought/ First Nations tribes in Canada and the US have started flexing their muscles, successfully delaying pipeline projects on both sides of the border. Indications are that this effort is becoming more organized and may play a larger role in infrastructure decisions across the continent. Tribal action is behind the delays encountered by Energy Transfer Partners’ Dakota Access Pipeline in North Dakota. Tribes are demanding more consultation and, in some cases, opposing expansion of energy infrastructure altogether. That effort reached a new level in late September, when First Nations and tribal chiefs gathered simultaneously at Musqueam in Vancouver and Mohawk in Montreal to sign a new continent-wide treaty and form an alliance committing nearly 50 other bands in Canada and the US to stop all proposed oil sands pipeline, tanker and rail projects in their territorial lands and waters. “What this treaty means is that from Quebec, we will work with our First Nation allies in BC [British Columbia] to make sure that the Kinder Morgan Trans Mountain pipeline does not pass and we will also work with our tribal allies in Minnesota as they take on Enbridge’s Line 3 expansion, and we know they’ll help us do the same against Energy East,” Kanesatake Grand Chief Serge Simon said in a statement. The collective stance will have a major impact on the Liberal Party government, which was voted into power last November on the promise of granting a larger say for stakeholders and particularly First Nation bands in British Columbia in any oil pipeline approval and building process. “This whole issue in relative. They have always been bold and we will see that happening in the future,” Chris Bloomer, president of the  Canadian Energy Pipelines Association, told Platts. “Compared with the previous Conservative Party government, First Nations feel they have an ally in the Liberals now and feel their voices will be heard more clearly.” Canadian projects in doubt Building new crude oil pipelines and the relentless debates about such pursuits have in the past several years proved to be a comprehensively futile exercise in Canada. In fact, there is little public memory of when an export pipeline was last built from land-locked Alberta—the nerve center of Canada’s oil production. The debate is raging once again, and will have long-term implications for the future of Western Canada’s ailing oil industry, including the  potential of barrels being left in the ground, Canadian pipeline companies increasing their investments in Mexico and the US rather than on their home turf and lastly for the country to lose its market share over the medium to longer term. In the shorter term, Enbridge is working diligently to provide an additional 60,000 b/d to 80,000 b/d of additional capacity on its Mainline through a combination of debottlenecking and installing high-pressure pumps. But come 2020 and with some 700,000 b/d of new production capacity being started up, crunch time will inevitably dawn on producers. With a second-quarter throughput of 2.2 million b/d, the 2,366-mile Mainline system that runs from Edmonton, Alberta to Illinois in the US Midcontinent, is a prime source of pipeline takeaway capacity for producers in Alberta and Saskatchewan that have a combined output of just over 3 million b/d. Four new pipeline projects have been mounted on the drawing board in the past decade with a targeted in service date of 2018/19. Starting off with the 525,000 b/d Northern Gateway that already received regulatory approval, the others are the 1.1 million b/d Energy East, the 590,000 b/d expansion of the Trans Mountain pipeline and the 830,000 b/d Keystone XL system. All the pipelines have not only missed their targeted timeline for start up, but it is still anybody’s guess when the first line pipe will be laid underground. The Northern Gateway pipeline is also in a limbo, as a decision was due by September 22 from Ottawa after a Federal Court of Appeal this summer overturned an NEB approval granted in late 2013 to Enbridge to build the pipeline. The court’s objection was primarily focused on the lack of stakeholder consultations. Without a pipeline breakthrough, Western Canadian production could be capped at about 4.4 million b/d. In the US, further Bakken crude production is at risk if Dakota Access doesn’t come to fruition. Since the pan-continental movement is just getting underway, and collecting additional allies, producers could have difficulty making longer term plans. The post First Nations flex muscles in US, Canada pipeline debate: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/09/first-nations-flex-muscles-in-us-canada-pipeline-debate-fuel-for-thought/ http://everythingshale.com/news/2016/october/09/first-nations-flex-muscles-in-us-canada-pipeline-debate-fuel-for-thought/ Sun, 09 October 2016 23:01:50 http://everythingshale.com/news/2016/october/07/former-co-gov-bill-ritter-pushes-back-against-mckibben-s-extreme-keep-it-in-the-ground-agenda/ Former Colorado governor Bill Ritter, a Democrat, spoke today at the “ After Fossil Fuels: The Next Economy ”  conference taking place at Oberlin College in Ohio on a panel covering “Climate Leadership.” But in a sharp contrast to remarks by 350.org co-founder and “Keep-It-In-The-Ground” leader Bill McKibben, Ritter talked about the importance of collaboration on energy issues. From Ritter’s remarks : “ So it is really interesting to have been here for the last few days, or couple days and especially to have heard the presentation last night by Bill McKibben and some of the presentations made this morning because I would say that I do come at this from a bit of a different orientation . I am a lawyer by training, I was a prosecutor for twenty years, was the elected DA in Denver and was not a person who had really involved myself in climate and energy things in a really big way until I decided to become a candidate for governor in Colorado. “(3:18-3:18:43) Ritter went on: “I’ve chosen this place of policy, and it’s interesting to think about Bill McKibben’s remarks last night and what I call empowering toward the need for speed and to being dedicated to trying to change things through the policy lens. It’s a difficult, difficult thing to do. I hosted a seminar at Colorado State University last week, we had a former chief economist from BP, Christof Rühl, who was part of it because we believe in never having echo-chambers to try and get people of diverse thought to really have the hard discussions.” (3:19-3:20) Ritter’s comments offered a dramatic departure for a conference that has been dominated by an extreme fringe anti-fossil fuel agenda pushed by activists like McKibben and San Francisco billionaire Tom Steyer, who is scheduled to address the conference later this evening. In fact, McKibben’s agenda is so extreme that – as he admitted – it’s not been very popular with President Obama or presidential candidate Hillary Clinton. As McKibben told the audience : “If Hillary Clinton wins the White House the democratic platform, which thanks to Bernie, I got to help write, he got to name five of the fifteen platform writers and by hanging tough, he made sure that a lot of what we wanted managed to make its way in. Well one of the things that’s in there is a promise that there will be an emergency climate summit within the first 100 days of the new administration  with an eye toward a mobilization like World War II to get us going. I will tell you that this was not completely popular with the people who were negotiating for the Clinton team, but they went along with it and I’m sure they will hold it . And if they do if there are scientists gathered in the White house to discuss this, we will need hundreds of thousands of people out in the street and you are going to need to get on buses and trains and get from Ohio to D.C . for that day .” Ritter’s comments come a day after Colorado’s current governor John Hickenlooper (D) told a gathering of environmental law attorneys in Denver that he hoped the next administration would set a “new tone” with regard to energy issues. As E&E News reports : “There has to be a better way,” he said. “There has to be a way for Republicans and Democrats to come together to reach an agreement on certain important public policies.” Unlike the fringe “Keep It In The Ground” narrative that has dominated the talks at the conference, Ritter, like Hickenlooper supports domestic energy production and has acknowledged that natural gas is an important element of a clean energy future. As Ritter recently said , “If you passed a national ban, this industry would go away and it would be harder for us to get to our place of transition on clean energy and climate .” (emphasis added) Fortunately, speakers like former governor Ritter have offered balance and perspective on what has been a Colorado success story when it comes to domestic energy development.  Despite the extreme rhetoric coming from McKibben, there are many more elected officials like Ritter and Hickenlooper who are joining with statewide groups, local stakeholders and even some of our nation’s most prominent Democrats to speak out in opposition to this radical and misguided campaign. http://everythingshale.com/news/2016/october/07/former-co-gov-bill-ritter-pushes-back-against-mckibben-s-extreme-keep-it-in-the-ground-agenda/ http://everythingshale.com/news/2016/october/07/former-co-gov-bill-ritter-pushes-back-against-mckibben-s-extreme-keep-it-in-the-ground-agenda/ Fri, 07 October 2016 15:37:07 http://everythingshale.com/news/2016/october/07/us-mission-at-the-ief-promote-transparency-and-innovation-in-energy-markets/ The US is the world’s largest consumer of oil, as well as one of its largest producers, making it uniquely positioned at the recent International Energy Forum in Algiers. The forum’s intent is to bring together oil producers and consumers every three years for two days of dialogue, analysis of energy trends, and promotion of greater transparency in energy markets. This year’s forum was overshadowed by the OPEC meeting on the sidelines. Though the US is not a member nor is its oil industry state-controlled, the producer group’s decisions still resonate there, making the US’ representative at the IEF, Assistant Energy Secretary Jonathan Elkind, a keen observer of the proceedings. The message he had for OPEC: transparency is good, market controls are not. “We come back time and again to the point that artificial intrusions into the market, whether one is talking about production or price constraints, they don’t work,” Elkind said in an interview. “What does work is respecting that markets are meant to be flexible, they’re meant to be dynamic. They’re not meant to be stable, though everybody has a stake in good information that helps to tamp down volatility.” Of course, OPEC would eventually decide in Algiers to freeze production between 32.5 million to 33 million b/d, with the full details – including individual country allocations – to be decided at the organization’s next formal meeting November 30 in Vienna. That’s a cut of between 240,000 to 740,000 b/d from OPEC’s current production levels. Some American oil industry officials, such as Continental Resources CEO Harold Hamm, who is advising Republican presidential contender Donald Trump, have openly urged OPEC to freeze output, as such action is likely to put a floor under prices and help boost US shale drillers. Indeed, the response of the US shale industry, whose boom prompted OPEC two years ago to adopt its market share strategy that it has now apparently abandoned, will be key to OPEC’s decision making in Vienna. Algerian oil minister Noureddine Bouterfa was quoted October 6 as saying OPEC could decide to cut further, if market conditions warrant. The US Energy Information Administration last month projected that 2017 crude production in the US will be 8.5 million b/d, which is 200,000 b/d higher than its August forecast for next year. “Shale has dramatically changed the kind of strategy that OPEC was employing,” Adam Sieminski said in an interview with S&P Global Platts’ Takeo Kumagai . “OPEC will be looking at our production statistics and if they saw US production beginning to recover, would make difference to what they were doing.” In Algiers, Elkind maintained a neutral stance at the IEF. Low prices, after all, are good for consumers, and the US has a lot of those. “Fundamentally the core answer here is that we are a believer in markets,” he said. “We believe in the power of markets that are well informed to provide signals to investors and consumers. At the household level, at the company level, markets will provide the guideposts that tell participants whether there is scarcity or abundance. We think that’s the right way to think about the oil markets today.” Most of his discussions with his ministerial counterparts involved promoting market data transparency through the Joint Organizations Data Initiative. He said he also discussed energy innovation and how governments can get involved in fostering their own energy industries, whether in renewables or traditional fossil fuels. Elkind noted that the US Department of Energy’s investments in fracking and horizontal drilling research during the 1980s and 1990s were key in helping those techniques reach commercial scale, unlocking the US’ vast reserves of shale oil and gas. “It’s fundamentally all about enabling and enhancing energy security in a form that is affordable and accessible,” he said. “The sweet spot in IEF is in providing information that allows producers and consumers to think about the market ahead.” Find out more in the OPEC Guide and OPEC crude oil output table . The post US mission at the IEF: Promote transparency and innovation in energy markets appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/07/us-mission-at-the-ief-promote-transparency-and-innovation-in-energy-markets/ http://everythingshale.com/news/2016/october/07/us-mission-at-the-ief-promote-transparency-and-innovation-in-energy-markets/ Fri, 07 October 2016 11:00:56 http://everythingshale.com/news/2016/october/07/finding-industry-fingerprints-on-atmospheric-methane/ We've all seen TV detectives dust a scene for fingerprints. In a study i n the journal Nature , a team of scientists did something similar, using carbon isotopes to identify the fingerprints†of methane one of the world's most powerful climate pollutants in the atmosphere. The study examined the isotopic signature from two types of methane emissions: biogenic (sources like wetlands, landfills and agriculture) and thermogenic (encompassing geologic seepage, activities associated with the oil and gas supply chain or coal mines). The evidence suggests that not only are we significantly underestimating the share global methane emissions from thermogenic sources, we're also underestimating how much comes from the production, delivery and use of oil and gas and the production of coal. According to the study: After accounting for geological seepage, emissions attributable directly to the global fossil-fuel industry (natural gas, oil and coal production) are 2060% higher than in current global inventories.” The findings mirror results of many of the studies of methane emissions from the natural gas supply chain coordinated by EDF, which also found that overall levels of methane coming from U.S. oil and gas production and delivery infrastructure were higher than previously thought. In one of those analyses which included the use of diverse types of measurements emissions were nearly double what the Environmental Protection Agency had previously estimated. It provided some the critical information leading to the agency's recent 34% upward revision of oil and gas methane emissions.. This latest research published earlier this week indicated that we have also been consistently underestimating oil and gas methane emissions on a global scale as well. This research also adds an important data set to an ongoing scientific debate on the causes of the almost decade-long increase in atmospheric methane concentrations.  Resolving the competing explanations for this increase will take some time, but this debate in no way diminishes the importance of taking action now to reduce anthropogenic emissions so we can begin to slow the rate of warming. Rising Tide of Production Offsets Gain from Better Management The good news is, the study estimates that over the past 30 years, global emissions from the oil and gas industry have fallen from 8% of production to about 2% thanks to better practices and improved technology. But those gains have been overwhelmed as production has soared. Natural gas industry improvements associated with management practices, technology, and replacement of older equipment have been credited for reducing CH4 leakage in the past. The global observations used in our study confirm this trend, but the industry improvements have been offset by increased NG production.†The authors of the latest study concur with our earlier results, indicating that policies are needed to keep the trend in emissions moving downward on a worldwide basis.  While the data suggests that the proportion of natural gas lost to the atmosphere has gone down, it is still far higher than is required to reduce the rate of global warming, let alone stop it.  The good news is cost-effective technologies are available that can continue to reduce methane emissions from the natural gas supply chain . Opportunities to Act Scientists are shining a bright light on a powerful climate pollutant during a time when nations across the globe are taking action on climate. Earlier this week the European parliament approved the Paris Climate Deal, which brought the Paris agreement into force, a critical step toward effectively addressing climate change. Because methane is the second largest contributor to global warming, for any effort to combat climate change to be effective it must include reductions in methane emissions. Let's be clear, oil and gas industry's methane fingerprints aren't the only ones causing global warming. But those emissions deserve attention not only because they are significant but because they are among the easiest to reduce. Mounting scientific evidence this study included makes it clear that we have the data to support action to reduce oil and gas methane emissions, and we have the technologies to make significant emission reductions happen now. By Steven Hamburg Originally Published on October 7, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/october/07/finding-industry-fingerprints-on-atmospheric-methane/ http://everythingshale.com/news/2016/october/07/finding-industry-fingerprints-on-atmospheric-methane/ Fri, 07 October 2016 10:12:36 http://everythingshale.com/news/2016/october/06/turkey-s-rewarming-ties-with-iran/ The two countries appear to be compartmentalizing their shared and divergent interests in Syria and Iraq, but such an approach is highly vulnerable to unexpected military incidents and other factors. Turkish and Iranian officials have conducted a number of high-level bilateral visits recently, suggesting that the two countries are drawing closer after a period of serious disagreements over Iraq and Syria. What is driving this rewarming, and how sustainable is it? FROM THE AKP TO THE ARAB SPRING Turkish-Iranian ties blossomed in the last decade under the Justice and Development Party (AKP) government. Whereas previous, secular-based Turkish governments took a dim view of Iran, the Islamist-rooted AKP sought to build the relationship after coming to power in 2002. High-level visits and trade deals ensued, and by 2010, the United States was urging Ankara to help mediate an abortive nuclear deal with Iran called the “Tehran Agreement.” When Washington later found that deal unsatisfactory, Turkey voted against the subsequent U.S.-sponsored resolution at the UN Security Council that increased sanctions on Iran. Yet relations between Ankara and Tehran began to deteriorate when the Arab Spring uprisings broke out in 2011. They were particularly at odds over Syria’s civil war — Turkey threw its lot behind the rebels, whereas Iran stood fast with Bashar al-Assad’s regime, its long-time client. As a result, they became locked in a proxy war, with Ankara arming and sheltering the rebels, Tehran funding Assad’s military and sending forces to fight on his behalf, and both countries issuing fierce public criticisms of each other’s stance in Syria. Differences have also arisen over Iraq, where Turkey’s warm ties with the Kurdistan Regional Government (KRG) have angered the Shiite-led government in Baghdad and its ally in Tehran. Moreover, Iraq has taken issue with Turkey’s encroachment into the country’s Sunni Arab northern region. Most recently, Baghdad — with Iran’s backing — asked Turkey to evacuate the Bashiqa base near Mosul where Ankara has built a military presence in recent years. EASING THE TENSION In the past few weeks, Ankara and Tehran have signaled that are trying to set aside their differences. Turkish foreign minister Mevlut Cavusoglu traveled to Tehran on August 18 after his Iranian counterpart Mohammad Javad Zarif visited Ankara on August 12. The main reason for this rewarming seems to be Syria. The August 24 Turkish incursion into Syria — which occurred with Russia’s tacit blessing and direct, if limited, U.S. military support — is a telling development in the relationship. It shows that the war is evolving into many mini-conflicts in which opponents on one front (Turkey vs. Russia in Aleppo) can cooperate on another front (Jarabulus). It also shows that actors are preparing for the “day after” the Islamic State (IS) and shifting their priorities accordingly. For instance, Turkey no longer seems completely preoccupied with ousting Assad. Instead, by brokering a tacit peace with Russia and, implicitly, Iran, Ankara is preemptively acting to take areas that would otherwise be captured by the Democratic Union Party (PYD), the Kurdish group that has seized much of the northern border region and would be one of Turkey’s chief adversaries in a post-IS Syria. To be sure, President Recep Tayyip Erdogan and his top Foreign Ministry officials have continued to speak out against Assad since last month’s incursion, raising questions about whether Turkey can truly abandon its policy of ousting him. Yet Ankara is cognizant of the fact that the current regime — and maybe even Assad himself — will likely survive for some time, so lately it has asked its proxies in Syria to focus more on efforts to block PYD advances. In short, the thaw with Iran does not appear to be a strategic shift, nor should it be interpreted as a sign that Turkey intends to leave NATO down the road. Ankara will continue to disagree with Iran’s main goals in Syria. For its part, Tehran sees the thaw as an opportunity to curry favor with Ankara and dampen Turkish objections to the Assad regime’s survival. Iranian leaders may even have asked Assad to order the recent Syrian military bombing of PYD positions in Hasaka province as a way of winning over Ankara. THE ECONOMIC FRONT Prior to the recent military and diplomatic cooperation, the pressure of facing two powerful adversaries in Syria spurred Turkey to extend an economic olive branch to Tehran. This helped Iran find relief from international sanctions, and Tehran reciprocated by inviting Turkish businesses into the Islamic Republic. Efforts to integrate their markets have been particularly robust this year. On February 29, Tehran held the first Iran-Turkey Capital Markets Forum to facilitate the dual listing of companies on each country’s stock exchange. On March 5, then-prime minister Ahmet Davutoglu called for removing bureaucratic trade impediments to take advantage of their complementary economies and geographies, arguing that this could help triple annual trade from $9 billion to $30 billion. And on April 9, the Iranian and Turkish Chambers of Commerce signed three documents to strengthen economic cooperation and banking relations following the twenty-fifth session of the Joint Economic Commission in Ankara. Improved economic relations with Iran could also open possibilities with Baghdad. Turkey is deeply anchored in the increasingly independent KRG, but a closer relationship with the central government and its more than three million barrels per day in oil exports could bring additional diplomatic, energy, and trade benefits. FUTURE COMPARTMENTALIZATION AND RISKS? Given this assortment of shared and divergent interests, Turkey and Iran will likely decide to compartmentalize their relations on different fronts. For instance, while they will continue to disagree on some aspects of Syria policy (e.g., Assad’s future and the battle for Aleppo), they would both object to any scenario involving Syrian Kurdish autonomy or independence. On the economic front, their relations will continue to boom. And in Iraq, they will likely settle on a political condominium over the Kurds, with Ankara wielding influence over one of the KRG’s two main rival factions (the Kurdistan Democratic Party) and Tehran maintaining hegemony over the other (the Patriotic Union of Kurdistan). Yet the course of Turkish-Russian relations has shown that any such compartmentalization approach is wrought with potential pitfalls. Up until late last year, Ankara and Moscow were able to develop deep trade and energy links even while disagreeing on Syria. In November, however, Turkey shot down a Russian jet that briefly entered its airspace, prompting the Kremlin to sever nearly all of those links and even impose bilateral sanctions in January. Similar problems could arise with Iran should the two countries’ military personnel or proxies accidentally clash in Syria. Other challenges lie in the ongoing negotiations for a peace settlement in Syria. If a deal is reached that preserves the Assad regime, Turkey’s long-term instinct would be to not fully abide by its terms. Instead, Ankara would likely offer public support for the deal while continuing to arm anti-Assad rebels, thereby angering Tehran and Moscow. Erdogan would find it difficult to completely end Turkey’s support to non-IS fighters in Syria while at the same time helping the United States fight IS — after all, he and other AKP elites identify as political Islamists and believe that supporting Islamist rebels is the right course. Accordingly, unless Washington convinces the Syrian opposition’s Saudi and Qatari backers to cut financial support and fully acquiesce to a peace deal, Turkey would likely continue funneling some weapons and money to rebel groups, including extremist factions. Saudi Arabia would take a dim view of a U.S.-Russian deal in Syria, seeing it as handing the country over to Iranian/Shiite control. Yet even if Riyadh were to come on board with such a deal, some portions of the amorphous Saudi elite would likely reject it and continue helping the rebels, mainly via Turkey. In the long term, this seems like the biggest threat to Turkish-Iranian ties under a compartmentalization scenario. CONCLUSION Turkey is wary of the Iranians and their regional aims, but it also wants to pursue a pragmatic relationship because of the need for economic cooperation, particularly on energy. Speaking at the UN General Assembly earlier this month, Erdogan called for a safe haven in northern Syria spanning some 5,000 square kilometers — much larger than the nearly 1,000 square kilometers of border territory currently controlled by Turkey and its rebel proxies. This suggests that Ankara will be the non-IS opposition’s main sponsor in the north going forward. Iran and Russia may be willing to live with such a zone, but that would be a considerable climb-down from Assad’s pledge to retake the entire country. In the short term, the sustainability of Turkey and Iran’s rewarmed ties will depend on the extent to which they can avoid a scenario similar to the November shootdown incident with Russia. It will also depend on whether Ankara can withstand Saudi pressure to boost support for anti-Assad jihadists. Soner Cagaptay is the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute. Originally Posted on September 29, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/october/06/turkey-s-rewarming-ties-with-iran/ http://everythingshale.com/news/2016/october/06/turkey-s-rewarming-ties-with-iran/ Thu, 06 October 2016 09:00:16 http://everythingshale.com/news/2016/october/06/shpe-conference-2016-build-your-future/ Read more http://everythingshale.com/news/2016/october/06/shpe-conference-2016-build-your-future/ http://everythingshale.com/news/2016/october/06/shpe-conference-2016-build-your-future/ Thu, 06 October 2016 00:01:01 http://everythingshale.com/news/2016/october/05/forecasts-predict-increase-in-cold-weather-and-fuel-usage/ The United States is sitting pretty with an abundant supply of crude oil and low prices at the pump. And after last winter’s above average temperatures, the inventory of heating oil for the East Coast, which includes the world’s largest concentration of home heating oil customers in the Northeast, are hovering at six-year highs and are still building.  However, do long-range forecasts predict the supply surplus will continue to grow? Expectations are set for a weak La Niña and weak Solar Cycle. This will result in reduced snow in southern regions and increased snow in the north this year. “In essence it was a very warm winter last year due to a strong El Niño. This year will be closer to normal for temperatures in the Northeast,” according to Schneider Electric’s Jeff Johnson “It may be near to slightly warmer right along the East Coast, while more interior areas of New York and Pennsylvania could end up slightly colder than average.” “With colder temperatures and more snow predicted for the Northeast, the supply of home heating oil will decrease as demand increases, said Brian Milne, energy editor at Schneider Electric.  “While I don’t believe the current supply will be depleted, fuel usage will be much greater than in the past few years. Colder than normal temperatures will begin early November and grow in persistence and intensity. It can then be predicted that home heating fuel usage will increase. Low demand and surplus fuel—a problem producers faced last year—will not continue.   The post Forecasts Predict Increase in Cold Weather and Fuel Usage appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/05/forecasts-predict-increase-in-cold-weather-and-fuel-usage/ http://everythingshale.com/news/2016/october/05/forecasts-predict-increase-in-cold-weather-and-fuel-usage/ Wed, 05 October 2016 14:59:04 http://everythingshale.com/news/2016/october/05/what-good-is-the-eiffel-tower-in-the-middle-of-your-refinery/ One of the best ways to make sure the design of your refinery is going to look and perform the way you think it should is to perform front end engineering design (FEED) dynamic simulation studies.  This truly necessary phase of simulation modeling may save you from building a flare taller than the Eiffel Tower in the middle of your refinery.  Don’t laugh – it almost happened. Oil Refinery at Sunset/Corbis Dynamic simulation is often only considered for controls checkout and for operator training.  However, there are great benefits to be realized by applying dynamic simulation early on in the process lifecycle. For example, conventional methods of flare sizing are conservative in nature but conservative assumptions often lead to unnecessary overdesign, such as calculating that the flare must be as tall as the Eiffel Tower. First principles rigorous simulation helped an engineering company correctly size the flare for all anticipated scenarios and trim 20 million euros off the capital expenditure. A dynamic simulation model can be developed along with the plant design and evolve throughout the project execution. This saves money at every stage of the process lifecycle from design on through to operations.  This is much better than designing and then crossing your fingers in hopes that the plant performs as intended. The benefits and savings from performing a dynamic simulation study early on during the design, before capital expenditure is committed, can be substantial. The model used during the design phase then becomes an asset that grows and can be reused later for further benefits at a relatively insignificant cost. This blog is the first of a five-part blog series will begin to enumerate the benefits of Dynamic Simulation applied throughout the process lifecycle. Let’s start with the first part of the plant lifecycle – Front End Engineering Design. The following benefits can be realized using dynamic simulation early on in the design phase of a new project, whether it is a greenfield project or brownfield retrofit: Optimized Equipment Sizing and Costs Plant design must consider transient operating conditions such as start-up from cold-metal on up to full capacity, abnormal situations and plant shutdown. For example, dynamic simulation can evaluate the effect of vessel or flare header packing. Packing may reduce the back-pressures in a flare – particularly for depressuring or staged relief load.  This can highlight that a smaller flare would be sufficient which could save millions of dollars in capital expenditure Dynamic simulation can also validate the design of regular “smaller” equipment items that can have a detrimental impact on the plant if not sized correctly. For example an incorrectly sized anti-surge valve can fail to prevent surge potentially leading to equipment failure on major rotating equipment. Alternatively, an incorrectly sized electric motor on a compressor may have insufficient horsepower to allow a hot restart of a compressor at settle-out pressure. Correct Equipment Line-up and Instrumentation Location First of a kind plants or plants that are tightly heat integrated can be difficult to design and operate. Dynamic simulation can be used early on during the design phase to check that all auxiliary lines and start-up equipment are included and correctly sized and their operation correctly incorporated in the start-up procedures before the plant gets to commissioning. Discovering additional equipment is needed or equipment is incorrectly sized can cost millions of dollars if only discovered during live commissioning and not early on in the design process. These are just some of the many benefits of applying dynamic simulation early on in the design phase. Please feel free to reach out to me if you would like any supporting information or have specific questions whether dynamic simulation would make sense on your project. In the coming weeks, look for additional blogs which will help round out a holistic look at the benefits of dynamic simulation .  Take a quick look at the series. Engineering Studies for Design Validation – thanks for reading! Dynamic Simulation to Support Controls Pre-commissioning /Controls Checkout This blog will discuss how the above FEED dynamic simulation model can be enhanced and integrated with the DCS, ESD/SIS & PLC control systems to support controls pre-commissioning. All plant controls can be checked out in a safe environment prior to site commissioning which often cuts days or weeks off planned commissioning times. Workforce Optimization Through Operator Training Simulators Once the control configuration is validated, startup scenarios can be tested in the simulator, without the risk of lost production or increased downtime, to ensure plant operability. This blog discusses how an OTS can allow the operators to start receiving training long before plant construction is completed. Plant Crew Training – Integrated Board Operator and Field Operator Training  Operations staff directly impact safety, availability and profitability. Field and control room operators must work together as a team to ensure the plant remains on-line, produces the desired end-product without any incidents that would put the facility or locale at risk. This blog will discuss how an Operator Training Simulator can be connected to a 3D Virtual Reality representation of the plant to allow full plant crew training in a safe environment. “Practice makes perfect” as they say. Practice in a safe environment doubles the benefits. Corporate-wide training through Simulation The simulator envisioned at the design phase still can add additional value beyond the control room once the plant is up and running. This blog will discuss how simulators can be utilized to provide unique one-of-a-kind training experiences for almost all employees in the facility or even perhaps in your enterprise. The post What good is the Eiffel Tower in the middle of your refinery? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/05/what-good-is-the-eiffel-tower-in-the-middle-of-your-refinery/ http://everythingshale.com/news/2016/october/05/what-good-is-the-eiffel-tower-in-the-middle-of-your-refinery/ Wed, 05 October 2016 09:23:02 http://everythingshale.com/news/2016/october/05/what-good-is-the-eiffel-tower-in-the-middle-of-your-refinery-1/ One of the best ways to make sure the design of your refinery is going to look and perform the way you think it should is to perform front end engineering design (FEED) dynamic simulation studies.  This truly necessary phase of simulation modeling may save you from building a flare taller than the Eiffel Tower in the middle of your refinery.  Don’t laugh – it almost happened. Oil Refinery at Sunset/Corbis Dynamic simulation is often only considered for controls checkout and for operator training.  However, there are great benefits to be realized by applying dynamic simulation early on in the process lifecycle. For example, conventional methods of flare sizing are conservative in nature but conservative assumptions often lead to unnecessary overdesign, such as calculating that the flare must be as tall as the Eiffel Tower. First principles rigorous simulation helped an engineering company correctly size the flare for all anticipated scenarios and trim 20 million euros off the capital expenditure. A dynamic simulation model can be developed along with the plant design and evolve throughout the project execution. This saves money at every stage of the process lifecycle from design on through to operations.  This is much better than designing and then crossing your fingers in hopes that the plant performs as intended. The benefits and savings from performing a dynamic simulation study early on during the design, before capital expenditure is committed, can be substantial. The model used during the design phase then becomes an asset that grows and can be reused later for further benefits at a relatively insignificant cost. This blog is the first of a five-part blog series will begin to enumerate the benefits of Dynamic Simulation applied throughout the process lifecycle. Let’s start with the first part of the plant lifecycle – Front End Engineering Design. The following benefits can be realized using dynamic simulation early on in the design phase of a new project, whether it is a greenfield project or brownfield retrofit: Optimized Equipment Sizing and Costs Plant design must consider transient operating conditions such as start-up from cold-metal on up to full capacity, abnormal situations and plant shutdown. For example, dynamic simulation can evaluate the effect of vessel or flare header packing. Packing may reduce the back-pressures in a flare – particularly for depressuring or staged relief load.  This can highlight that a smaller flare would be sufficient which could save millions of dollars in capital expenditure Dynamic simulation can also validate the design of regular “smaller” equipment items that can have a detrimental impact on the plant if not sized correctly. For example an incorrectly sized anti-surge valve can fail to prevent surge potentially leading to equipment failure on major rotating equipment. Alternatively, an incorrectly sized electric motor on a compressor may have insufficient horsepower to allow a hot restart of a compressor at settle-out pressure. Correct Equipment Line-up and Instrumentation Location First of a kind plants or plants that are tightly heat integrated can be difficult to design and operate. Dynamic simulation can be used early on during the design phase to check that all auxiliary lines and start-up equipment are included and correctly sized and their operation correctly incorporated in the start-up procedures before the plant gets to commissioning. Discovering additional equipment is needed or equipment is incorrectly sized can cost millions of dollars if only discovered during live commissioning and not early on in the design process. These are just some of the many benefits of applying dynamic simulation early on in the design phase. Please feel free to reach out to me if you would like any supporting information or have specific questions whether dynamic simulation would make sense on your project. In the coming weeks, look for additional blogs which will help round out a holistic look at the benefits of dynamic simulation .  Take a quick look at the series. Engineering Studies for Design Validation – thanks for reading! Dynamic Simulation to Support Controls Pre-commissioning /Controls Checkout This blog will discuss how the above FEED dynamic simulation model can be enhanced and integrated with the DCS, ESD/SIS & PLC control systems to support controls pre-commissioning. All plant controls can be checked out in a safe environment prior to site commissioning which often cuts days or weeks off planned commissioning times. Workforce Optimization Through Operator Training Simulators Once the control configuration is validated, startup scenarios can be tested in the simulator, without the risk of lost production or increased downtime, to ensure plant operability. This blog discusses how an OTS can allow the operators to start receiving training long before plant construction is completed. Plant Crew Training – Integrated Board Operator and Field Operator Training  Operations staff directly impact safety, availability and profitability. Field and control room operators must work together as a team to ensure the plant remains on-line, produces the desired end-product without any incidents that would put the facility or locale at risk. This blog will discuss how an Operator Training Simulator can be connected to a 3D Virtual Reality representation of the plant to allow full plant crew training in a safe environment. “Practice makes perfect” as they say. Practice in a safe environment doubles the benefits. Corporate-wide training through Simulation The simulator envisioned at the design phase still can add additional value beyond the control room once the plant is up and running. This blog will discuss how simulators can be utilized to provide unique one-of-a-kind training experiences for almost all employees in the facility or even perhaps in your enterprise. The post What Good is the Eiffel Tower in the Middle of Your Refinery? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/05/what-good-is-the-eiffel-tower-in-the-middle-of-your-refinery-1/ http://everythingshale.com/news/2016/october/05/what-good-is-the-eiffel-tower-in-the-middle-of-your-refinery-1/ Wed, 05 October 2016 09:23:02 http://everythingshale.com/news/2016/october/05/progress-the-president-and-natural-gas/ Interesting remarks from President Obama during the South By South Lawn†event at the White House this week with the president basically saying that the abundance and affordability of domestic natural gas is key to America's energy present and future, even as he gave a nod to natural gas' ongoing role in reducing U.S. carbon emissions. President Obama: [T]he fact that we're transitioning from coal to natural gas means less greenhouse gases. … We've got to live in the real world. I say all that not because I don't recognize the urgency of the (climate) problem. It is because we're going to have to straddle between the world as it is and the world as we want it to be …†Credit where credit's due: It's tricky lauding natural gas in front of a crowd that's not all that big on natural gas (not to mention while sharing the stage with actor/climate activist Leonardo DiCaprio) even if you're the president and even if the event's going on in your own back yard.   Yet, President Obama talked about the realities of energy development, the energy needs of other countries around the world and the real concerns of lots of Americans about climate-related policies that could significantly impact their lives. The president: It is important for those of us who care deeply about this … to not be dismissive of people's concerns when it comes to what will this mean for me and my family. If you're a working-class family and dad has to drive 50 miles to get to his job and … the most important thing to him economically is to make sure he can pay the bill at the end of the month is the price of gas. And when gas prices are low that extra hundred bucks in his pocket or two hundred bucks in his pocket may make the difference on whether or not he can buy enough food for his kids.†Now, we don't agree with everything President Obama told Leo and the South Lawn audience. That same working-class household the president described most likely would be hurt by climate-related policies he has favored that pick energy winners and losers by making affordable energy less affordable. The fact is our industry already is advancing climate solutions in at least two big ways: First, the increased use of cleaner-burning natural gas is the chief reason the U.S. is leading the world in reducing energy-related emissions of carbon dioxide . The marketplace, as the president mentioned, is choosing natural gas because it's abundant and affordable, and as a result U.S. emissions are in decline without an international agreement or government program, and without sacrificing energy and economic growth . Second, the investment and innovation in the energy space that the president called for on the South Lawn also is already happening. Since 2000, industry has invested $90 billion in emissions-reducing technologies more than double the amount invested by each of the next three industry sectors: On this the president is right: Energy policies and energy paths must acknowledge the real-world needs of the American people. Oil and natural gas are our lead energy sources, in a broad mix of sources, because they're abundant, affordable, portable and energy-rich. They're the foundation of Americans' modern standard of living while also playing a significant role in advancing climate goals. This should be the context as we choose an all-of-the-above energy path that safely and responsibly harnesses America's oil and natural gas wealth while using other energy sources to meet the demands of individual Americans and the broader economy. By Mark Green  Originally posted October 4 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.   http://everythingshale.com/news/2016/october/05/progress-the-president-and-natural-gas/ http://everythingshale.com/news/2016/october/05/progress-the-president-and-natural-gas/ Wed, 05 October 2016 09:00:59 http://everythingshale.com/news/2016/october/05/cargo-re-trading-china-buying-in-h1-set-stage-for-metallurgical-coal-record-rally/ Metallurgical coal’s breathtaking 131% price rally in the third quarter of 2016 has elevated the steelmaking raw material to become the year’s best performing commodity so far. But Platts-observed spot trade data in January-June showed that the seeds of the price rally were already sown earlier in the year. Greater cargo re-trading and robust Chinese buying pushed seaborne metallurgical coal spot trades into the Asia-Pacific region higher 9.3% year on year to 30.95 million mt in the first six months of 2016. S&P Global Platts recorded a total of 408 spot transactions in Asia-Pacific for met coal — comprising premium, second-tier, semi-hard, semi-soft coking coals and pulverized coal injection coals — over January-June. The figure does not include cargoes sold into regions outside of Asia-Pacific such as Europe and South America. In comparison, Platts captured 370 deals, totaling 28.3 million mt, in H1 2015. The H1 2015 data is slightly higher than that previously published as it includes deals not previously reported. The calculations are based on spot deals observed by Platts as part of its Market on Close assessment process. Platts data measures transaction volume rather than cargo volume. This means a single cargo can be counted more than once as it trades repeatedly in the spot market before reaching the final end-user. Prime hard coal accounted for the majority 45% of total Asian spot trades in H1 2016, followed by second-tier HCC at 22%, PCI at 20%, and semi-hard and semi-soft coals at 13%. The data excludes transactions of which vessel destination was unknown. For further reading, please refer to the full report: Metallurgical coal H1 spot trade review The post Cargo re-trading, China buying in H1 set stage for metallurgical coal record rally appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/05/cargo-re-trading-china-buying-in-h1-set-stage-for-metallurgical-coal-record-rally/ http://everythingshale.com/news/2016/october/05/cargo-re-trading-china-buying-in-h1-set-stage-for-metallurgical-coal-record-rally/ Wed, 05 October 2016 05:11:56 http://everythingshale.com/news/2016/october/03/alpine-high-spotting-the-shadows-of-black-swans/ Schwarzschwan. Cygne noir. Cisne negro. Translation?? Black swan. When Nassim Nicholas Taleb popularized the term Black Swan after the 2008 market crash, just about every CEO and business strategist pretzelled their brains trying to anticipate—and thus get ahead—of the next Black Swan event. A Black Swan event is something totally unexpected, nearly impossible to predict, has unknown implications and which can have major ramifications for a widely disparate set of interest groups. Most folks usually think of them as events that bring destruction, chaos, uncertainty, and maybe even ruin. But sometimes, a Black Swan event can announce the arrival of something really great! In that spirit, we’re going to label Apache’s recent discovery/announcement of their opportunities along the Alpine High in Reeves County, TX as a Black Swan event. It was not predictable because the industry had written off Apache’s area of leasehold interest as: 1. Too complex to effectively exploit 2. Limited to dry gas production 3. Too clay rich , and therefore presumably too ductile to support resource play type hydraulic fracturing operations. Apparently “conventional wisdom” ain’t so wise. But we’ve seen this before in geology and in the oil and gas business. The most dramatic examples? • The adoption of plate tectonics as a hypothesis that explained basin formation, clastic deposition, and trap formation models. • George Mitchell’s breakthrough perseverance in proving that shale could be all the things that classic exploration petroleum geology looked for—source, reservoir, trap and seal—and that it covered hundreds of square miles—- Mother Nature’s gift that keeps on giving. So when a company is true to its vision and perseveres through to massive success, it’s a groundbreaking achievement. Making the comparison Given that Apache compares the stratigraphy and environment of deposition of the Alpine High area to the SCOOP STACK plays in OK, we thought that we would compare some of the Play Assessment mapping that we’ve done in the SCOOPT/STACK plays to the limited data for the Alpine high area.. From: Apache’s presentation to Barclays We confirm Apache’s claim that the Woodford section in the Alpine High area is approximately twice the thickness of the Woodford in the SCOOP/STACK. Our isopaching indicates an average thickness of Woodford in SCOOP-STACK of around 200+feet, whereas the Alpine High thickness is 350+ft. DI Play Assessments – MidContinent Moreover, cross sections comparing the SCOOP play with the Alpine high show that the Woodford section in both plays is relatively uniform in thickness(no worries about abrupt thinning or thickening) and lithology, which means that development drilling planning in the Alpine High area can quickly converge to a best practices benchmark. DI Play Assessments- Mid-Continent/Delaware Basin If we compare STACK leasing activity… …with Alpine High activity… Production Workspace …it appears that leased acreage title in the Alpine High area is not as highly partitioned into fractional interests as it is in the STACK area, which argues again for Apache’s ability to efficiently execute their development drilling strategy. And judging from a quick look at lease expiration dates in the area, drill-to-hold concerns won’t be an issue until early 2018, again providing a benign development drilling strategy timeline for Apache. Production Workspace Of course, the money shot is being able to get a firm handle on production rates and EURS in the Alpine High fairway. There’s not enough released production data to honestly estimate EURs for the play. But if we continue running with the SCOOP/STACK analogy we can get some significant insights. One thing we that we can say with utter confidence about upstream E&P…the industry always try to do better. And we do. The vintage curve display below shows that operators made meaningful, significant improvements in their production year over year from 2011-2015 in SCOOP/STACK Production Workspace – Type Curves Using our Decline Curve Analysis algorithm against the SCOOPT/STACK type curve, we get a P50 value of approximately 2.75 BCF/well, plus liquids(Woodford). Production Workspace-Probabilistic Decline Curve Analysis Given that Apache claims slightly better mean porosity-10%–in the Barnett/Woodford section for the Alpine High area versus SCOOP play mean porosity -7%–there’s obviously more gas/oil storage pore volume in the Alpine High area. And with Apache estimating less mean clay content—15% for the Alpine High area, versus 25%+ for the SCOOP area, we would expect that their Stimulated Rock Volume(SRV) per well in the Alpine High could be appreciably larger than SCOOP. (source : Apache’s Barclay’s Bank Presentation ) So where will the industry find the next generation of black swans?? Start with Hurricane Energy’s offshore West Shetlands test of fractured basement with natural flow rates of 6600 BOPD. {max flow rate of 11,000 BOPD 38 API oil. (source Penn Energy ) DI International One thing is sure…. we’ll always be looking to find what no one else has seen before. Post contributors: Thanks to Madeline Beitz for mapping of the Woodford, and to Tyler Krolczyk for leasing and well performance analysis. http://everythingshale.com/news/2016/october/03/alpine-high-spotting-the-shadows-of-black-swans/ http://everythingshale.com/news/2016/october/03/alpine-high-spotting-the-shadows-of-black-swans/ Mon, 03 October 2016 10:29:51 http://everythingshale.com/news/2016/october/03/us-gasoline-market-s-september-surprise-s/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices In a year when soothsayers’ crystal balls are as foggy as London in November, September encompassed a few unexpected surprises for the US gasoline market that underpinned gasoline prices and sharply cut down an inventory surplus. This was especially true for the East Coast, where gasoline supply plunged from a 26-year high to a 21-month low. At $1.4631 gallon, Reformulated Blendstock for Oxygenate Blending futures traded on the New York Mercantile Exchange ended the third quarter 20cts higher than in 2015 and flat with the end of the second quarter. The gasoline contract advanced nearly 15cts gallon on the spot continuous chart from the end of July–the height of peak season demand, with implied gasoline demand averaging 6.7% above the five-year average from Memorial Day through Labor Day. Speculators in late September where far more bullish then in late July, moving to a 63,592 net-long position in NYMEX RBOB futures as of Sept. 27 data from the Commodity Futures trading Commission shows, which was the largest long position for the noncommercial group since a week before the start of Memorial Day on May 23. The noncommercial group made a 43.8% net-change in their long stance from the middle of summer, adding 19,378 futures contracts to the long side of their ledger since July 25. Two well publicized events and a hurricane transformed the bearish oil market briefly experienced in early August, while another powerful hurricane, Matthew, has the potential to disrupt shipping lanes along the eastern seaboard in October. OPEC Production Initially, it was seen mostly as empty rhetoric and posturing as oil ministers with the Organization of the Petroleum Exporting Countries discussed production cuts in August and September to help stabilize the oil market, where an ongoing imbalance threatens to press global oil prices lower. Growth in world oil demand was slowing, inventory continued to build, and production was well above previous expectations. Indeed, OPEC was producing at an eight-year high, with Saudi Arabia at an all-time high, while output from non-OPEC producer Russia was near a post-Soviet high. US crude output declined less than expected, and producers were reactivating oil rigs, with the US rig count reaching a 7-1/2 month high in ending September, according to Baker Hughes, Inc. Yet, OPEC reached a consensus to cut production on Sept. 28, admitting that a global oil supply-demand imbalance would persist well into 2017 without action by the 14-country member producer group, pushed back from previous forecasts for the market to find balance during the second half of this year. The OPEC agreement to cut production is the first in eight years. OPEC ministers agreed to a production range between 32.5 and 33.0 million bpd from their August output of roughly 33.3 million bpd, but will leave the details on how those cuts will come about when they meet in Vienna on Nov. 30. The reduced production would begin in November, another feature that has some analysts downplaying the news. However, the Saudis are seen shouldering most of the cuts, and are said to be concerned that a low oil price would diminish their expected return from a 2017 planned initial public offering for a stake in Saudi Aramco. A leak found Sept. 9 on Colonial Pipeline’s 36-inch gasoline main line 1 in Alabama, which didn’t return to full service until Sept. 21 when a bypass around the leak was placed into service, limited gasoline supply in the Southeast north through the Mid-Atlantic, prompting sharp drawdowns in regional supply. The roughly 1.272 million bpd main line 1 originates in Houston, Texas, and ends in Greensboro, North Carolina, where it interconnects with main lines 3 and 4 on the Colonial system, with line 3 running north to Linden, New Jersey. Total PADD 1 East Coast gasoline supply was drawn down from a 72.493 million bbl 26-year high reached July 22 to 55.535 million bbl on Sept. 16, the lowest supply point for the region since December 2014. Weather and Gasoline Supply Hurricane Hermine, which on Sept. 2 was the first hurricane in 11 years to make landfall in Florida, disrupted shipping lanes and sea-to-shore off-loadings. East Coast gasoline supply was drawn down 2.284 million bbl to 64.894 million bbl during the week ended Sept. 2 and by another 884,000 bbl by Sept. 9. The hurricane and pipeline caused declines also occurred during the transition to higher Reid vapor pressure gasoline, when refiners move out summer grade product to make room for winter grades. Yet, EIA notes during the week ended Sept. 16, gasoline supply in PADD 1C, the Lower Atlantic, dropped nearly 6.0 million bbl to 22.0 million bbl. Before that decline, the largest weekly draw for Lower Atlantic states was 2.9 million bbl in June 2003. This week, market followers will follow the path of Hurricane Matthew, which reached Category 4 strength on Oct. 2 when situated just south of Jamaica. Current forecasts show a path for the slow moving storm along the Atlantic Coast, which would again disrupt shipping lanes. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market , click here .     The post US Gasoline Market’s September Surprise(s) appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/october/03/us-gasoline-market-s-september-surprise-s/ http://everythingshale.com/news/2016/october/03/us-gasoline-market-s-september-surprise-s/ Mon, 03 October 2016 08:58:46 http://everythingshale.com/news/2016/october/03/indonesia-s-refinery-buildup-to-hit-asia-s-oil-product-exporters-fuel-for-thought/ Backed by top oil producers Saudi Arabia and Russia, Indonesia’s refining sector development has finally picked up pace and this does not bode well for Asia’s oil product exporters. Indonesia is the region’s largest gasoline and gasoil importer. The country has been notorious for planning a spate of refining projects over the last two decades with no result. Indonesia last built a new refinery in 1994. But momentum has picked up since late 2015 when President Joko Widodo signed a decree declaring the upgrade and expansion of the refining industry a top national priority. The decree ensures refining projects enjoy benefits such as preferential tax rates and easy access to land. The decree has given Indonesia’s state-owned energy company Pertamina the ammunition it needs to go all out and get partners for refining projects. Pertamina and Saudi Aramco in May this year awarded the engineering and project management services contract for the upgrade of the Cilacap refinery, Indonesia’s largest. The Cilacap upgrade will hike its total nameplate processing capacity to 370,000 b/d from 348,000 b/d by late 2022. The two companies are also in talks to upgrade and expand the 170,000 b/d Dumai refinery and 125,000 b/d Balongan refinery but details are still to be finalized. Pertamina is, meanwhile, pursuing a revamp and expansion of the 260,000 b/d Balikpapan refinery and plans to boost its capacity by 100,000 b/d by late 2019. The state-owned company has also joined hands with Russian state oil giant Rosneft to build a 300,000 b/d greenfield refinery in Tuban, East Java. This refinery is expected to be ready by end-2021. For Saudi Arabia and Russia, the refinery deals with Indonesia give a boost to their market share at a time of intense competition. Aramco is expected to supply 260,000-270,000 b/d of crude to the refurbished Cilacap refinery and Rosneft will supply 45% of the crude to the Tuban refinery. In addition to Tuban, Indonesia is planning another 300,000 b/d greenfield refinery in Bontang, and is seeking partners for this project. Based on current data on refining projects, Indonesia’s refining capacity will go up from 1.02 million b/d to 1.75 million b/d in the next 10 years, excluding possible expansions at Dumai and Balongan. According to the Pertamina CEO Dwi Soetjipto, the company is targeting capacity of 2.3 million b/d by 2025, including domestic plants and stakes in overseas projects. Though the country has a refining capacity of over 1 million b/d, the fact that these plants are several years old makes it impossible for PERTAMINA to operate them at full hilt, leaving a big gap between supply and demand. The refineries operate at around 800,000 b/d, and Indonesia imports another 800,000 b/d of oil products to meet full demand. Based on Pertamina’s projection of 3%-4% annual growth in oil demand, the company expects the country to become self-sufficient in refined products once all the projects are onstream, and may even have surplus products available for export if oil-to-gas conversion proceeds in the transport sector. So where does that leave exporters? Exporters of gasoline have already lost some of their market after Indonesia brought online in October last year a residue fluid catalytic cracker at the Cilacap refinery and restarted a 98,000 b/d condensate splitter at the TPPI petrochemical complex. And things are only likely to get tougher. According to latest data from Statistics Indonesia, the country imported 7.04 million mt of gasoline over January-July 2016, down nearly 19% from 8.65 million mt in the same period last year. Gasoil imports have fallen 8.4% year on year to 2.54 million mt. Gasoline and gasoil account for 70% of Indonesia’s total oil product imports. China exported 578,393 mt of gasoline to Indonesia in the first eight months of 2016, down nearly 29% year on year. South Korea exported 11.74 million barrels of oil products to Indonesia in the first eight months of 2016, down 47% from 22.06 million barrels in the same 2015 period. Pertamina is certainly not worrying about excess refining capacity in the region. For Soetjipto, Indonesia’s refining capacity target is a strategic move. His logic is straightforward. Indonesia is a big demand center and by having its own refineries, Pertamina has control over products supply. “When we import, that is controlled by others. We have no control over crude supply — why not have as much control as possible over products supply?” The post Indonesia’s refinery buildup to hit Asia’s oil product exporters: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/03/indonesia-s-refinery-buildup-to-hit-asia-s-oil-product-exporters-fuel-for-thought/ http://everythingshale.com/news/2016/october/03/indonesia-s-refinery-buildup-to-hit-asia-s-oil-product-exporters-fuel-for-thought/ Mon, 03 October 2016 06:00:28 http://everythingshale.com/news/2016/october/02/gold-market-rife-with-rumors-of-likely-lbma-partner-to-increase-transparency/ The bullion market was awash with rumors September 30 relating to the possible winner of the recent request for proposal by trade body the London Bullion Market Association, with Autilla a standout name as a possible contender to be awarded the contract to increase market transparency. One source close to the situation said that the tech company appeared to be in a strong position to take the RFP and start trade reporting, among other things, in a bid to modernize the London market. “It would be premature to comment at this stage as no legal agreements have been signed with any provider,” Ruth Crowell, chief executive of the LBMA, said in a generic email to the media. The LBMA said February 4 that five service providers had made the final cut to submit an RFP to increase transparency in the London bullion market, widely believed to be CME Group, the London Metal Exchange, IntercontinentalExchange, Autilla/Cinnobar and Markit/ABS. None of the parties, nor the LBMA, would comment on the specifics of the matter. According to the trade body, “the purpose of these new services is to address the immediate regulatory, cost and growth requirements of the market, which will connect via a technology interface called the LBMA-i.” There had been media reports that this list had been whittled down to three, although S&P Global recently learned from a source close to the situation that all five remain in the running. Participants have become overall disgruntled by the process, which is now seen as cumbersome and disjointed, several sources ranging from bankers to brokers have expressed. The LBMA have said that they will announce the selected party at its annual conference, this year in Singapore, mid-October. Earlier this year Crowell told S&P Global Platts that the LBMA’s vision is to increase its power to be able to act, as a voice of the market, and represent its members should the need arise. Crowell was responding to recent criticism from certain quarters that — as the industry body — it has been slow to respond to some situations. Regarding the RFP process, Crowell said there is still a lot of work to be done; “if there were a simple solution, it would be implemented already.” One source said that his money was on Autilla. Speaking to Platts, Miguel Vias, head of precious metals at CME, said that the best path for success is definitely unity across the value chain from the miners to the refiners and any respective trade bodies. On August 8 the World Gold Council said it’s gearing up to launch a suite of exchange-traded and centrally cleared precious metals products in partnership with the London Metal Exchange in a bid to regenerate London’s slipping dominance in global gold trading, potentially reducing costs and increasing liquidity. As such, many believe that this discounts the LME from the RFP process. Also part of the offering, called LMEprecious, are Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale. The banks will act as liquidity providers for the contracts to ensure efficient price discovery and establish market depth. LMEprecious will comprise spot, daily and monthly futures, options and calendar spread contracts for gold and silver. Future developments will include platinum and palladium contracts. Regarding the Autilla rumors, a source said, “There’s a lot of talk today. But no one has signed anything, as far as I know.” He added if the rumors were true, “it would be a bold, innovative step by the LBMA and its members. A real sign of the benefits offered by FinTech companies over older, slower technology.” The post Gold market rife with rumors of likely LBMA partner to increase transparency appeared first on The Barrel Blog . http://everythingshale.com/news/2016/october/02/gold-market-rife-with-rumors-of-likely-lbma-partner-to-increase-transparency/ http://everythingshale.com/news/2016/october/02/gold-market-rife-with-rumors-of-likely-lbma-partner-to-increase-transparency/ Sun, 02 October 2016 06:00:44 http://everythingshale.com/news/2016/july/05/the-power-of-three-mexico-aligns-with-us-and-canada-on-oil-and-gas-methane-pollution/ Mexican President Peña Nieto today formalized Mexico's plan to join the U.S. and Canada in making oil and gas methane reductions a national priority, marking yet another country taking leadership to address this extremely potent greenhouse gas. The three leaders agreed that each of their countries would develop rules to cut up to 45 percent of methane escaping from across the continent's oil and gas industries by 2025. It's a pledge that once fully realized would have the same 20-year climate effect as taking 85 million cars off the road. Featured among a package of broader energy and climate commitments, the common methane reduction goal is a centerpiece. This announcement is a milestone for North America energy integration and cooperation. But, it's also an important moment for Mexico. The commitments Mexico is making both in-country and as part of the continental pact on methane, distinguishes Mexico as a clear world leader on energy and climate issues, along with the U.S. and Canada. By taking advantage of low-cost , oil and gas methane reductions, Mexico can make an immediate down payment on its climate goal cuts can deliver about 10% of the greenhouse gas reductions Mexico pledged, and all at a cost savings. The key will be implementation and what steps Mexico takes next are critical.  Mexico's commitment is especially encouraging given the changing landscape of the country's oil and gas industry. Recent historic changes opened up the industry to private investment for the first time since 1938. While state-owned oil and gas company Pemex has already set an example on methane by joining the Oil and Gas Methane Partnership, a voluntary UN-sponsored effort to improve transparency and accelerate best practices to reduce methane emissions, Mexico's actions today will ensure future private developments are defined by the same environmental excellence. This announcement is also evidence of nations making good on its Paris commitments. The U.S., Canada and Mexico specifically highlighted oil and gas methane as a way to meet their respective climate goals and today's agreement shows forward momentum to implement the policies required that will deliver on their international targets. Why Methane Matters Responsible for about 25 percent of the warming we feel today, methane is a potent gas that packs 84 times the warming power of carbon dioxide over a 20-yr time span. The oil and gas industry is the largest industrial source of methane emissions globally. Luckily, technologies exist today that can address the industry's methane problem at little to no cost. Analyses by ICF International have shown this to be true across all three North American countries, despite today's historically low gas prices, while in Mexico these reductions are the lowest cost of all. The immediate climate impact of methane, coupled with readily-available, cost-effective solutions to address the problem from oil and gas, make curbing methane emissions across the supply chain an obvious target for action. No climate investment has a higher impact for such a low cost. Signs of Momentum As the largest combined producer of oil and gas, North America has a big role to play in establishing a road map that can jump start the methane cuts needed worldwide. According to Rhodium Group , roughly 3.5 trillion cubic feet of methane escaped from the global oil and gas supply chain in 2012. That amount of methane, equal to about 3% of global natural gas production, has the same near-term climate impact as about 40% of annual global coal combustion. And the problem is projected to get worse. Without action, global oil and gas methane emissions can be expected to increase almost 20% by 2030, compared to a projected 10% increase in carbon dioxide from energy use. But there is reason for hope. In the US, unprecedented federal rules aimed at limiting pollution from new oil and gas infrastructure nationwide were finalized in May, with a promise to go after existing sources. President Obama's pledge to cooperate with Mexico and Canada on a common methane target continent-wide reinforces the importance of the U.S. moving ahead on existing source rules. Canada also announced that it will propose its national methane rules next year to ensure Canada fulfills its part. Investors totaling $3.6 trillion issued a letter calling for more action on oil and gas methane, in response to the US-Canada efforts. Last month, Denmark, Finland, Iceland, Norway, and Sweden joined the U.S. in agreeing to develop a global oil and gas methane goal, where the North American methane pact will be an important contribution to that process. Later this year, oil and gas producers involved in the Oil and Gas Methane Partnership will also issue a report outlining the actions they have taken and emissions they have avoided by participating in this international partnership. Taken as a whole, these actions show there has been tremendous improvement in the global response to reducing oil and gas methane, but there is more yet to do. A Catalyst for Global Action North America has been a catalyst for global climate action in the past, and it can be again. In 2009, the three countries proposed a joint amendment to the Montreal Protocol, which catalyzed global action to phase out hydrofluorocarbons (HFCs) another dangerous greenhouse gas. Those efforts are on track for completion later this year. If today's announcement sparked similar global commitments, the benefits would be significant. A global reduction of methane emissions by 45 percent would have the same climate impact over 20 years as closing one-third of the world's coal-fired power plants. While a North American methane commitment gets at a sizable chunk of the problem, global action will be necessary to meet the ambitious goals laid out in Paris and truly turn the corner on warming. The U.S., Canada, and Mexico have shown amazing leadership today; now other countries must follow suit. By Drew Nelson  Originally Published on June 29th, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/july/05/the-power-of-three-mexico-aligns-with-us-and-canada-on-oil-and-gas-methane-pollution/ http://everythingshale.com/news/2016/july/05/the-power-of-three-mexico-aligns-with-us-and-canada-on-oil-and-gas-methane-pollution/ Tue, 05 July 2016 09:00:35 http://everythingshale.com/news/2016/july/04/human-on-a-chip-technology-could-replace-animal-testing/ Developing new prescription drugs and antidotes to toxins currently relies extensively on animal testing in the early stages. That is not only expensive and time consuming, but it can also give scientists inaccurate data about how humans will respond to such agents. But what if researchers could predict the impacts of potentially harmful chemicals, viruses, or drugs on human beings without resorting to animal or even human test subjects? To help achieve that goal, scientists and engineers at Lawrence Livermore National Laboratory are developing a human-on-a-chip,†a miniature external replication of the human body, integrating biology and engineering. The team is combining microfluidics (networks of tiny tubes and channels) and multi-electrode arrays (devices that connect neurons to electronic circuitry). The project, known as iCHIP (in-vitro Chip-based Human Investigational Platform), reproduces four major biological systems: the central nervous system (brain), peripheral nervous system, the blood-brain barrier, and the heart.   It's a testing platform for exposure to agents whose effects are unknown to humans,†said LLNL engineer Dave Soscia, who co-leads development of the brain-on-a-chip†device used to simulate the central nervous system. If you have a system that is engineered to more closely replicate the human environment, you can skip over the really lengthy process of animal testing, which doesn't necessarily give us information relevant to humans.†The iCHIP team is focusing its efforts on the brain, where they're looking to understand how neurons interact with each other and react to chemical stimuli such as caffeine, atropine (a drug used to treat poisonings and cardiac arrest), and capsaicin, the compound that gives chili peppers their hotness, as well as chemical agents in the Lab's Forensic Science Center. Unique to the iCHIP platform is combining multiple brain cell types on the same device without barriers between those regions. To study the brain, primary neurons are funneled or seeded†onto a microelectrode array device, which can accommodate up to four brain regions (such as the hippocampus, thalamus, basal ganglia, and cortices). After the cells grow, a chemical (atropine for example) is introduced, and the electrical activity from the neurons is recorded.   The idea is that we can look at network-wide effects across different brain regions,†Soscia said. It adds a level of complexity that has never been done before.†Preliminary results have shown that hippocampal and cortical cells can survive on the chip for several months while their responses are recorded and analyzed, Soscia said. The human body features a vital mechanism called the blood-brain barrier, which filters out chemicals and toxins before they reach the central nervous system. LLNL engineer Monica Moya leads the team trying to reproduce it for the iCHIP. The device uses tubes and microfluidic chips (which feature tiny etched channels rather than tubes) to simulate blood flow through the brain. Moya and her team are testing the device with caffeine and other agents to ensure the system is performing and the cells are reacting as they would in a human body. The blood-brain barrier is the brain's gatekeeper, allowing nutrients to enter in the brain from the blood flow while keeping out potential toxins. It works so well that it unfortunately can also block potentially useful therapeutics to the central nervous system,†Moya said. Having a realistic human lab model of the blood-brain barrier will help researchers study the barrier's permeability and be incredibly useful as an in vitro model for drug development†The iCHIP research, Moya said, could have implications for creating new drugs to fight cancer, vaccines, or evaluating the efficacy of countermeasures against bio-warfare agents. Scientist Heather Enright is leading research into the peripheral nervous system (PNS), which connects the brain to the limbs and organs. The PNS device has arrays of microelectrodes embedded on glass, where neurons from the spinal cord are seeded. Chemicals such as capsaicin (to study pain response) then flow through a small, precise valve to stimulate the cells on the platform. The microelectrodes record electrical signals from the cells, allowing researchers to determine how the cells are responding to the stimuli non-invasively. This has important advantages over current techniques. A multi-electrode array approach, like that used on iCHIP, really allows you to interrogate the cells over multiple trials so we can maximize the data we get from them. This is especially important when testing rare primary human cells. When you're looking at exposure to an unknown chemical for instance, the cells' response may be different weeks or months compared to hours after exposure. This is a non-invasive way of assessing changes in their health and function over time.†Additionally, early research is being done to replicate the heart on a chip. Cardiac cells have already been shown to successfully beat†in response to electrical stimulation, with the intent to simultaneously measure the electrophysiology and movement of the cells. The next step, according to iCHIP principal investigator Elizabeth Wheeler, is integrating all the systems together to create a complete testing platform to study some fundamental scientific questions. The ultimate goal is to fully represent the human body,†Wheeler said. Not only can the iCHIP provide human-relevant data for vaccines, but it can also provide valuable information for understanding disease mechanisms. The knowledge gained from these human-on-a-chip systems will someday be used for personalized medicine.†http://everythingshale.com/news/2016/july/04/human-on-a-chip-technology-could-replace-animal-testing/ http://everythingshale.com/news/2016/july/04/human-on-a-chip-technology-could-replace-animal-testing/ Mon, 04 July 2016 16:00:32 http://everythingshale.com/news/2016/july/04/colombia-s-peace-deal-could-spur-oil-sector-turnaround-fuel-for-thought/ Is a peace dividend in the form of more investment–and ultimately more production and jobs–coming to Colombia’s beleaguered oil and gas sector? That’s been the hope of executives and analysts since the government signed a permanent cease fire on June 23 with the Revolutionary Armed Forces of Colombia, or FARC, the country’s largest rebel group. If a comprehensive peace deal is signed later this summer as expected, the warring sides could end 52 years of armed aggression. An end to hostilities, assuming one takes hold in the mostly rural areas where oil is pumped, would be welcome news for E&P and oil field services firms. Their employees have been regular victims over the decades of FARC kidnappings, bombings, extortion and murders. From 2001 through 2015, Colombian national police reported 219 oil company employees were kidnapped for ransom by FARC guerrillas and other groups, according to figures compiled by Agora Consultorias, a risk analysis firm in Bogota. Oil firms have paid untold millions in extortion payments to armed groups as well. Over that same 15-year period, there were 1,814 reported bombings of Colombian pipelines, the vast majority by suspected FARC rebels. According to El Tiempo newspaper, as many as 4.1 million barrels of oil have been lost to the bombings since the mid-1980s, or more than twice the oil spilled by the Exxon Valdez after it ran aground in Alaska in 1989. Naturally, those statistics have had a chilling effect on Colombia’s oil patch, especially in recent years as lower global prices have made the Andean country a tougher sell to oil companies’ investment committees. Added to the country’s challenging logistics and higher lifting costs associated with heavy oil, security issues have driven many companies to more inviting conditions in Mexico, Peru and Argentina. Three years of investment declines are coming home to roost, contributing to a precipitous decline in Colombia’s crude output this year. After averaging 1,005,000 b/d in 2015, Colombia pumped only 904,000 b/d in May, down a shocking 11.8% from what was pumped in the year-ago month. Adding to the gloom is that Colombia’s proven oil reserves took a major hit last year, falling to 2 billion barrels as of December 31, down from 2.308 billion barrels at the end of 2014, a 13% decline. The drop follows a 5.6% decline reported at the end of 2014. Others step in where FAR C left President Juan Manuel Santos insists the improved security resulting from a peace deal, which if signed would go before Colombian voters later this year, could be a turning point, making Colombia more appealing to investors in energy and other sectors. But analysts caution that benefits from a peace accord will take time to materialize. Moreover, investors are weighing factors other than security in their Colombian investment decisions, including a looming tax reform package that goes before Congress later this year that could place a higher fiscal burden on oil companies. Orlando Hernandez, president of Agora Consultorias, notes that Colombian armed forces are still at war with other rebel and criminal groups that dominate some areas of rural Colombia, making the Colombian oil patch still a risky environment. Hernandez notes that as the FARC has wound down its violent activities since declaring a provisional cease-fire a year ago, the National Liberation Army, another rebel group known by its Spanish initials ELN, had moved in. The ELN has carried out 15 pipeline attacks so far this year, up from its year-ago total of five, he said. The Colombian government and the ELN are not currently in peace talks. Another problem that oil companies face that won’t be helped by a FARC peace deal is the rising occurrence of blockades by peasants and indigenous groups of oil and gas installations. Executives complain that the blockades have been more damaging to production in recent years than the rebels. Some groups have environmental complaints against E&P projects, others do it to extract labor or royalty concessions from the government. Currently, a month-long blockade by indigenous groups of a natural gas processing plant in the town of Gibraltar in northeast Colombia has caused a 30% increase in gas prices for residents of nearby Bucaramanga. Last year, groups blocked repair crews from fixing the 220,000-b/d Cano Limon pipeline for two months, costing the country millions in oil revenue, Hernandez said. The post Colombia’s peace deal could spur oil sector turnaround: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/july/04/colombia-s-peace-deal-could-spur-oil-sector-turnaround-fuel-for-thought/ http://everythingshale.com/news/2016/july/04/colombia-s-peace-deal-could-spur-oil-sector-turnaround-fuel-for-thought/ Mon, 04 July 2016 02:10:39 http://everythingshale.com/news/2016/july/04/brexit-just-a-bump-in-the-bull-run-for-base-metals/ The EU referendum vote and the shock decision by 52% of the UK’s population to leave caused immediate shock waves throughout global financial markets: European stocks, the British pound, euro and global share prices all plummeted in the immediate aftermath, whilst safe-haven assets such as gold and the dollar rocketed up. Yet the base metals complex seemed to register only a small bump from the event, recovered quickly and is now higher than it was before the vote. Why is this? The base metals complex has climbed 10% on average since January 1 on the London Metal Exchange. Zinc has been the star performer, up 28.0% to date, with tin in second at 16.4%. Lead is the only metal to have lost since January 1, down 1.2%, while nickel is up 7.0%. Copper is up 2.8% to date and aluminum 8.9%. Sentiment improving before the vote With market expectations leaning towards a remain vote in the week before the result, metals were moving in an upward direction largely due to improved sentiment rather than any apparent shift in fundamentals. Possibly because of short-covering in anticipation of a remain vote, Commitment of Traders showed speculative net short positions of copper on COMEX at record highs in the weeks preceding the announcement. In the week prior to the vote, copper was up 5.07%, aluminum 2.08%, nickel 3.88%, lead 1.59%, tin 1.35% and zinc 2.35%. The complex as a whole was up 2.70% on the week, basis LME data. Barclays drove home the point about weak fundamentals saying, “We stand by our call for mediocre copper import results in the coming months, as demand within China slows over the summer. Moderating copper imports will reduce the upward pressure on global prices,” on June 21, highlighting again that in their view this rally was not supported by demand-supply dynamics. “Tin is too high, I can see it coming down,” one tin trader told Platts on June 23. “There is too much material around right now, stocks are high, the market is pretty dead so I can’t see where the demand is, so I can see the metal falling,” expressing his belief that tin was now well above its fundamentals. Smaller than expected loss on ‘exit’ vote Then in the early hours of June 24, markets erupted worldwide as results started coming through. “We were looking for a correction in the [metals] market, but it is not as large as expected,” one trader said in the aftermath. This sentiment was echoed by others. “There’s not the downside I expected; people are unsure, and are punting around in the market,” a second trader said on the same morning. “The metals were all pushed up on the remain sentiment this week,” a third trader added, “and now they are falling, but not as much as I would have expected.” Nickel was the biggest loser on the day, falling 2.38% by the close on June 24, aluminium and copper fell 1.40% and 1.60% respectively. Lead dropped 1.12%, while zinc and tin lost 0.95 and 0.98% each. The complex slipped as a whole by 1.40%. By comparison, the GBP-USD lost 8%, the EUR-USD lost 2.6% and the FTSE 100 lost 3% by the end of the day. Morning madness, afternoon calm Activity on the LME was focused in the morning trading session, with the market surprisingly quiet by the afternoon. The majority of the trading activity on the day was focused in the morning session, copper trading more than 23,500 lots before 9 a.m. according to a second broker, while tin lost $750 before 6 a.m. and recouped over the later part of the day. While the initial price loss was significant, around $150, by 17:00 the price had clawed back $50, and the close on June 26 was already trading above the peak on June 23. Looking at volumes traded between June 13-30 there was a notable increase over June 23-24. “I think people don’t really know what to expect,” said the earlier broker, “but we will have to wait and see.” “Everything was pushed up prior to the vote, so we will see what level it corrects to,” said a broker the morning after the vote. At the end of June 24, a fourth trader said, “The market has taken [Brexit] well, there were some dramatic moves in the premarket, but it’s been fairly quiet since then; copper did well to recover.” Rapid recovery “The base metal complex went down; it was always going to on the Brexit vote, but by less than was expected,”  a purchaser said on June 27. “In the short term, prices have to come off, Bremain was priced into the base metals all week, and they haven’t corrected, so I think we are going to see them all fall now,” said a fifth trader, who looks over all the base metals, on June 24. By June 29, the base metals complex closed 1.44% on average higher than the high point before the referendum vote. Tin is the only metal that didn’t break through its pre-Brexit high, but the tin contract is notoriously illiquid, and this may have played a part in this. Comparing this recovery to other economic indicators, as shown in the below graph, the base metals complex was very quick indeed to recover, reaching pre-Brexit levels two days before the FTSE 100 managed the same. The performance of the complex was also better than that of the FTSE 100 and the British pound over the period. The reasons for the rapid recovery have been put down largely to the fact that the UK leaving the EU would not impact the demand side. Europe consumes around 25% of global commodities, and the UK is only a very small fraction of this. This logic seems slightly perverse, however, as it was market sentiment on the referendum that inflated the prices, but it seems not to have had the same impact to the downside. “On the LME, nothing has changed on Brexit. Britain doesn’t produce or consume much and even Europe is small compared to China,” a market source said on the afternoon of June 24. The second key driver was the dollar. The greenback strengthened considerably on the vote, and historically the greenback and commodities have a strong negative correlation. The market also seems to be increasingly optimistic, given how well the complex shrugged off the Brexit event, and this could be helping drive the increase in long positions that is now helping to push the bull run along. “The market is quite optimistic; the base metals didn’t do so badly, and I think people are getting overly confident. Long positions are increasing, and the price is back up. Who knows where it will go; certainly copper is meeting resistance at $4,870, and I don’t think it will break that, but who knows,” a broker said on June 30. The post Brexit just a bump in the bull run for base metals appeared first on The Barrel Blog . http://everythingshale.com/news/2016/july/04/brexit-just-a-bump-in-the-bull-run-for-base-metals/ http://everythingshale.com/news/2016/july/04/brexit-just-a-bump-in-the-bull-run-for-base-metals/ Mon, 04 July 2016 02:00:42 http://everythingshale.com/news/2016/may/31/wyoming-adjusts-coalbed-methane-gas-well-permit-bond-amount/ If you are a coalbed methane gas well owner in Wyoming, there are new regulations in the state to consider. They are the new standard for staying in legal compliance. The Wyoming Oil and Gas Conservation Commission (WOGCC) has adopted changes to the coalbed methane gas well permit bond requirement and introduced a new surety bond requirement for seismic exploration activities. The new legal framework aims to guarantee the proper handling of land after it has been used for mining. In this way, funds will be secured for plugging of wells and land reclamation, as the need arises. The increase is enacted to tackle issues with abandoned mined land across the state. Let’s take a look at the most important legal changes for Wyoming coalbed methane gas well owners. The legal requirements for well owners in Wyoming Until now, the bond amount for wells less than 2,000 feet was set at $10,000. Well owners of wells deeper than 2,000 feet had to post a $20,000 permit bond. For multiple-well owners, there was a possibility to obtain a blanket bond of $75,000, covering all locations. Additionally, if drilling occurred on private land, $2,000 bond for each well location was also required. Seismic exploration operators were not required to get bonded to operate legally previously. The new coalbed methane gas well permit bond The most significant alterations made by the Commission concern the amount of the coalbed methane gas well permit bond. The new regulations stipulate that the bond amount is dependent on the depth of the wells. $10,000 bond coverage is needed per one thousand feet of a well. Thus, for a 2,000 feet well, the bond amount would be $20,000. The blanket bond amount for multiple-well owners has been increased with $25,000 to a total of $100,000. Drilling on private land will require a bond of $10,000. There are new regulations for seismic exploration operators as well. Those working on a surface owner’s property will need to obtain a $5,000 bond for using less than 1,000 acres, on top of securing the needed permissions from the owners of the land. Every other 1,000 acres will need bond coverage of additional $1,000. Besides the bond requirement, there is a new regulation concerning well ownership transfer. The Commission has the right to hold the bond of the original owner for up to half a year during which it is assessing the performance of the new well operator. All legal changes can be viewed in Chapter 3 Drilling Rules of the WOGCC . The reasoning for the changes The main rationale for introducing higher amounts for coalbed methane gas well permit bonds is to secure adequate funds for taking care of land that has been used for mining – plugging and reclaiming. The new legislation comes as an answer to the high number of wells that were abandoned in the last years in the Powder River Basin . Currently, there are $23.9 million at the Commission’s disposal in the form of bonds that serve as a security for reclamation obligations . With the new rules, this amount will rise to $43.5 million. The purpose of surety bonds, in principle, is to guarantee that the bonded party will follow its contractual and legal obligations. If the state of Wyoming suffers any losses due to well owners’ actions breaching the rules in Chapter 3 of the Wyoming Rules and Regulations, the bond can provide compensation for the damages. In case the well owner reclaims the well, the bond is not used, but if they don’t, the state can use the bond to take care of the land. Let’s not forget, also, that well owners do not need to provide the whole bond amount in cash when getting bonded. They have to cover only a fraction of the required bond amount, which is their bond premium. Thus, while the new bond requirements might seem high, they are not likely to prevent well owners from conducting business, while they will guarantee that the state has enough funds to reclaim mined land. Over to you What are your thoughts on the legal changes for coalbed methane gas wells in Wyoming? We’d love to hear your views in the comments below. http://everythingshale.com/news/2016/may/31/wyoming-adjusts-coalbed-methane-gas-well-permit-bond-amount/ http://everythingshale.com/news/2016/may/31/wyoming-adjusts-coalbed-methane-gas-well-permit-bond-amount/ Tue, 31 May 2016 13:00:01 http://everythingshale.com/news/2016/may/17/three-ways-methane-standards-can-help-the-oil-and-gas-sector-rebuild/ A massive wave of market and societal forces is changing the oil and gas industry. Low commodity prices are driving out weaker players with excessive debt, and forcing those that remain to become leaner and more efficient. As climate change effects worsen and countries move to fulfill their commitments from the Paris climate agreement, public scrutiny of oil and natural gas and their impacts only intensifies. The question is not will industry change to meet these challenges - it's how . It's about what opportunities can propel industry to come back stronger out of the depths of the commodity slide, as a leaner, cleaner industry standing on firm ground that it can play a meaningful role as societies work to transition to lower-carbon economies. While natural gas remains a fact of life, and switching from coal to natural gas has helped reduce greenhouse gas emissions, scientific research has demonstrated that potent methane emissions from the oil and gas system are undermining that climate benefit. The latest U.S. inventory shows over 9 million metric tons of oil and gas methane emissions, packing the same climate impact over a 20 year timeframe as over 200 coal-fired power plants. That's a lot of methane no matter how you slice it. Methane standards like the rule announced today by EPA can aid industry, for three reasons: 1. (Re)build public trust According to the 2016 Edelman Trust Barometer survey a gauge of public trust in the business world, spanning 33,000 people in 28 countries the energy sector is among the least trusted sectors in the business world , ranked above only financial services and pharmaceuticals. As with any industry, trust can be rebuilt, but it's going to take fresh effort from operators to curb emissions sector-wide, communicated in an open, consistent and verifiable way. We know that there are some better actors in the oil and gas sector, but performance across the industry varies widely. Consumers only see the bad actors getting headlines, so when leaks or accidents occur, that's all they have to form an opinion about how industry is performing. The EPA methane rule announced today is an important step toward leveling the playing field across the industry and setting a new status quo for responsible production. There's strong public support for measures like today's rule that will bring emissions down according to a poll conducted last fall by the American Lung Association, two-thirds of voters favor strong national limits on methane . Because EPA's rule sets a new floor on what companies must do to contain emissions from new wells and other sources, it can inspire public confidence that operators are working to solve the problem. 2. Affordable solutions readily available, keep product in the pipes The success of a similar rule that took effect last year Colorado's Regulation 7 requiring best practices for reducing methane emissions is a clear indicator that companies are seeing benefits from identifying and fixing methane leaks, which represent lost product and revenue in addition to potent climate pollution. In a report released by the Center for Methane Emissions Solutions, eight out of ten oil and gas companies found that in the long run, their compliance costs have been low, they have broken even or they have profited from the required inspections . Colorado's rule is increasing workers' attention to detail and prompting them to find 2 to 3 methane leaks per inspection, most of which can be fixed in just a few days. Since the federal rules are in many ways comparable to what Colorado put in place, the Colorado success story is evidence that operators will be able to achieve similar benefits and comply with the national standards cost-effectively. 3. Driving innovation Colorado is a powerful example of how well-crafted rules can create business value, and operators achieved those outcomes using today's proven leak detection solutions. With new innovations on the horizon, the already-manageable costs of minimizing leaks will go down even further. Collaborations like the Methane Detectors Challenge, which EDF leads with a diverse set of industry, academic and NGO partners, are catalyzing new advances in methane detection technology to cut more emissions at less cost. The new systems emerging from the Challenge and the broader marketplace will automate the leak detection process and help operators identify leaks faster, bringing down labor costs and reducing product waste and pollution even more.   Importantly, the EPA rule values the promise of technology innovation and establishes a process for the agency to permit use of emerging technology for reducing fugitive emissions at well sites and compressor stations. This encouragement sends an immediate demand signal to the marketplace to accelerate innovation of alternative emission monitoring approaches, such as continuous detection systems, which can help industry boost efficiency while delivering greater emission reductions. A triple-win for industry Public opinion is firmly behind taking action to curb emissions, and as we've seen in Colorado, operators are benefiting from minimizing how much product is lost. Today's rule will help the sector as a whole chart a more sustainable path one that builds more value for themselves and investors, reduces risk, and starts the process of rebuilding public trust that both business and policymakers are working to solve the oil and gas methane problem. By Ben Ratner  Originally Published on May 13th, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/may/17/three-ways-methane-standards-can-help-the-oil-and-gas-sector-rebuild/ http://everythingshale.com/news/2016/may/17/three-ways-methane-standards-can-help-the-oil-and-gas-sector-rebuild/ Tue, 17 May 2016 09:00:49 http://everythingshale.com/news/2016/may/17/nature-abhors-a-vacuum-but-does-the-ddgs-market/ Aristotle developed the idea that a vacuum couldn’t exist in nature because the denser matter around it would immediately fill the space. The first few months of 2016 have shown that the US DDGS export market also abhors a vacuum. In late 2015, the Chinese Ministry of Commerce announced it would begin an investigation at the request of local ethanol producers into allegations that US producers were dumping cheap dried distillers grains onto the Chinese market. What happens next will provide some insight into the future of the DDGS market and where the opportunities for expansion lay. The top importer For the last five years, the growth of Chinese DDGS imports from the US roughly has mirrored the overall growth of the US export market. In 2011, China accounted for 17.9% of the 7.68 million mt of DDGS exported from the US. By 2015, China accounted for 50.1% of US DDGS exports, which had grown to 12.55 million mt. But the Chinese market has had some hiccups in its relationship with the US industry. In 2010, the Chinese government launched an anti-dumping investigation of US DDGS imports that ended 18 months later. In 2014, the Chinese government refused to allow imports of US DDGS due to restrictions of genetically modified corn. The sheer size of China’s presence in the DDGS market has an impact on the overall export market. The next nine largest importers of US DDGS combined do not import as much of the product as China does. And the vast quantity of imports means that China can drive prices up substantially. So when the Chinese government announced in late 2015 it would launch another anti-dumping investigation, the impacts were felt quickly. Chinese imports began to dwindle, and prices fell sharply. In March 2016, Chinese DDGS imports fell to their lowest level since December 2014. And per-unit prices for DDGS fell for seven consecutive months, from $255/mt to $189/mt. Now the US DDGS industry faces a significant challenge. China could allow US imports to resume unimpeded, as it did in 2012 after the first investigation. If that happens, it could rightly be assumed that trade flows will resume at the same levels. However, what if China imposes some duties on US imports? If that happens, will DDGS imports to China be affected? Will US DDGS producers be left with a lot of product and nowhere to go? Early returns Early returns in 2016 are mixed. According to US Department of Agriculture data from the first three months of the year, overall exports are down only 1% in terms of volume. That comes despite a much larger decline in volume from China. The per unit price rebounded slightly, although it still remains substantially lower than its peak in June. According to market sources, foreign customers have used the lack of Chinese interest to seek better prices for product. Market sources expect the Chinese investigation will continue at least through the end of May, and with recent delays in the probe, it could stretch into summer. That provides the US DDGS industry with a chance to see what an export market without China would look like during the summer months, when exports historically tend to peak. Of key interest will be the impact on prices during the summer months. If non-China foreign customers increase their purchases during the summer, the higher demand should be expected to increase prices. But just how much of increase can be expected? Regardless of the outcome of the China probe, one thing is sure: the US DDGS industry is about to find just how much the market abhors a vacuum. Wes Swift will be speaking at the 20th Annual Distillers Grain Symposium in St. Louis, Missouri, on May 18. The post Nature abhors a vacuum, but does the DDGS market? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/17/nature-abhors-a-vacuum-but-does-the-ddgs-market/ http://everythingshale.com/news/2016/may/17/nature-abhors-a-vacuum-but-does-the-ddgs-market/ Tue, 17 May 2016 09:00:25 http://everythingshale.com/news/2016/may/17/new-foia-d-emails-tell-a-very-different-story-about-how-ny-ag-s-rico-campaign-started-off/ A new batch of emails , released late Friday afternoon , pulls back the curtain further on the level of collusion and coordination between anti-fossil fuel activists, their funders, and the attorneys general that have launched climate investigations into people, companies, and think tanks with which they disagree on the issue. These emails, obtained through a Freedom of Information Act (FOIA) request by the Free Market Environmental Law Clinic , show that key activists behind this campaign had hoped they could make a case for prosecuting climate “deniers” under the Racketeer Influenced and Corrupt Organizations (RICO) Act. But, due to multiple warnings from experts that such a case would be have no chance to actually succeed, they decided instead to shift their strategic focus to state-level attorneys general to get the job done. Interestingly, these emails date back to last summer, months before the Rockefeller-funded InsideClimate News and the Columbia School of Journalism published their #ExxonKnew investigations. The key players that emerge from this latest batch of emails are George Mason University (GMU) professors Jagadish Shukla and Edward Maibach, who spearheaded a letter in September 2015 with several other colleagues to Attorney General Loretta Lynch and President Obama asking them to explore RICO charges against climate “deniers” and their funders. Here are some other key revelations that come from these emails: #1: Activists were colluding with state AGs much longer than initially thought The activists pushing for the climate RICO investigations have been claiming that the “investigative reporting” by InsideClimate News (ICN) and the Columbia School of Journalism were what spurred them to action. But as these new emails reveal, the master plan was already in place and well under way before those articles were published. In one email, GMU professor Ed Maibach reached out to the Union of Concerned Scientists (UCS) to enlist its help in getting activists from every congressional district to sign on to their letter. Peter Frumhoff of UCS replied to that request by saying his organization would not join the effort — because UCS did not think the case was strong enough to have a chance of eliciting the intervention of the federal attorney general. Frumhoff went on to admit that they were already pursuing a possible path via state AGs, noting “we think there’ll likely be a strong basis for encouraging state (e.g. AG) action forward, and in that context, opportunities for climate scientists to weigh in.” That this email comes from Frumhoff is particularly interesting considering that he was one of the activists who briefed the attorneys general launching the RICO investigations just ahead of their March 29 press conference with Al Gore. After newly released emails revealed his attendance, Frumhoff admitted he was there: “I was invited to brief the attorneys general that gathered on March 29 on my work, and that is what I did.” Frumhoff also organized and attended a now infamous 2012 workshop  in La Jolla, Calif., hosted by the Union of Concerned Scientists (UCS) and Climate Accountability Institute (CAI). The meeting brought together activists in order to brainstorm the various ways they could help hasten an investigation into ExxonMobil in particular, which led to the publication of a report called, “ Establishing Accountability for Climate Change Damages: Lessons from Tobacco Control .” Frumhoff’s email isn’t the only indication that collusion between activists and AGs has been going on for a while. Here are just a few more examples: On January 11, 2016, the Huffington Post published an op-ed by Lyn Davis Lear, co-founder of Environmental Media Association, who notes that “In the spring of 2014, I was having lunch with one of my heroes, Attorney General of New York, Eric Schneiderman, and his head of the Environmental Protection Bureau, Lemuel Srolovic…We were also discussing the possibilities of a state Attorney General suing oil and coal companies for being implicit in causing climate change. Through a friend, I found a few, obscure studies from some major universities showing links between the two.” By the way, Lem Srolovic is one who told anti-fossil fuel lawyer Matt Pawa not to tell a Wall Street Journal reporter that he had briefed the AGs ahead of their press conference: “My ask is if you speak to the reporter,” Srolovic said, “to not confirm that you attended or otherwise discuss the event.” November 5, 2015, ICN admitted that the plan to have New York Attorney General Eric Schneiderman spearhead investigations had been in the works for at least a year: “New York State Attorney General Eric Schneiderman’s office demanded that ExxonMobil Corporation give investigators documents spanning four decades of research findings and communications about climate change, according to a person familiar with the year-long probe.” (emphasis added) That same article also admitted that activists had their sights on Schneiderman as the man to launch this plan for quite some time: “Some climate advocacy groups  have long urged  that Schneiderman, a second-term Democrat, investigate Exxon and other companies under the 1921 statute.” On September 30, 2015, an article by ICN suggests that there was already an effort underway to use the Martin Act through Schneiderman rather than RICO to achieve their goal: “Whitehouse, for one, has outlined the case for a Justice Department probe of whether Exxon violated the federal Racketeer Influenced and Corrupt Organizations Act, known as RICO. The advocacy group Climate Hawks has mounted an online petition drive to urge Attorney General Loretta Lynch to open such an investigation. Prosecution under that law, which was used against the tobacco industry in the 1990s, would require evidence of a conspiracy. Another frequently mentioned option is for Attorney General Eric Schneiderman of New York to invoke the state’s powerful stock-fraud statute, the Martin Act, as the state has done in recent years to force other fossil fuel companies to disclose more about the financial risks they face from climate change.” The report that came out of the La Jolla conference in 2012 singles out the AG option this way: “State attorneys general can also subpoena documents, raising the possibility that a single sympathetic state attorney general might have substantial success in bringing key internal documents to light. In addition, lawyers at the workshop noted that even grand juries convened by a district attorney could result in significant document discovery.” (emphasis added) #2. Activists were told by numerous experts that RICO wasn’t going to work What’s also interesting about these emails is that that Maibach and Shukla were told on multiple occasions that the RICO law just wasn’t going to cut it. The email mentioned above from Frumhoff also notes, “In reaching out to climate scientists to sign on, we feel that we’d need to give them some firmer grounding for believing that a federal investigation under the RICO statute is warranted – enough so that they’d be able to explain their rationale for signing to reporters and others. As you know, deception/disinformation isn’t itself a basis for criminal prosecution under RICO. We don’t think that Sen Whitehouse’s call gives enough of a basis for scientists to sign on to this as a solid approach at this point.” Maibach responds to Frumhoff that “Shukla has been consulting with lawyers so it is possible that – with their input – we too may decide that Senator Whitehouse’s proposal is not viable.” Seeking legal counsel, Maibach contacted a friend at Occupational Health and Safety Administration (OSHA), who told him that the odds of getting the Department of Justice (DOJ) to investigate under RICO were “slim to none.” Maibach then emails Shukla, saying, “Perhaps it would be best if we first found a lawyer with RICO experience to give us an independent opinion on the basis – or lack thereof – of a RICO investigation. If there really is no basis, then I feel we would be unwise to engage other scientists in recommending a baseless action. Do you know of anyone with RICO experience?” In another email, Mark Cane from Columbia Earth Institute writes to a group of scientists as well as a Sheldon Whitehouse staffer explaining, “I do have misgivings about invoking RICO, which may too easily lead to civil liberties abuses.” #3. Senator Whitehouse was emailing with activists, too There is even an email in the batch from Senator Sheldon Whitehouse (D-RI), who has been spearheading the RICO campaign in Congress. Whitehouse states, “So we’re all clear: the tobacco case was a CIVIL RICO case, not criminal, so jailing and imprisoning have nothing to do with it. Just a forum where you can’t lie and can be cross-examined in front of a neutral judge. And the govt won fair and square and soundly, just as I believe they would here.” #4. Activists warned: “You’re talking about prosecuting conservatives” Maibach contacted Alex Bozmoski of RepublicEN , which describes itself as a group of conservatives concerned about climate change, about his letter as well. Bozmoski tells Maibach his draft “screams hard-core left” and warned him that he’s “talking about prosecuting conservatives.” #5. Surprise! More Rockefeller funding After a media firestorm ensued from the letter, Maibach contacted Jeff Nesbit of an environmental communications firm called Climate Nexus to ask for help. According to its website , Climate Nexus is “a sponsored project of Rockefeller Philanthropy Advisors, a 501(c)3 organization.” In other words, the folks spearheading this letter were also getting communications support from a group that is bankrolled by the same funders (the Rockefellers ) pouring millions into the organizations aggressively pushing the #ExxonKnew narrative. The e-mail chain below shows Maibach stonewalling an interview request from Fox News and forwarding the Fox producer’s e-mail to Chris Mooney of the Washington Post (sort of a no-no in this business). To wit: InsideClimate News has repeatedly cited its own work as the impetus that prompted Schneiderman’s probe, in addition to several other actions taken by Democratic politicians. So eager were they to take credit, they cited the actions in the cover letter attached to their Pulitzer Prize submission as justification for why they deserved to win the Prize (they didn’t). What this latest batch of emails show is that Schneiderman and activist groups were colluding to lay the groundwork for the climate RICO investigations long before the ICN and Columbia School of Journalism stories ever hit. http://everythingshale.com/news/2016/may/17/new-foia-d-emails-tell-a-very-different-story-about-how-ny-ag-s-rico-campaign-started-off/ http://everythingshale.com/news/2016/may/17/new-foia-d-emails-tell-a-very-different-story-about-how-ny-ag-s-rico-campaign-started-off/ Tue, 17 May 2016 06:31:51 http://everythingshale.com/news/2016/may/16/the-future-of-bioenergy-is-in-this-book-less-library/ The Bioenergy Feedstock Library contains no books. What it does contain is information about biomass — organic material such as corn stover, switchgrass, wood chips and wheat straw. Nearly 50,000 biomass database entries and more than 35,000 physical samples reside in a repository located at the Department of Energy's Biomass Feedstock National User Facility . The library got its start in 2009, when Idaho National Laboratory lab technician Marnie Cortez got a strange assignment: Go to an eastern Idaho field and organize hundreds of boxes of biomass. There were cargo containers full of biomass samples,†she said. The samples came from efforts to develop new technologies that turn raw biomass into processed material — called feedstock — that is easily stored, transported and converted into renewable energy. Over the next few years, the samples and database became known as the Bioenergy Feedstock Library, and Cortez got a new title: librarian. Now, the library is taking another leap forward. Upgrades are turning it into a global research and development tool. The Energy Department estimates that by 2030, the U.S. could produce 1.1 billion tons of biomass for energy production, enough to offset 30 percent of the nation's current petroleum needs.   But complex technical challenges stand in the way of turning that possibility into reality. One culprit stands out: variability. Two bales of corn stover harvested from the same field may have vastly different chemical and physical characteristics. These differences — moisture or ash content, for example — cause headaches for bioenergy developers, including inconsistent particle sizes, clogged augers and problems during conversion. The library is an extensive source of information for researchers attempting to solve such challenges, for example, by developing new biomass processing technologies to make bioenergy feedstocks more consistent. Processing can include drying, chemical treatments and forming biomass into pellets.   Researchers often investigate samples at each step in the process to learn more about their chemical and physical properties. The library offers searchable access to data from these intermediate samples and the ultimate end product. The resulting information can help industry pinpoint the cause of problems. For example, one bioenergy company recently complained that its mills had a significantly shorter operational lifetime than anticipated. A quick search of the library's database revealed that the company's feedstock contained high amounts of silica, also known as quartz, which was wearing down parts of the mill. Without the library, such a diagnosis may have taken months and cost thousands of dollars. But its real power is accessibility. Recent mobile upgrades let researchers upload and securely manage data from anywhere. Powerful data management tools help them perform big-picture analyses using information from multiple data sets. The library contributes to the research of industry partners, universities and collaborators at Energy Department’s National Renewable Energy Laboratory, Pacific Northwest National Laboratory, Joint BioEnergy Institute and Sandia National Laboratories. And its potential for expansion is vast. More partnerships mean more data. More data means researchers can address larger and larger questions. And that's a great thing for the future of bioenergy. http://everythingshale.com/news/2016/may/16/the-future-of-bioenergy-is-in-this-book-less-library/ http://everythingshale.com/news/2016/may/16/the-future-of-bioenergy-is-in-this-book-less-library/ Mon, 16 May 2016 16:00:22 http://everythingshale.com/news/2016/may/16/natural-gas-climate-and-new-york-infrastructure/   We've written a number of posts recently on U.S. climate gains from increased use of clean-burning natural gas (see here , here and here ). Domestic natural gas is the main reason the U.S. is leading the world in reducing carbon emissions underscored by government data this week showing that energy-related emissions in 2015 were 12 percent lower than 2005 level .  Yet, some continue to miss the role natural gas is playing in U.S. climate progress. Instead of declaring victory, some continue to rally, protest and campaign against natural gas and its infrastructure opposing the very thing that is achieving what they want . Unfortunately, they're impacting public policy along the way. Nowhere is there a better illustration of this negative impact than in New York state. Last month state officials rejected the Constitution natural gas pipeline , proposed to bring natural gas from neighboring Pennsylvania (where safe natural gas development goes on) to a number of counties on the Southern Tier of New York (where safe development is banned). API New York Executive Director Karen Moreau talked about damage from the Cuomo administration's decision to New Yorkers, state businesses and climate progress during a conference call with reporters . Moreau: The state made a politically motivated, shortsighted decision to support those who believe it advances their climate agenda. Yet, natural gas is lowering emissions. You can't grow the use of renewables without natural gas as base load, and the governor's own energy plan assumes significant growth in natural gas use, but we can neither produce it nor transport it here.†Moreau said increased use of natural gas in the power sector the U.S. Energy Information Administration says this year, for the first time ever, natural gas will be the No. 1 fuel for generating electricity is a leading reason U.S. energy-related carbon emissions are near 20-year lows. New York's emissions dropped 24.5 percent between 2005 and 2013 , and New York City has its cleanest air in 50 years largely due to increased natural gas use. Yet, she said the governor's policies could make gas more costly and difficult to obtain for a state that has the eighth highest electricity prices in the nation . Moreau: Despite being a day's drive away from Pennsylvania's ample natural gas supplies, Northeastern states make up five of the top 10 states for highest retail electricity prices. Governor Cuomo has banned New York families and businesses from the benefits of accessing our own state’s energy resources through hydraulic fracturing, and now we're banned from building the pipelines we need to get energy from other states. As the rest of the nation enjoys the economic benefits of the shale energy revolution, Gov. Cuomo's policies have sealed New York off from job growth and affordable energy.†Natural gas-fueled power projects account for 56 percent of New York's generating capacity and more than 70 percent of all proposed generating capacity for the state is natural gas or dual fuel power projects. But the Cuomo administration is turning its back on infrastructure that's needed to help meet those fuel needs. And, again, it's the energy that's primarily responsible for cutting carbon emissions. Moreau: Renewable energy sources have a role to play in our power mix, but pitting them against natural gas sets up a false choice. In reality, renewables and natural gas work together, with natural gas providing reliable power when the wind doesn't blow and the sun doesn't shine. According to the U.S. Energy Information Administration, even under the most optimistic scenarios for renewable energy growth, oil and natural gas will still supply 60 percent of U.S. energy needs by 2040 .†America's energy revolution is making clean-burning natural gas abundant and affordable. There's no question that its increased use is leading the way in reducing carbon emissions in the U.S. while also lifting the economy, benefiting consumers with lower energy costs and increasing U.S. security. To harness America's natural gas abundance, pipelines and other infrastructure projects must be built which means rejecting the anti-energy, anti-progress agenda of a few so that U.S. energy's benefits can reach the many. By Mark Green Originally posted May 10, 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/may/16/natural-gas-climate-and-new-york-infrastructure/ http://everythingshale.com/news/2016/may/16/natural-gas-climate-and-new-york-infrastructure/ Mon, 16 May 2016 09:00:44 http://everythingshale.com/news/2016/may/16/us-refiners-feel-the-pinch-of-renewable-fuel-standard-costs-fuel-for-thought/ Smaller US refiners unable to blend their own gasoline are facing higher RIN costs which are eating into refinery operating costs, as the renewable fuels volumes breech the E10 blendwall. The US Environmental Protection Agency (EPA) in November mandated the amount of renewable fuels to be used in 2016 to 18.11 billion gallons, which is 10.10% of the year’s expected transportation fuels production. “Since the new volumetric announcement on November 30 last year RINs prices have almost doubled,” said CVR CEO Jack Lipinski on the first quarter earnings call April 28. As the majority of gasoline sold in the US is 10% ethanol, it leaves smaller refiners or those without blending capability on the hook to buy RINs, or Renewable Identification Numbers, which are credits which will allow them to make up the difference. CVR has two refineries, a 115,000 b/d refinery in Coffeyville, Kansas, and a 70,000 b/d plant in Wynnewood, Oklahoma. During the first quarter, the two plants produced 105,878 b/d of gasoline. Ethanol RINs for 2016, which traded at 54.5 cents/gal on November 30, jumped to 85 cents/gal on December 1, Platts assessments showed. Last week, they were trading in the range of 74.75 cents/gal. CVR’s first quarter ethanol RIN cost was $43.1 million as compared to $36.6 million in the first quarter of 2015. So far second quarter ethanol RINs have averaged 73.38 cents/gal, compared with the 61.52 cents/ gal average last year when refiners were mandated to use only 16.93 billion gallons of renewable fuels. “The RINs market is very opaque, it creates winners and losers and it’s doubtful that it incentivizes additional blending as the EPA has said on many of occasions,” he added. Refiners are given on a yearly basis individual volumes of renewable fuels they have to blend into the gasoline and diesel they produce, as mandated by the Energy Policy Act of 2005. RINS A CONCERN FOR 2016 Inland refiner HollyFrontier had $46 million of RINs expense in the first quarter of 2016, and is likely to go into the $50 million/quarter range as their carryover from last year dries up. HollyFrontier reported first quarter income of $21.3 million, considerably below the $226.9 million earned in the first quarter of 2015, with lower refining margins and costs associated with blending ethanol and purchasing RINs to comply with the RFS mandate as major reasons for the drop. “RINs are a concern,” said HollyFrontier CEO George Damiris on the first quarter call May 4. HollyFrontier has five refineries located in the Midcontinent and Rockies regions. These include a 115,000 b/d El Dorado, Kansas, refinery; a 155,300 b/d Tulsa, Oklahoma, refinery; a 102,000 b/d Artesia, New Mexico,  refinery; a 47,000 b/d Cheyenne, Wyoming refinery; and a 25,500 b/d Wood River, Utah, refinery. “During the quarter, costs associated with blending ethanol and purchasing RINs to comply with the RFS mandate had a significant impact as a proportion of earnings,” Damiris said. “The EPA’s intending to hit if not exceed the blend wall. But also their desire is to dry up the pool of RINs that are available for refiners to carry over from year to year,” he added. This will force refiners like HollyFrontier to pay more for RINs going forward the the pool of available RINs will shrink or blend more ethanol. Refiners are able to carry over a percentage of RINs from a previous year to apply to the current year’s liability. “Ethanol this quarter was a big deal, as you can imagine with the lower crude price in the quarter” he said. During the first quarter, ethanol in the mid-continent was priced at 30 cent/gal premium gasoline, which resulted in a $36 million negative impact on HollyFrontier’s first quarter earnings. Rising demand from increased driving is narrowing the spread between ethanol and gasoline. In Chicago, pipe ethanol was priced at $1.53/gal on Wednesday, while unleaded 87 was $1.52/gal, Platts assessment data showed. Ethanol blending was lower last week, Energy Information Administration data showed. EIA data shows that conventional gasoline blended with fuel ethanol fell across the nation by 47,000 b/d to 5.753 million b/d for the week ended May 6, while reformulated gasoline blended with ethanol fell 120,000 b/d to 3.187 million b/d. The post US refiners feel the pinch of Renewable Fuel Standard costs: Fuel for thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/16/us-refiners-feel-the-pinch-of-renewable-fuel-standard-costs-fuel-for-thought/ http://everythingshale.com/news/2016/may/16/us-refiners-feel-the-pinch-of-renewable-fuel-standard-costs-fuel-for-thought/ Mon, 16 May 2016 01:47:44 http://everythingshale.com/news/2016/may/14/bill-mckibben-fails-to-draw-big-crowd-or-prominent-democrats-for-breakfreeco-protest/ National activist groups looking to revive their struggling ban-fracking agenda failed to draw a big crowd or support from Colorado’s Democrat elected officials for their Break Free CO rally, despite a headline speech from activist celebrity Bill McKibben. Moments before catching a town car and a flight to Los Angeles to lead another protest alongside San Francisco billionaire environmental activist Tom Steyer, the 350.org co-founder addressed the scant crowd of less than 100 activists. McKibben rushing to his L.A. appearance with billionaire environmental activist Tom Steyer McKibben’s appearance only drew one member of Colorado’s legislature with seemingly no other state elected officials in attendance. And perhaps most telling of how extreme these groups have become, even Rep. Jared Polis (D-Colo.), a past ally of McKibben’s and past supporter of anti-fracking initiatives was nowhere to be seen at the event. State Rep. Joe Salazar was the lone Colorado elected official in attendance The lack of interest in his appearance comes after organizers boasted to the media of their “goal to draw 1000 people” to the upcoming events and promoted the gathering as one of the “largest” events of its kind in state history. From the Break Free Colorado website : “This is going to be one of the largest mass mobilizations for climate action in the history of Colorado . It is part of a global wave of powerful grassroots actions. Here in Colorado, we are taking action to defend our communities from the dangers of fossil fuel extraction on our lands. We are sending a strong message to our state leadership that we must break away from fracking our public lands and communities! Together, we can be a powerful voice for the just transition to a 100% clean energy economy!” (Emphasis added) The event in an open space area in Thornton looked pretty sparce with activists’ booths, information kiosks, banners and signs seemingly outnumbering actual attendees. It should come as no surprise that Coloradans were not very receptive of McKibben’s extreme anti-fossil fuel message. In fact, recent polling has shown that “majorities of Republicans (95 percent), Independents (84 percent) and Democrats (69 percent) say that producing more oil and natural gas here in the U.S. is important to them.” Clearly Bill McKibben’s anti-fossil fuel agenda is simply too extreme for Colorado. http://everythingshale.com/news/2016/may/14/bill-mckibben-fails-to-draw-big-crowd-or-prominent-democrats-for-breakfreeco-protest/ http://everythingshale.com/news/2016/may/14/bill-mckibben-fails-to-draw-big-crowd-or-prominent-democrats-for-breakfreeco-protest/ Sat, 14 May 2016 13:13:30 http://everythingshale.com/news/2016/may/13/starupdatestar-eia-fracking-is-driving-dramatic-reductions-in-us-co2-emissions/ UPDATE  (5/13/2016, 5:00 pm) Additional data released by the EIA today shows that Carbon dioxide emissions from electricity generation in 2015 were lowest since 1993.  Similar to other reports, this data indicates that, “A shift on the electricity generation mix, with generation from natural gas and renewables displacing coal-fired power, drove the reductions in emissions.” It is thanks to a boom in domestic production, and the fracking that made it possible, that so much natural gas is available at a reasonable price for this electricity generation. — Original Post May 10, 2016 — Increased natural gas production from fracking is driving a dramatic drop in American carbon dioxide (CO2) emissions since 2005, according to new data from the Energy Information Administration (EIA). EIA found that CO2 emissions have fallen by 12 percent since 2005 and estimates that 68 percent of that drop can be attributed to increased natural gas usage. The report attributes CO2 emissions reductions due to an “increased use of natural gas for electricity generation.” From the report : “The reductions in CO2 emissions are spread out among the different end-use sectors in proportion to the share of total electricity sales to each sector. Overall, the fuel-use changes in the power sector have accounted for 68% of the total energy-related CO2 reductions from 2005 to 2015.” (Emphasis added) The relationship between decreasing CO2 emissions and fracking has already been noted by the Intergovernmental Panel on Climate Change (IPPC), the International Energy Agency (IEA), President Obama , EPA Administrator McCarthy , and Secretary of Energy Ernest Moniz .  Even anti-fracking groups like the Sierra Club have admitted that natural gas plays a key role in decreasing U.S. emissions, as it noted last year: “We project that as a result of recent coal retirements, as well as advocacy for related policy measures like efficiency and demand response and market forces including historically low natural gas prices , electric sector coal use in 2015 will be approximately 9 percent lower than in 2014.” (Emphasis added) The EIA’s latest report is simply the most recent testament to the climate benefits of fracked natural gas. http://everythingshale.com/news/2016/may/13/starupdatestar-eia-fracking-is-driving-dramatic-reductions-in-us-co2-emissions/ http://everythingshale.com/news/2016/may/13/starupdatestar-eia-fracking-is-driving-dramatic-reductions-in-us-co2-emissions/ Fri, 13 May 2016 15:32:40 http://everythingshale.com/news/2016/may/13/noaa-study-bakken-methane-emissions-much-lower-than-previously-thought/ On the same day the Obama administration finalized methane regulations on new and modified oil and gas infrastructure, a new National Oceanic and Atmospheric Administration (NOAA) study was released illustrating one of the reasons the rules have been highly criticized. The study finds methane emissions from the Bakken region are lower than previously believed. And not only are they significantly lower than a 2014 satellite study  that anti-fracking activists touted, they are also far lower than previous EPA estimates, according to the researchers’ own assessment and EID research. From the NOAA press release on the study: “The Bakken oil and gas field is leaking a lot of methane, but less than some satellites report, and less than the latest Environmental Protection Agency inventory for petroleum systems , according to the researchers’ calculations.” The researchers claimed that their data were only “slightly lower” than EPA’s but the researchers appear to be making that statement using 2013 EPA methane emission estimates, which were the latest available at the time the study was conducted. But the EPA has since release drastically upwardly-revised methane emissions data for 2014 – and when that latest data are used, the EPA’s overestimation is more pronounced: EPA’s latest estimates are 1.625 mmt CO2 eq. more than the NOAA study. The math works like this: The study finds that annual methane emissions in the Bakken are 275,000 tons, which equates to 6.875 million metric tons CO2 equivalent. The researchers calculated the Bakken’s share of the 2013 nationwide inventory data based on the percentage of national production from the Bakken (12.5 percent in 2014), finding their emission estimate was lower than EPA’s. EPA only reports petroleum system emissions at the national level. The EPA is now claiming methane emissions for petroleum systems were 68.1 mmt CO2 eq. in 2014. Assuming for a moment the latter figure is correct, one can apply the researchers’ proportional calculations (12.5 percent) and find 8.5 mmt CO2 eq. of that 68.1 mmt is attributable to the Bakken. So this study, conducted by the same researchers responsible for a recent ethane-focused study that hinted previous methane emissions from the Bakken shale may have been exaggerated, confirms that is indeed the case. This fact further calls EPA’s highly questionable upward revisions of methane emissions in its latest Greenhouse Gas Inventory into question, considering they have been used to justify their new regulation on oil and natural gas systems. In case you missed it, EPA data had previously consistently shown methane emissions plummeting as natural gas and oil production has soared. EPA’s revisions were most drastic in the petroleum sector, as emissions from petroleum systems increased 2 ½ times from previous estimates.  But as EID reported recently , EPA made a number of dubious assumptions, including the fact that the agency assumed that smaller sources emit the same amount of methane as larger sources.  In other words, new study confirms what many have suspected: EPA’s new data – which is based on some faulty new methodology – are very likely exaggerated. Previous estimates of Bakken methane emissions have also been based on a recent satellite study, which found suspiciously high emission rates, and as EID noted had no way to account for the fact that several areas of the United States, with absolutely no oil and gas production, had increasing methane emissions, while areas with oil and gas development had lower emissions. That study has long been trotted out by fracking opponents as evidence the Bakken is largely responsible for assumed increases in U.S. methane emissions from petroleum systems. The NOAA researchers noted the satellite study “warrants further examination” and concludes, “We conclude the exceptionally high atmospheric loss rate of CH4 reported by Schneising et al. [2014] for 2009–2011 is inconsistent with our airborne data from May 2014.” Data inconsistent with previous studies? Early headlines have focused on the 275,000 tons of emissions per year found in the NOAA study but that figure seems to contradict a finding made in the researchers’ previous study. That ethane-focused study the same researchers released last month claimed to find 250,000 tons of annual ethane emissions in the Bakken and stated that the ratio of ethane to methane detected was 5:2, according to a Washington Post article : “They found that the ratio of ethane to methane produced by the Bakken was much higher than what has been observed in many other shale oil and gas fields in the United States — an observation that could have big implications for future methane assessments, which are important for climate scientists. “In many oil and gas fields, methane is often the primary natural gas present — sometimes accounting for up to 90 percent or more of the gas that is released during extraction. Ethane often tends to be present in smaller proportions.  In the Bakken, however, the researchers found that ethane accounted for nearly 50 percent of all the natural gas composition, while methane was closer to 20 percent .” So applying the simple math here, considering the researchers found methane emissions are roughly 30 percent less than ethane emissions in the Bakken, one would think their methane estimate would be closer to 175,000 tons than 275,000 tons annually. This is an inconsistency that requires explanation. Nevertheless, the research still clearly indicates that methane emissions in the Bakken are much lower than the alarmists have claimed – and as North Dakota Department of Health Environmental Health Section chief Dave Glatt told The Associated Press the problem is not “widespread.” As this study shows, past methane emission estimates from the Bakken were very likely exaggerated.  Considering EPA’s recent drastic upward revision of methane emissions has already raised eyebrows for making unfounded assumptions – this study further calls the agency’s methods into question on the day that it unveiled its new methane regulations on the oil and gas industry. http://everythingshale.com/news/2016/may/13/noaa-study-bakken-methane-emissions-much-lower-than-previously-thought/ http://everythingshale.com/news/2016/may/13/noaa-study-bakken-methane-emissions-much-lower-than-previously-thought/ Fri, 13 May 2016 13:55:53 http://everythingshale.com/news/2016/may/13/ban-fracking-not-if-we-want-to-meet-global-energy-needs/ This week, the U.S. Energy Information Administration (EIA) released its annual International Energy Outlook , predicting international energy trends and demand through 2040. The report projects global energy use will increase 48 percent by 2040 and that liquid fuels (i.e. mostly oil) and natural gas will be the number one and number two sources of energy, respectively.  Of course, there’s no way to meet that demand without fracking so this is a pretty big wake up call for activists pushing the “Keep-It-In-The-Ground” agenda. According to the report, consumption of natural gas worldwide is expected in increase from about 120 trillion cubic feet (Tcf) in 2012 to 203 Tcf in 2040 – an increase of almost 70 percent. As the report states fracking is essential to meet that need: “The application of horizontal drilling and hydraulic fracturing technologies has made it possible to develop the U.S. shale gas resource, contributing to a near doubling of estimates for total U.S. technically recoverable natural gas resources over the past decade.” The report continues, “ Shale gas accounts for more than half of U.S. natural gas production in the IEO2016 Reference case , and tight gas, shale gas, and coalbed methane resources in Canada and China account for about 80% of total production in 2040 in those countries.” (Emphasis added) Worldwide consumption for liquid fuels (such as petroleum) produced from crude oil is set to soar as well. According to the report, global consumption of petroleum and other liquid fuels is projected to increase from 90 million barrels per day (b/d) in 2012 to 121 million b/d in 2040. Much of this demand will stem from Asian countries, specifically China, although the United States will continue to be the largest consumer of liquid fuels in the Organization for Economic Co-operation and Development (OECD) through 2040. With EIA’s prediction that oil and natural gas will be the top two sources of energy worldwide by 2040, the role of fracking in global energy production will only increase. This directly contradicts the absurd notion pushed by anti-fracking activists who claim we can ban fracking without significant global repercussions, as fracking will be necessary to meet global oil and natural gas demand. In the United States alone, fracking accounts for 67 percent of natural gas production , up from 7 percent in 2000. In addition to an increase in demand for natural gas, the report also predicts a substantial increase in natural gas production in the U.S. – a 49 percent increase from 2012 to 2040 – making it the largest producer among OECD countries. In fact, the United States is projected to account for the over two-thirds of the region’s total natural gas production growth, with production from fracking contributing the vast majority of this growth. According to the report: “U.S. shale gas production grows from 10 Tcf in 2012 to 20 Tcf in 2040, more than offsetting declines in production of natural gas from other sources. In 2040, shale gas accounts for 55% of total U.S. natural gas production in the IEO2016 Reference case, tight gas accounts for 20%, and offshore production from the Lower 48 states accounts for 8%.” Thanks to fracking unlocking this wealth of natural gas in the United States, the EIA predicts natural gas imports to the U.S. will decline over the next few years and the country will instead become a net exporter. As the report mentions: “In the United States, rising domestic production reduces the need for imports, primarily as a result of robust growth in regional production of shale gas. The United States becomes a net exporter of natural gas in 2017, with net exports growing to 5.6 Tcf in 2040.” It’s no surprise global demand for natural gas is increasing rapidly as the resource is not only cheap and abundant thanks to technologies like fracking; it’s also a more energy efficient than other traditional sources of fuel. This efficiency means natural gas is expected to continue playing a vital role in energy intensive sectors such as power generation. The report notes : “Natural gas remains a key fuel in the electric power sector and in the industrial sector. In the power sector, natural gas is an attractive choice for new generating plants given its moderate capital cost and attractive pricing in many regions as well as the relatively high fuel efficiency and moderate capital cost of gas-fired plants.” In addition, natural gas is less carbon intensive than other sources of fuel. Just this week the EIA published a report about how CO2 emissions in the U.S. have fallen by 12 percent since 2005 , with much of that decline coming from the increased use of fracked natural gas. The International Energy Outlook 2016 echoes this sentiment, stating: “Additionally, as more governments begin implementing national or regional plans to reduce carbon dioxide (CO2) emissions, natural gas may displace consumption of the more carbon-intensive coal and liquid fuels.” It’s not just U.S. natural gas production benefiting from fracking, but also oil production. Fracking allows U.S. producers to reach massive oil reserves that they were previously unable to, helping make the United States the world’s largest producer of petroleum in 2014. EIA expects the United States to remain a dominant player in the production of this “tight oil”, produced through fracking, with U.S. tight oil production more than doubling from 2012 levels by just 2020. For all these reasons, it’s no wonder the “Keep It in the Ground” campaign, which seeks to ban all fossil fuel production, has been criticized for being “naïve” by the U.S. Secretary of the Interior Sally Jewell and “ completely impractical ” by Obama’s former advisor John Podesta. As this report shows, oil and natural gas – and specifically U.S. oil and natural gas produced through fracking – will play an increasingly vital role worldwide for years to come. http://everythingshale.com/news/2016/may/13/ban-fracking-not-if-we-want-to-meet-global-energy-needs/ http://everythingshale.com/news/2016/may/13/ban-fracking-not-if-we-want-to-meet-global-energy-needs/ Fri, 13 May 2016 10:30:27 http://everythingshale.com/news/2016/may/13/saving-energy-and-money-texas-is-on-a-path-to-greater-efficiency/ Three of the top five fastest growing cities in the country are here in Texas , and explosive population growth puts a lot of pressure on our electric grid to keep up with demand. Fortunately, the state's main grid operator, Electric Reliability Council of Texas (ERCOT), has done a great job of keeping the lights on, and new building codes are ensuring less energy use in the thousands of new houses that are being constructed. As more and more people flock to the Lone Star State, there is significant potential for energy efficiency to reduce pollution and energy bills for Texas families. But in a report  released last October, ERCOT overestimated the cost of energy efficiency in Texas by more than two times and understated by about seven times the amount we are on track to achieve. ERCOT's estimates do not acknowledge Texas' reality: Energy efficiency, and other sources of clean energy, are already on the rise.  ERCOT's energy efficiency cost predictions don't add up The ERCOT report aimed to assess what the Clean Power Plan which sets the nation's first-ever limits on carbon pollution from power plants would mean for Texas' electric makeup. In the plan, each state is empowered to develop an individualized, flexible state plan to meet its carbon reduction goals. Although recent action from the Supreme Court temporarily paused the enforcement of the Clean Power Plan's deadlines while the courts review it, EDF remains confident the framework rests on rock-solid legal and scientific footing. Texas leaders should move forward with compliance planning in order to maximize the benefits of clean electricity and be in the best position to comply once the Clean Power Plan is upheld. Saving Energy and Money: Texas is on a Path to Greater Efficiency CLICK TO TWEET To determine the Clean Power Plan's impacts, ERCOT used various potential pathways, or scenarios,†for compliance in its report. In all four scenarios highlighted in its press release , the grid operator assumes energy efficiency savings during 2013-2030 that aggregate to only one percent of the state's retail electricity sales by 2030. But one percent does not reflect the significant efficiency progress already underway in Texas. (Nor does it line up with a separate ERCOT study, in which long-range planners predict energy efficiency will lower overall demand by 3.5 percent by 2031 , based solely on existing trends.) In actuality, state building codes and existing utility programs already in place will add about seven percent savings in 2030 (see table below). This higher estimate lines up nicely with one scenario in ERCOT's report, which assumes seven percent energy efficiency savings. However, ERCOT largely dismisses this realistic pathway because it predicts a massive energy efficiency price tag: $31 billion in gross costs or initial investments by 2030. ERCOT cites an EPA source to reach its $31 billion estimate, but this source examines a very narrow set of energy efficiency measures that don't reflect the broader and far more cost-effective suite of energy efficiency opportunities that exist in Texas. We believe ERCOT should use its own intimate knowledge and expertise on Texas' electricity landscape to examine efficiency opportunities, as well as others in Texas that have expertise in this area. We believe ERCOT should use its own intimate knowledge and expertise on Texas' electricity landscape to examine efficiency opportunities, as well as others in Texas that have expertise in this area. Regardless, deeper digging into the upfront costs in Texas reveals that ERCOT overshoots gross costs more than two times over they are actually $14.1 billion over 18 years. That's no small difference: Imagine if you were buying a car and the dealer tried to sell it to you for $45,000 rather than its real price of $20,000. Plus, these costs are attributable to utility programs and building codes that are already on the books even without the Clean Power Plan. That means Texas should get to seven percent energy efficiency with zero additional costs attributable to compliance with the Clean Power Plan. And recent research sponsored by SPEER , the Southcentral Partnership for Energy Efficiency as a Resource, confirms reduction in consumption of as much as 10 percent of 2030 demand could be achieved with relatively modest program changes. Moreover, ERCOT's decision to only take into account the initial investment price is misleading, because energy efficiency yields savings year after year that offset the upfront investment. Indeed, people and businesses save money from investments in energy efficiency because ultimately it provides savings beyond the cost. For example, if you spend $1,000 to insulate your attic and save $200 per year in lower heating and cooling bills, after five years, the continued savings are money in your pocket for the life of the home. Similarly, the Lone Star State's energy efficiency savings of seven percent would provide customers more than $5 billion in net savings over and above initial costs by 2030. (To understand how we reached these conclusions, please see our guide here .) SPEER's research also indicates that undertaking a more aggressive energy efficiency posture would put downward pressure on energy prices, while avoiding the need to upgrade transmission and distribution infrastructure as well. Our results echo a common theme among robust analyses from the world's most reputable organizations on the subject: energy efficiency is an extremely cost-efficient energy resource. According to the major private investment firm Lazard, energy saved as a result of energy efficiency investments are realized at an average cost of 0-5 cents/kilowatt hour (kWh), making it by far the cheapest energy resource . The American Council for an Energy-Efficient Economy (ACEEE) finds the cost in Texas is 2.6 cents/kWh, and robust analyses from other world class think tanks, such as Lawrence Berkeley National Laboratories, lead to similar conclusions . Yes, implementing energy efficiency entails upfront costs, but so does building conventional power plants. ERCOT's report significantly overestimates how much money seven percent energy efficiency would require, and doesn't acknowledge the savings to be realized. In sum: The initial efficiency costs less than half of ERCOT's predictions ultimately will result in $5 billion in net savings, all happening under business as usual. The Clean Power Plan further encourages the growth of energy efficiency with Texas standing to reap the rewards. In its October 2015 report, ERCOT said, Energy efficiency is a potentially cost-effective method for Clean Power Plan compliance.†We couldn't agree more. Even on its own, efficiency is a cost-effective means of reducing pollution, waste, and electricity bills. It's time to recognize the unprecedented energy efficiency opportunity at hand so all Texans can have a cleaner, healthier state. By  Robert King, Southcentral Partnership for Energy Efficiency as a Resource, Peter Sopher and John Hall, Environmental Defense Fund Originally Published on May 11, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/may/13/saving-energy-and-money-texas-is-on-a-path-to-greater-efficiency/ http://everythingshale.com/news/2016/may/13/saving-energy-and-money-texas-is-on-a-path-to-greater-efficiency/ Fri, 13 May 2016 09:00:35 http://everythingshale.com/news/2016/may/13/ebols-fact-fiction-and-future/ Remember the not-so-good-old-days when most of our time was consumed by long paper trails and error-filled BOLs? They got damaged. They were late. They got lost. They were difficult to read and easy to misread. Not to mention, there was no efficient way to share the data. The eBOL (Electronic Bills of Lading) is a welcomed evolution in the petroleum marketing world. It’s crystal clear As our industry became more complex, the need for greater, more sophisticated reporting grew. It is crystal clear that eBOLs are the preferred answer to tackle such inadequacies. Doing business electronically has become a critical point for refined fuel marketers, retailers and wholesalers alike. Electronic data not only increases efficiencies, it also ensures greater accuracy. As the method was defined, eBOL refinement became the next focus. eBOLs have developed over the past several decades to accommodate changes in the petroleum sector and the specific needs of marketers, retailers and wholesalers. Some of the early challenges involved data-rich eBOLs and their inability to serve as a lasting, beneficial and useful tool to all parties involved. Each “round” prevailed with new features, as gaps were addressed.   Accuracy is critical In the United States, currently more than 300 petroleum marketers, including smaller organizations, are using eBOLs to automate their invoicing processes — and for good reason. The typical overhead cost to research and correct a single transaction error is $126. The consequence of forgoing eBOL systems can be costly. Seamless integration Digitizing the BOL isn’t a magic fix. For example, eBOLs arrive in hundreds of different formats and, depending on who you are doing business with, different information fields and naming conventions. This makes data integration with back office systems challenging. To help resolve these issues, Schneider Electric leveraged its decades of knowledge and relationships across suppliers, terminals, and customers to find a better solution. Through this effort, we created a platform that works regardless of format or complicated PIDX and SPLC codes, in order to provide a repository for industry eBOL data. Through the repository, we provide customers with the eBOL data they need, customized to how they need it, as fast as it can be delivered and without duplicates. The data can then be easily integrated into a customer’s accounting system, removing the need to deal with multiple formats and data-jargon. The capabilities are endless: accessing mailboxes, cross referencing, processing errors, overriding rules and “human-readable” documents that are self-explanatory and all-inclusive. A better way of business eBOLs aren’t going anywhere; they’ll only get better. Adoption of the new protocols can help enrich eBOL data and its use in the U.S. market. By doing business electronically, refined fuels marketers, retailers, and wholesalers can all realize the benefits of increased efficiencies and greater accuracy. eBOL data can also help reduce costly errors and re-bills, enhance your level of customer service, and support more profitable operations—making eBOLs a better way of business. Schneider Electric offers the leading eBOL solution on the market – DTN Fuel Admin.   Visit our website to find out more on how your operation can benefit. The post eBOLs: Fact, Fiction and Future appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/may/13/ebols-fact-fiction-and-future/ http://everythingshale.com/news/2016/may/13/ebols-fact-fiction-and-future/ Fri, 13 May 2016 08:16:42 http://everythingshale.com/news/2016/may/13/platts-crude-oil-summit-debunking-the-myths/ In Monty Python’s Holy Grail King Arthur tells the black knight that he has no arms left, to which the knight replies: “ It’s just a flesh wound .” This was how Standard Chartered’s Paul Horsnell described the so-called resilience of US shale production as he went on to critique commonly held views in the market. The robustness of US production is certainly an important question, not least for OPEC strategy, with Horsnell arguing a sharp rise in the rig count, which is at its lowest ever according to Baker-Hughes, is needed to stabilize output. Low prices have led to calls in the way the industry works. “No other industry would work backwards from the price of its output (in this case, hydrocarbons) in an attempt to justify the costs of its inputs (i.e. capital and operating costs),” said Allianz’s Chris Wheaton. He joked that the industry has often responded to underperformance with ‘it’s not our fault, the oil price did it,’ and he suggested the use of more technology appears to have increased costs and not cut them. Wheaton’s key message was that 21st century oil needs to be a manufacturing business: standardization, repetition and low unit costs become competitive advantages. “Shell has 24 shades of yellow underwater paint,” he added, highlighting the overly complex nature the industry needs to address. Moreover, Wheaton made the point that US shale is an example of poor capital allocation — everyone has capital with little differentiation and no requirement to a make a return on capital (or even return the capital). Shale will not ramp up as fast as it did in 2012-14 due to capital limitations and that the industry needs to deleverage. The swing producer debate — the ability of a supplier to raise output from spare capacity — was also a hot topic: Kuwait Petroleum Company’s Abdulaziz al-Attar said OPEC will still respond to demand, while US tight oil will respond to price. He added that OPEC will continue to defend market share until the market stabilizes, estimating OPEC’s share will rise to 41.1% in 2017, its highest level since 2012. Saudi Arabia will be reluctant to lose Asian market share to Iran and Iraq and that could put its ability as swing producer in doubt. Energy Aspects’ Amrita Sen suggested that non-OPEC supply outside the US could become a swing factor later this year. Horsnell also argued that the glut of oil has pretty much disappeared and that the rise in prices is not as speculative as many suggest, detailing the neutral positioning now in the market. Were there any more myths or Monty Python anecdotes? Maybe the famous dead parrot sketch in reference to OPEC will be at the next Platts summit. “ This parrot isn’t dead, it’s just resting .” The post Platts Crude Oil Summit: Debunking the myths appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/13/platts-crude-oil-summit-debunking-the-myths/ http://everythingshale.com/news/2016/may/13/platts-crude-oil-summit-debunking-the-myths/ Fri, 13 May 2016 05:00:24 http://everythingshale.com/news/2016/may/13/china-s-commodity-exchanges-capable-of-cooling-any-futures-trade-frenzy/ Roller-coaster game is the best metaphor to describe what has happened to China’s steel, coking coal, coke, and iron ore futures in the past two weeks where prices are concerned. And of course, not surprisingly, the exchanges — as the watchdogs — have contributed to the price fluctuation since over April 21-May 10. The Shanghai Futures Exchange (SHFE) and Dalian Commodity Exchange (DCE) both intervened a few times too during the past two weeks just to cool the trading frenzy in their respective rebar, hot-rolled coil and iron ore, coking coal and coke futures contracts, via  the means of raising the daily price fluctuation caps, transaction fees, margins, and blacklisting those individuals that have been too frequently opening and closing positions on the daily basis, blocking them from trading for one month. Besides, SHFE also shortened the night trading hours of rebar and HRC to 2100-2300 Beijing time starting May 3 from the original 2100-0100. This was welcomed by a Shanghai trader, saying, “Finally I can get some sleep instead of staying up late into the midnight.” The bourses have taken these steps after future prices of all the above commodities hit daily caps on April 21 amid high trading volumes. This concerned China’s central government, as it will inflate physical values and thus make it more difficult for Beijing to tackle overcapacity in the steel sector. “[The] Chinese economy is full of complexity nowadays, and it is a hard task to stabilize the economy while going through restructuring, under such circumstances, [the] futures market is supposed to help and serve the economy,” DCE said in a statement Monday. However, the frenzy of speculative trading in iron ore, coking coal, and coke futures — mainly by individuals — will only multiply the risks and expose investors to greater vulnerability, it added, confirming the Chinese market sources’ understanding. A Beijing-based iron ore trader felt the impact keenly. “No one had expected physical iron ore price to have swung by $10/dry mt in a few days to hit $70/dmt in late April, as fundamentals, changing little, are unlikely to have caused such dramatic moves. So, it has been because of the iron ore futures on DCE, as too many people are speculating on it,” she said. These emergency measures “have sent a strong message to investors, especially to individual investors, that recent price surges in steel-related futures are not welcome at all,” a Beijing-based steel analyst noted. He acknowledged many more individuals in China have jumped into iron ore and steel futures trading. The two exchanges’ cooling efforts have been effective so far — SHFE’s HRC trading volume, for example, dropped 15.1% day on day to 239,533 lots as of April 26, while that of DCE’s most popular September iron ore futures contract slumped 49% from April 21 to 3.3 million lots as of April 26, the exchanges’ data showed. Declines have been continuing in the past two weeks, and as of May 10, the Platts IODEX for 62% fines was assessed at $56.1/metric ton CFR North China, down 20.5% from April 21’s high, and the billet price in Tangshan, north China’s Hebei province, the barometer of China’s steel market, fell to Yuan 1,920/mt ($294.5/mt) as of May 10, down 27.3% or Yuan 720/mt from the recent high on April 21. The battle between speculative trading against the regulators’ intervention has illustrated explicitly that China’s futures market is yet to be 100% free-willed, and it will be under the close watch and surveillance to serve the “greater good” that is so full of Chinese characteristics. The post China’s commodity exchanges capable of cooling any futures trade frenzy appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/13/china-s-commodity-exchanges-capable-of-cooling-any-futures-trade-frenzy/ http://everythingshale.com/news/2016/may/13/china-s-commodity-exchanges-capable-of-cooling-any-futures-trade-frenzy/ Fri, 13 May 2016 00:01:17 http://everythingshale.com/news/2016/may/12/national-ban-fracking-activists-thirst-for-attention-in-colorado/ Anti-fossil fuel activists, facing losses across the country and desperate to keep their campaign alive, are deploying increasingly extreme tactics to drum up attention. Today’s protest outside a Bureau of Land Management sale of federal land for oil and gas leasing in Colorado featured the usual suspects, including Greenpeace, 350.org, Food & Water Watch, and Rainforest Action Network, which are part of a larger campaign to “ keep fossil fuels in the ground .” Not only is it becoming more and more obvious that these activists are outnumbered by the overwhelming majority of Coloradans who support oil and gas development, but their campaign has been rebuked by Colorado’s elected officials, business leaders, and editorial boards and called “ naïve ” by Department of the Interior Secretary Sally Jewell just last week. No wonder these activists are grasping at straws to keep their Colorado campaign alive. Members of several activist groups, including one from the New Mexico chapter of 350.org, turned out to protest a federal lease sale organized by the Bureau of Land Management in Lakewood, Colorado. The activists relied on gimmicks, such as a fog machine, to drum up attention. (Photo credit: Energy In Depth ) Busing protestors to Colorado, christened “ ground zero ” by national activist groups, is an old tactic used by national groups to ban fracking nationwide . So is creating localized chapters that masquerade as grassroots campaigns: Coloradans Resisting Extreme Energy Development, a group that the Greely Tribune has likened to a “toddler throwing itself on the floor, kicking and screaming in the hopes it will get its way,” is the most recent iteration of Washington, D.C.-based Food & Water Watch’s Coloradans Against Fracking and “ Don’t Frack Denver ” campaigns, both of which have fizzled out after a series of embarrassing missteps . Efforts by these groups to limit or ban oil and gas development in Colorado have drawn sharp criticism from elected officials , business leaders , and editorial boards across the state. Colorado’s Democratic governor, John Hickenlooper, recently condemned a ballot initiative pushed by activists attempting to increase setback distances in the state: “That would be considered a taking, and I think the state would probably be judged responsible, and I think the cost could be in the many billions of dollars. I think that’s a risk that most Coloradans — if it was laid out for them in a sense they could clearly understand — would not support it.” Gov. Hickenlooper’s predecessor, Bill Ritter – a Democrat who was also once hailed the nation’s “Greenest Governor” – said last month , “If you passed a national ban [on fracking], this industry would go away and it would be harder for us to get to our place of transition on clean energy and climate.” Their thoughts have been echoed, repeatedly, by editorial boards all over Colorado. Last year, the Denver Post published an editorial titled, simply, “Denver should ignore fractivists.” This year, the paper’s editorial board pointed out that banning oil and gas development, or making development impossible, would not only be an expression of “fervent anti-drilling ideology,” but would also violate property rights and the Fifth Amendment’s takings clause. Similarly, editors at the Greeley Tribune wrote earlier this year, “Outright bans on fracking would be devastating to our economy and are, honestly, unrealistic in a free market.” With 350.org co-founder Bill McKibben slated to appear at another “ban fracking” event in Colorado this weekend, we can only expect more arm-waving that threatens working families and  has no place in Colorado . http://everythingshale.com/news/2016/may/12/national-ban-fracking-activists-thirst-for-attention-in-colorado/ http://everythingshale.com/news/2016/may/12/national-ban-fracking-activists-thirst-for-attention-in-colorado/ Thu, 12 May 2016 19:14:47 http://everythingshale.com/news/2016/may/12/9-cool-technologies-at-the-bay-area-maker-faire/ At the Bay Area Maker Faire , the Department of Energy's National Labs are displaying some of their coolest technologies. The best part? You can look AND touch. Check out the photo gallery to see what's on display! Even if you can't attend the Bay Area Maker Faire in person, you can still get inspired about the science and technology driving our country forward. Follow along on Energy.gov/MakerFaire , Facebook and Twitter . We'll be sharing updates and broadcasting live using #MakeEnergy . http://everythingshale.com/news/2016/may/12/9-cool-technologies-at-the-bay-area-maker-faire/ http://everythingshale.com/news/2016/may/12/9-cool-technologies-at-the-bay-area-maker-faire/ Thu, 12 May 2016 16:00:55 http://everythingshale.com/news/2016/may/12/the-east-texas-basin-continues-to-surprise/ The East Texas Basin, a rather large Jurassic-Aged basin containing a number of hydrocarbon-bearing formations stretched across the northern part of East Texas and West Louisiana, has been making fortunes for mineral-rights owners, drillers, landmen and entrepreneurs since oil was first struck by Columbus Marion (Dad) Joiner (and his rather creatively-financed syndicate) on September 5, 1930 in Rusk County, Texas. Image Source: http://www.beg.utexas.edu/starr/ur_haynesville.php The initial focus of operations was the Woodbine  – a late-cretaceous formation which had abundant pressure and reserves across a five-county chunk of Northeast Texas to create plenty of gushers along the way and has produced 5.42 billion barrels of oil to date. A few very interesting asides about those early operations: The price of oil collapsed from 99 cents a barrel to 46 cents with the first year of operations. The drillers responded by producing more. During World War 2 the “ Big Inch ” pipeline delivered East Texas crude to Pennsylvania through its 24” diameter pipe. In 1960, some drillers working for Shell oil noticed fresh drilling mud coming up from their operations, and uncovered what ultimately turned out to be 380 “ slant-hole ” wells – wells that had been drilled directionally from adjacent leases into richer parts of the formation. More recently (the last decade or so) our attention has been focused on the incredibly gas-rich Haynesville Shale formation – a deeper, larger and older Jurassic-period formation that stretches across even more of the ArkLaTex region. The Haynesville has been very productive for horizontal hydraulic fracturing operations, and is very near the packaging and transport hubs on the gulf coast. Last month at OGIS I saw a great presentation from Memorial who are a pure play operator focused on the over-pressured Cotton Valley formation in Northern Louisiana. Among other interesting tidbits they presented, Since 2012, 95 of ~20,800 horizontal gas wells in the U.S. have peak monthly production over 21 MMcfe/d 36 of those were drilled by Memorial Memorial has drilled 68 wells in the top 2% of the ~20,800 horizontal wells (51 wells in the top 1%) Source: Company OGIS 2016 Presentation Well that really popped out at me – they’re bringing on some real boomers there. Normally we see a lot of emphasis on the gigantic Marcellus wells, but there’s a reason that the Louisiana portion of the East Texas Basin is still alive. (Memorial’s stock performed very well last week .) Then last week, as I was researching something else, I happened to glance at the “active rigs by basin” metric and saw that there are as many rigs operating in the East Texas Basin as are operating in the Niobrara (14 that day in each). Then I zoomed in on activity in the area and noticed there were even more rigs operating just outside the basin proper to the east and west. To be fair, portions of the Niobrara are proving to be fairly oily, which does make it a little more interesting to the Oil folks, but for the Oil & Gas folks I thought I should analyze the activity a little bit more. East Texas Basin Production Ok let’s take a quick look at production in the basin. On the left we see the counties with those early Woodbine wells – Gregg and Rusk in particular, have pretty sizable bubbles vs. the rest of the ArkLaTex. On the right, despite Panola counties dominance, we see fair amounts of gas having been produced throughout the area. Oh – those are parishes in Louisiana – not counties. Using another interface, combining oil and gas output (6:1 BOE) for the first 6 months of well production, and overlaying rigs, we see that whole basin is filled with opportunity. I’ve also overlaid current rig locations. Rig Activity Now lets zoom in a bit on recent rig activity. Two things really stand out in this view: Strong Clusters of Activity in De Soto Parish, and Lincoln Parish off to the East; and, Vertical Rigs are doing laps in Claiborne and Bienville Parish. And as we can see from our Drilled and Uncompleted Wells tool, operators appear to be storing production in place much as they are in the rest of the country. Permit Activity Since we saw such a nice focus of activity in De Soto Parish, let’s take a peek at their permitting for the past few years. We definitely see Q4 spikes each of these years, but overall activity looks to have only dropped around 5-10 permits per quarter. Total Depth has been creeping up steadily, and the few permits filed for Q2 so far are obviously for rather long spans. Midstream Takeaway As I mentioned earlier, the East Texas Basin operations are very close to market. It’s also important to realize how incredibly networked the pipelines are – take a look at this snapshot of pipelines in place near the small town (pop 14,518) of Kilgore, TX in Gregg County. Decline Curve Analysis Since we have a new tool for decline curve analysis here at Drillinginfo, let’s take a peek at Gas Decline Curves for the past three years in De Soto Parish. On the left wee see well locations colored by operator On The right we see the Model Type options available – if you select multiples, our Auto Fit algorithm will determine the closest match The type curve for the wells is displayed in the middle, along with Probabilistic Reserves charts Refracking A few years ago Encana was putting a fair amount of effort into refracking, or restimulating, older Haynesville wells . Since then Encana have sold their Haynesville assets to GEP, who are privately held (for $850 million!). One would assume that GEP plans to carry those re-stimulations forward, as Encana will continue to manage production for the next five years and as new LNG terminals and the new improved Panama canal come online. Conclusion The East Texas Basin continues to operate at a slightly heavier clip than you might anticipate, in part because of the closeness of adequate market, in part because of the thunderous potential of the Haynesville Shale, but mostly because there are lots of oil & gas folks who are still in the game. http://everythingshale.com/news/2016/may/12/the-east-texas-basin-continues-to-surprise/ http://everythingshale.com/news/2016/may/12/the-east-texas-basin-continues-to-surprise/ Thu, 12 May 2016 13:00:36 http://everythingshale.com/news/2016/may/12/america-s-one-million-bd-of-crude-oil-for-president/ Brian Scheid spoke this week at the Platts Global Crude Oil Summit in London and gave some insight into one of the biggest variables around US oil: the next president. Let’s call it the 1 million b/d race, even if such speculation may ultimately prove wildly wrong. In short: no one can accurately forecast the impact of the outcome of this November’s US presidential race. This is partly because neither Hillary Clinton, the Democrat’s likely candidate for the White House, nor Donald Trump, the presumptive Republican nominee, have laid out the specifics of their energy policy hopes. Nor is it clear how many of these policies may bear fruit. More importantly, the race for the White House and its subsequent effect on global crude oil market fundamentals will not happen in a vacuum. A coordinated supply cut by OPEC, a collapse of Venezuela’s economy, even a pronounced return of Libyan oil to the world market will likely impact fundamentals deeper than whatever happens in November’s election. In addition, if oil prices sink below $30/b again or return to levels above $70/b, the new White House tenant’s influence on crude supply and demand may ultimately be inconsequential. There are so many variables that the US Energy Information Administration, which forecasts everything from where Brent spot prices will be trading next year to how much a single Eagle Ford rig may produce next month, does not forecast the impact of election outcomes on oil, or any other energy markets. Several analysts cautioned that trying to predict the market impact of the likely race between Clinton and Trump was a fool’s errand at best and pretty much impossible. But they did offer a best case/worst case view that a Clinton win would broadly decline production, by as much as 500,000 b/d, and a Trump win could boost production by as much as 500,000 b/d. So, the election could have a 1 million b/d swing, even if such a prediction is informed speculation, or, as some might more accurately put it: a guess. That being said, this presidential race is shaping up to have a major impact on the direction of US and, possibly, global oil supply and may have the most significant impact on oil policy of an election in American history. This is partly due to the increasing move away from middle ground in American politics which has clearly been accelerated amid the presidential primary races. This has caused candidates who may have a more nuanced view on energy policy, such as conditions on fracking on public lands, to a more extreme view, such as an all-out fracking ban. Factor in the likelihood that the partisan balance of Congress and the Supreme Court will also be decided by voters in November, the possible shift in US oil policy may be unprecedented. With all these moving parts and potential variables, here are some of the key possibilities for crude markets if Clinton or Trump win in November. If Trump wins While Trump has offered few specifics on his energy policy goals, he has indicated that several extreme possibilities, such as a ban on Saudi Arabian crude imports, are being considered. Possibly the bigger crude policy game changer is the possibility that Trump could void the historic nuclear deal with Iran, a result which could put a massive sanctions regime back in place and might limit access by US allies to the US financial system. President Obama has made efforts to combat climate change a legacy goal. This includes new rules to cut methane emissions from oil and gas wells, making it harder to drill on federal lands and, arguably, more expensive to drill anywhere else. He’s also limited the offshore areas where production can take place and has come up with strict new technical standards for drilling both on and offshore. As president, Trump would likely try to gut all that. The costs, the burdens of federal regulations on oil and gas drilling could go away. In essence, it would be easier and less expensive for a US producer to produce. Trump could also look to weaken fuel economy standards set by the Obama administration, creating a major demand boost, and might look to open more federal waters to oil and gas production. The Obama administration seems to want to concentrate offshore production to only one area: the Gulf of Mexico. They recently took a planned oil and gas auction for parcels in the Atlantic Ocean out of their upcoming five year lease sale plan. And after Shell’s missteps in the Arctic, they seem to be taking great pains to keep any drilling from taking place offshore Alaska. In October, the administration cancelled two planned sales of Arctic oil and gas leases: a sale planned for this year in the Chukchi Sea and one planned for next year for parcels in the Beaufort Sea. Trump could put everything on the table: Atlantic lease sales, Arctic lease sales, more Gulf drilling, maybe even the Pacific. There are some timing issues with that, since they couldn’t undo Obama’s leasing plan through 2022 without considerable delay and effort. But all available US waters could conceivably be opened up to oil and gas drilling within a decade. Just because those waters are available, however, doesn’t mean producers would necessarily want to develop them. Like the impact of the election, there are a lot of variables at play. In addition, if Trump moved to open more public land to drilling, as many expect he would do, it’s unclear if such a move would be met with much enthusiasm from producers. If Clinton wins If elected, Clinton has pledged to, within a decade, “reduce American oil consumption by a third through cleaner fuels and more efficient cars, boilers, ships and trucks,” according to her campaign website. While the potential path isn’t entirely clear, the oil and gas industry is nervous that Clinton could move toward banning fracking on public lands, cutting off the possibility of future production. Clinton has outlined conditions for fracking on public lands, including needed approvals from states and municipalities and chemical disclosures, but industry lobbyists stress these conditions could become a de facto ban. The main view on a Clinton, or Senator Bernie Sanders, presidency, is that it would essentially continue and push President Obama’s efforts to combat climate change further. So a plan to limit methane emissions from new oil wells gets expanded to emissions limits on all wells. Maybe a $10-per-barrel tax on oil that Obama pitched earlier this year, but went nowhere, gets resurrected in a Clinton White House. In addition, elimination of tax incentives oil companies get for drilling in the US would likely get a hard look. Perhaps a Clinton White House would get more ambitious with federal gas mileage standards, going beyond 54.5 miles per gallon goal in 2025, further decreasing gasoline demand. A big difference will likely be offshore drilling. Instead of keeping the Atlantic Ocean free of oil and gas drilling for the next five years as the Obama administration has proposed, it would likely be kept out of there for 10 or 15 years by a Clinton administration. More parcels offshore Alaska would likely be taken off the table; maybe US producers never return to offshore Alaska until a Republican wins the presidency. Maybe future lease sales in the Gulf of Mexico are cancelled. This is major from a supply standpoint. Despite the impact that prices have had on the US shale revolution, Gulf of Mexico production is expected to hit record highs in 2017, averaging 1.63 million b/d in 2016 and 1.79 million b/d in 2017. If you’re enacting policy that potentially cuts US Gulf production then you’re talking about cutting into one of the few sources of US supply that increases even in a bust cycle. Even without specifics, this election matters deeply to fundamentals and will be a key moment for US producers and the path of supply. Who wins in November may dictate if the US shale renaissance peaked 9.75 million b/d in April 2015 or if this year has been a dip ahead of a new high. Of course, if oil returns to $100/b, even $70/b, it may not matter much to producers who is in the White House. The post America’s one million b/d of crude oil for president appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/12/america-s-one-million-bd-of-crude-oil-for-president/ http://everythingshale.com/news/2016/may/12/america-s-one-million-bd-of-crude-oil-for-president/ Thu, 12 May 2016 11:49:43 http://everythingshale.com/news/2016/may/12/recovery-of-us-coal-industry-is-more-than-a-fairytale/ Unless you’ve been hiding under a rock — perhaps buried by mountainous utility stockpiles — you’ve probably heard the US thermal coal market is struggling. Demand is down. Production has plummeted. Prices are low. Some of the largest coal producers in the nation have filed for bankruptcy, and most others are doing whatever they can to try and stay in business — a tough task in a market facing more challenges than ever. But despite the black cloud enveloping the industry, deep down is a seam of optimism filled with hope, recovery and a brighter future. A better coal market is coming, people in the business say, simply because it can’t get any worse than this. That belief in a better tomorrow is why almost 500 coal professionals flocked to Orlando, Florida, last week to attend the Eastern Fuel Buyers Conference,  one of, if not the, premier industry gatherings of the year. At the 45 th annual event, organizers looked to shine a coal-fueled beacon of hope with a conference theme of “20/20 Vision – Coal’s Path to the Future,” and there was probably no better place to tell that magical tale than at Walt Disney World. Reality sets in While the conference focused on how the US coal industry would eventually transform into a healthier one, notions of King Coal’s return to the throne were nonexistent near Cinderella’s Castle. The reality of today has slowly sunken in, and the carriage has turned into a pumpkin. Prices for natural gas, coal’s evil stepmother, are still low, and the sinister stepsisters of elevated utility stockpiles and environmental regulations continue to torment the market. Coal’s Prince Charming, alas, was nowhere in sight — unless that turns out to be Donald Trump. “We’re all hurting, all parts of the industry,” one producer said at the conference. “You come here looking for hope and looking to talk to the people who are going through the same thing you are going through. You share war stories. You share ideas. You try to figure out what you can do to stay afloat. “We’re all like a family,” he added. “You see these people every year, and we’re all going through it. You want everybody to do well, but the fact is that isn’t going to happen. You have to see what you can learn here to be the best company you can be until we hopefully see an improvement.” When a better market develops is a huge unknown. Some in the industry see 2016 as a bottom for US coal, while others at the conference expect 2017 to mirror this year’s struggles. Consolidation is key Despite contrasting views as to when we’ll see coal begin to recover, a consensus among presenters and attendees alike was consolidation is needed before there is any significant improvement in the market. Less coal demand will mean less production and fewer companies supplying power plants. US thermal coal consumption for the electric power sector topped 930 million st five years ago, dropped to 740 million st last year and could fall to as little as 650-700 million st this year, some have predicted. Consumption figures at the end of 2016 could equal what the new annual demand will be for years to come. Some consolidation will come through bankruptcies, as companies liquidate assets and other producers scoop up coal mines through the courts. More consolidation could happen as producers look to shrink their footprint or get out of the industry altogether, sources said. Jim McCaffrey, senior vice president of energy marketing at CNX Coal Resources, spoke at the conference and said more reorganization of the industry not only will come but is needed. “I think the focus needs to be on regional consolidation rather than national diversification,” McCaffrey said. “Obviously, we have companies that are bankrupt, we have companies that aren’t. I like to say every company in the coal industry has reorganized. Some have done it with the help of the courts, some have done it without the help of the courts, and I think that reorganization will continue.” Plenty of questions remain as to what will happen this year and further out as the entire energy sector continues its transformation: What will be left after all the big coal bankruptcies? How much coal will utilities burn? When will natural gas prices go up? Will there be a Clean Power Plan? With all that uncertainty, everybody can agree on only one thing for sure: The US coal industry won’t ever be the same. The post Recovery of US coal industry is more than a fairytale appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/12/recovery-of-us-coal-industry-is-more-than-a-fairytale/ http://everythingshale.com/news/2016/may/12/recovery-of-us-coal-industry-is-more-than-a-fairytale/ Thu, 12 May 2016 00:01:30 http://everythingshale.com/news/2016/may/11/oxford-study-methane-a-distraction-in-climate-change-discussion/ Shale opponents’ obsession with methane emissions from oil and natural gas development is a distraction in terms of addressing climate change, according to a new study led by researchers from the University of Oxford. The study argues that focusing on reducing CO2 is more important due to its cumulative impacts over time, a point a lead author of the study, Oxford climate scientist Raymond Pierrehumbert, made in the Washington Post : “ People are placing too much emphasis on methane . And really, people should prove that we can actually get the CO2 emissions down first, before worrying about whether we are doing enough to get methane emissions down.” Pierrehumbert’s comments come after he recently told Climate Central environmentalists’ continued focus on methane is misguided: “… Methane is still just a sideshow, and relative to what the U.S. needs to do to fulfill its Paris commitments with regard to keeping the warming under 2°C, even a substantial upward revision of methane leakage is almost completely irrelevant. The warming due to steady methane emissions essentially stops increasing after just two decades, and is largely reversible once the leakage stops.” Natural Gas Reduces CO2 Of course, we also know that natural gas – by reducing carbon dioxide emissions – is doing more to address climate change than anti-fracking activists would ever admit. In fact, since the shale revolution began, the United States has been a world leader in reducing CO2 emissions, as the following EID graphic illustrates: Increased use of natural gas for electricity generation has been the key driver of this dramatic progress in reducing CO2, as the U.S. EPA confirmed in its latest Greenhouse Gas Inventory: “Recently, a decrease in the carbon intensity of fuels consumed to generate electricity has occurred due to a decrease in coal consumption, and increased natural gas consumption and other generation sources. Including all electricity generation modes, electricity generators used natural gas for approximately 27 percent of their total energy requirements in 2014.” Many other reputable agencies have confirmed that increased use of natural gas is the single most significant contributor to reduced U.S. carbon emissions. According to the  U.S. Energy Information Administration  (EIA), since 2005, natural gas has prevented more than one billion metric tons of carbon dioxide   from being emitted from power plants in the United States. Meanwhile, the use of renewable energy has prevented 600 million metric tons of carbon dioxide.  EIA also noted that, as natural gas fired electricity generation ramped up, power plant greenhouse gas emissions reached a  27-year low  in April 2015. The Paris-based International Energy Agency’s (IEA) latest  World Energy Outlook  pointed out that natural gas is a “valuable component of a gradually decarbonizing electricity and energy system.” Just a few weeks ago, IEA released data that showed, “In the United States, emissions declined by 2% (in 2015), as a large switch…to natural gas use in electricity generation took place.” And new EIA data released this week show that CO2 emissions associated with energy production dropped 12 percent between 2005 and 2015. EIA says conversion to natural gas for electricity generation accounts for 68 percent of these reductions : “Many of the changes in energy-related CO2 emissions in recent history have occurred in the electric power sector because of…the increased use of natural gas for electricity generation.” Remarkably, EIA notes, the energy sector’s CO2 reductions have occurred even as the economy grew by 15 percent between 2005 and 2015, continuing a recent trend of decoupling of CO2 emission growth from economic growth recently highlighted by the International Energy Agency. Methane Declining EPA recently released some highly suspect revisionist data that upwardly revised methane emissions from oil and gas systems. Still, EPA’s new data shows methane emissions from natural gas systems have declined 0.68 percent since 2005 at the same time natural gas production has increased 42 percent . The new data also shows that methane emissions from natural gas systems are down 14.8 percent since 1990 (206.8 mmt CO2 eq. to 175.6). As noted earlier, natural gas production has increased 69 percent since 1990. Even combining petroleum systems with natural gas systems, EPA’s new data indicate a drop in methane emissions from oil and natural gas systems since 1990. Oil production , by the way, has increased 16 percent since 1990. Activists continue to focus on methane emissions from oil and gas being “higher than previously estimated,” but even the controversial new EPA data shows that methane emissions from industry are stable at worst and decreasing at best – doing so at a time in which production has skyrocketed. And as the Oxford study shows, current trends are sufficient to minimize methane’s effect on global warming, even as the EPA preps to finalize costly and unnecessary new methane regulations on oil and natural gas systems. As Pierrehumbert told the Washington Post , EPA’s focus on methane could be costly in more ways than one: “[I]f we don’t do a good job with CO2, that means as far as temperature targets go, the money we put into methane and black carbon, as far as climate goes anyway, is wasted.” Methane emissions can have short term effects but the researchers show that stabilization of emissions is adequate, while reducing CO2, which has happened in the U.S. because of fracking and natural gas, is far more important. Fortunately, the oil and natural gas industry are leading the way on both methane and CO2 reductions. http://everythingshale.com/news/2016/may/11/oxford-study-methane-a-distraction-in-climate-change-discussion/ http://everythingshale.com/news/2016/may/11/oxford-study-methane-a-distraction-in-climate-change-discussion/ Wed, 11 May 2016 18:05:20 http://everythingshale.com/news/2016/may/11/mckibben-to-visit-colorado-amid-failing-ban-fracking-campaign/ Anti-fracking activist Bill McKibben will be visiting Colorado this weekend in what appears to be an attempt to breathe life into the failing ban-fracking campaign. McKibben will be accompanied by a number of national activist organizations also travelling to the state under the banner of Break Free 2016 for two protests they are touting will be one of the “largest mass mobilizations for climate action in the history of Colorado” with the event on Saturday featuring a talk from McKibben himself. While McKibben may succeed in transporting activists from out of state, he hasn’t had much success with actual Coloradoans.  McKibben’s trip comes on the heels of a Colorado Supreme Court ruling that local government fracking bans and moratoria are “invalid and unenforceable.”  The ruling served as a major setback for activists behind a series of ballot initiatives to ban fracking in the state. In a further sign that the state’s media understands how extreme McKibben’s positions are, the Denver Post  editorial board wrote that the “ Colorado Supreme Court gets it right on fracking .” That’s not all. McKibben’s push for higher education institutions to divest their holdings in fossil fuels has been rejected by college campuses across the state including the University of Colorado . University of Colorado Regent John Carson told the Boulder Daily Camera : “We’re not going to start picking and choosing investments based on people’s political views,” he said. McKibben’s “Keep-It-In-The-Ground” (KIITG) movement hasn’t gotten much attendance in Colorado, either.  His own Colorado campaign arm, 350 Denver , actually had to cancel a protest at a Hillary Clinton fundraiser in Denver due to a lack of “people power.” After several posts on their Facebook page attempting to rally support, they were only able to get two protesters to commit. To put the icing on the cake, Gov. John Hickenlooper (D) has consistently debunked McKibben’s claims, recently pointing out that the increased use of natural is the  “only realistic way” to cut greenhouse gas emissions . But even without his baggage in the state, it is not likely that Coloradans would be receptive of McKibben’s extreme anti-fossil fuel message where oil and natural gas development supports more than 110,000 Colorado jobs, almost $30 billion of economic activity, $1.6 billion in tax revenue and is a big part of the reason why energy bills in the state are 23 percent lower than the national average . Recent polling has shown that “majorities of Republicans (95 percent), Independents (84 percent) and Democrats (69 percent) say that producing more oil and natural gas here in the U.S. is important to them.” So with activists set to put on yet another publicity stunt at a Bureau of Land Management lease auction on Thursday, May 12, followed by an all-day event in Adams County on Saturday, May 14, featuring a speech from McKibben, it is likely that Coloradans can brace for more of the same as these groups desperately try to reinvigorate their failing campaign to ban fracking in Colorado. The only question is whether anyone with any credibility is willing to appear alongside McKibben’s dwindling Colorado crusade. http://everythingshale.com/news/2016/may/11/mckibben-to-visit-colorado-amid-failing-ban-fracking-campaign/ http://everythingshale.com/news/2016/may/11/mckibben-to-visit-colorado-amid-failing-ban-fracking-campaign/ Wed, 11 May 2016 16:59:49 http://everythingshale.com/news/2016/may/11/it-s-not-just-industry-pushing-back-on-climate-prosecution-campaign-major-media-outlets-weigh-in-too/ As questions continue to mount about the propriety and legality of the activist-led campaign to get Democratic officeholders to prosecute groups and companies with which they disagree on climate issues, one of the primary spokesmen for that effort on Capitol Hill took to the Senate floor today. To hear U.S. Sen. Sheldon Whitehouse (D-R.I.) tell it , the only folks who are raising any issues or concerns about the strategy are a bunch of right-wing “denial” groups and the industry itself. To wit: “There are obvious similarities between the fossil fuel industries’ denial of its products’ climate effects and the tobacco industries’ denial of its products’ health effects. These similarities are sufficient that a proper inquiry should be made about pursuing a civil lawsuit … I have made that suggestion and wow did that set off an outburst.  The right wing climate denial outfits and the fossil fuel industry mouthpieces went into high gear.” Left unmentioned, of course, is that a number of big and important media institutions and commentators have also pushed back on the campaign. Here, for the benefit of Sen. Whitehouse and others, is a quick (and inexhaustive) list: Editorial Boards Financial Times: Legal basis for AG investigation is flimsy, free speech implications are alarming. “The investigations launched by the attorney-generals of some US states and the Virgin Islands set a troubling precedent for other policy debates, and threaten to undermine the cause that they aim to support…The legal basis for these actions seems flimsy…Beyond that, the implications of the investigations for free speech on public policy issues are alarming. Everyone ought to be able to take part in policy debates without worrying that their opponents will be able to use the law to go on fishing expeditions through their private communications, looking for embarrassing tit-bits that can be used against them…Climate change campaigners argue the seriousness of the issue means extreme measures are warranted, but the exact opposite is the case. It is precisely because the stakes are so high that all arguments must be heard. The actions by the attorney-generals can only degrade the quality of that debate.” (Editorial, 4/24/16 ) USA Today: ExxonMobil has a right to its opinion. “Schneiderman’s push is based on an extraordinarily powerful New York law known as the Martin Act. It only requires prosecutors to prove a factual error – not fraudulent intent. This is the type of law that should be used with great caution for critical public purposes. There lies the irony in using a law designed to protect investors to go after the oil giant. The investigation won’t push Exxon to reevaluate its public stance on climate change so future investors won’t be misled. The company did that years ago. And the most likely effect of a costly legal examination of Exxon’s past statements is a lower stock price, hurting current investors.” (Editorial, 11/22/16 ) Bloomberg View: Investigation is ‘Dangerous Arrogation of Power.’ “Much as one may sympathize with Schneiderman’s desire to encourage stronger action on climate change, this is not the way to go about it…Engaging in scientific research and public advocacy shouldn’t be crimes in a free country. Using the criminal law to shame and encumber companies that do so is a dangerous arrogation of power.” (Editorial, 11/10/15 ) Washington Post: Exxon ‘Didn’t Commit a Crime,’ Science Depends on Allowing Criticism. “Perhaps Mr. Schneiderman’s investigation will turn up something damning. But there’s also a risk whenever law enforcement holds the prospect of criminal penalties over those involved in a scientific debate. Legitimate scientific inquiry depends on allowing strong, even unfair, criticism of the claims that scientists make. As the Exxon investigations show, respecting that principle will not lead to positive outcomes in all cases. But it nevertheless demands that the government leave a sizable buffer zone between irresponsible claims and claims it believes may be criminally fraudulent.” (Editorial, 11/14/15 ) Wall Street Journal: Walker investigation crosses the line. “Mr. Walker belongs to this climate prosecution club and so he unleashed his subpoena attack on CEI, as well as on DCI Group, a Washington-based PR firm that represents free-market and fossil fuel groups. His demand for a decade’s worth of papers on climate research is a form of harassment. The process is itself punishment, intended to raise the cost of speaking freely on climate policy lest it invite legal bills and other political headaches. Mr. Walker is also over the line in demanding the names of nonprofit CEI’s donors, who can remain secret under federal law. Anyone on the list will become a new target for the Schneiderman climate posse.” (Editorail, 4/29/16 ) Pittsburgh Tribune-Review: ‘Climate thug’ AGs are molesting the legal system. “The Racketeer Influenced and Corrupt Organizations Act came into being in 1970. Better known simply as the RICO Act, it was established to provide ‘new remedies to deal with the unlawful activities of those engaged in organized crime.’ Surely there’s some clever legal eagle out there who can figure out a way to apply it to 17 state attorneys general who have chosen to molest the legal system and to collude with the federal government to advance the latter’s evisceration of the First Amendment in pursuit of its climate agenda. Wednesday last, Sen. Jim Inhofe, R-Okla., chairman of the Environment and Public Works Committee, accused the AGs of a ‘misuse of power.’ No, Senator, this is rank abuse of power. And should it go unchecked, free speech will become a dead letter and scientific inquiry will be rendered into a quaint notion.” (Editorial, 5/7/16 ) Detroit News: ‘Lynch’s actions blatantly trample the Constitution.’ “Even if the science of climate change is as settled as proponents contend, Lynch’s actions blatantly trample the Constitution. The First Amendment protects even the most hateful and nonsensical speech because individuals in a free and liberal society understand the detrimental effect of stifling dissent…What Lynch and Whitehouse are hoping to do is silence skeptics with the threat of prosecution to make it easier to push through a radical agenda to combat global warming…[Whitehouse’s] efforts are an offense to the very principles this nation was founded on, and Lynch should suspend immediately any action her department has taken to chill free speech in the United States.” (Editorial, 3/19/16 ) Richmond Times-Dispatch: Kiss your free speech goodbye. “This is dangerous business, and not just for conservative groups. If inquisitions like these become accepted practice at one point on the political spectrum, they will soon be adopted by other points along it as well. The result will expose vast swaths of legitimate political discourse on the air, in print, and on the Internet to criminal and regulatory sanction. Then you can kiss your free speech goodbye.” (Editorial, 5/8/16 ) Colorado Springs Gazette: AG bullies need to ‘knock it off’. “If attorneys general plan to use our courts to bully climate change skeptics, as has been reported, they need to knock it off. We have the right to express opinions in this country, no matter how outrageous they may seem. To violate that right, by threat of lawsuits and/or prosecution, is to break this country’s most sacred law – the one that protects free speech and the right to challenge authority and conventional wisdom.” (Editorial, 5/6/16 ) Wall Street Journal: AG Campaign is an ‘Attempt to Stamp Out All Disagreement on Global-Warming’ Policy. “Sheldon Whitehouse got his man. The Rhode Island Senator has been lobbying for prosecutions of oil and gas companies over climate change, and New York Attorney General and progressive activist Eric Schneiderman has now obliged by opening a subpoena assault on Exxon Mobil. This marks a dangerous new escalation of the left’s attempt to stamp out all disagreement on global-warming science and policy…Even with the fearsome power of the Martin Act, this investigation appears built for media consumption more than courtroom success. There are no “facts” about the eventual extent and impact of climate change that Exxon or anyone else can hide, because inside or outside the company there are only estimates based largely on computer models. And if the Exxon files reveal various competing conjectures, even in New York it still isn’t illegal to conduct scientific research.” (Editorial, 11/8/15 ) New York Post: It’s the state AGs who should be investigated. “New York Attorney General Eric Schneiderman and other state AGs are probing ExxonMobil — but maybe they’re the ones who should be investigated…the anti-Exxon campaign is starting to look like a conspiracy in its own right – pursuing a purely political vendetta in a blatant abuse of office. (Editorial, 4/19/16 ) And it’s not only the investigations that have been criticized. The reporting that led to the investigations – articles by the Rockefeller-funded InsideClimate News and Columbia School of Journalism – have been called biased and unethical. Columbia Journalism Review: LA Times, Columbia J-School Cause ‘Harm’ by Not Disclosing Funders. “The practice also raises questions of balance in what subjects get reported, as well as appropriate disclosure of the outside funders and their political leanings. In the case of Columbia, The Energy and Environmental Reporting Project is funded in part by a group of philanthropic organizations…and one—the Rockefeller Brothers Fund—has taken a particularly strong stance against fossil fuels…There is arguably some harm in not disclosing those funders to readers. While both pieces published in the Los Angeles Times in October credited the Columbia project as its partner, there was no explicit mention of the philanthropic organizations providing financial support for it. After that complaint was made public this week, the Times appended the relevant information to the work online. It’s questionable, though, whether very many readers would have taken the time to visit the Columbia project’s web page to examine its funders. What’s more, there was no such disclosure of funding on Columbia’s website when both stories ran, the first on Oct. 9 and the second on Oct. 23.” ( 12/3/15 )   New York Post: Columbia Reporting ‘Biased and Unprofessional.’ “Yet the team’s approach appears to be biased and unprofessional. For one thing, it started with the preconceived belief that oil companies are malfeasant for not embracing costly, scientifically dubious amelioration policies… The Columbia project serves as a warning: A premier university hires an activist to run its J-school. It partners with an activist online Web site to target an energy company previously savaged by its new dean in his book. The effort is funded by foundations whose role as fossil-fuel critics was hidden from readers. In the end, the journalists themselves wind up playing defense. The series is a finalist for Harvard’s Goldsmith award and is a favorite for a Columbia-awarded Pulitzer. Such prizes would tarnish those schools and the journalism profession that relies on them as ethical barometers.” (Op-Ed, 3/1/16 )   National Review: InsideClimate News a ‘Mouthpiece’ for Green PR Firm, Signs of Conflicts of Interest. “But its critics claim that InsideClimate News is essentially a mouthpiece run by a public-relations consultancy that gets its funding almost exclusively from groups with an environmental agenda…The little that is known about InsideClimate News raises questions about conflicts of interest as well as about the publication’s ability, and proclivity, to report fairly and without bias.” ( 12/22/15 ) O’Dwyer’s Magazine: Columbia’s Exxon Reporting ‘Raises Troubling Ethical Questions.’ “Now, there’s nothing wrong with good, solid investigative reporting pursued in the cause of finding the truth. But the reporting in this case raises troubling ethical questions, not only about the integrity of Columbia University’s ‘research,’ but also the kind of scholarship the Columbia Journalism School now advocates…In 2013, the year Steve Coll became J School dean, the Pulitzer was awarded to InsideClimate News, at that time an obscure online news organization devoted to climate change and the end of fossil fuels. The non-profit news service was funded by the same philanthropic organizations that funded Columbia’s Energy and Environmental Reporting Project. Two years after its Pulitzer, InsideClimate News led the attack on ExxonMobil with its mammoth five-part series…Steve Coll, the dean of the Columbia School of Journalism has, for years, been an unabashed Exxon critic. In 2012, a year before he came to Columbia, Coll wrote a 683-page expose, Private Empire: ExxonMobil and American Power. Needless to say, it wasn’t a love letter to the oil company. Coll’s former employer, the Washington Post, when describing the book, said ‘ExxonMobil has met its match in Coll.’” (Op-Ed, 1/11/16 ) http://everythingshale.com/news/2016/may/11/it-s-not-just-industry-pushing-back-on-climate-prosecution-campaign-major-media-outlets-weigh-in-too/ http://everythingshale.com/news/2016/may/11/it-s-not-just-industry-pushing-back-on-climate-prosecution-campaign-major-media-outlets-weigh-in-too/ Wed, 11 May 2016 16:21:29 http://everythingshale.com/news/2016/may/11/more-ties-to-activists-new-questions-over-publication-status-in-uc-groundwater-fracking-study/ The  National Association of Royalty Owners recently called upon the University of Cincinnati (UC) to publish its recent study on fracking and groundwater properly, in a peer-reviewed public journal, something the authors have confirmed is underway. While this news may appear promising, the reality is the study’s data, which showed “ no evidence for natural gas contamination” and was paid for by activists and taxpayers, was in fact concluded almost a year ago. EID recently discovered that another UC taxpayer funded fracking study only took three months to publish! So why then is this latest study still unpublished? One possibility is that some of the funders—those with ties to the anti-fracking movement who initially stalled the release of the results—have asked for more time to prepare to dispute the data. While this is speculation, it is a fact that anti-fracking groups are trying to discredit the data to achieve their “Keep It in the Ground” aims, as EID recently caught on film . Interestingly enough, we have also discovered that the University of Cincinnati has been lending its name to a host of anti-fracking events, and will participate in an upcoming event hosted by the Southeast Ohio Alliance to Save Our Water from Fracking. Let’s take a look at some of the latest revelations. UC Taxpayer Funded Fracking Air Study Published in Less than Year In January 2014, UC announced a new study to determine air quality impacts of oil and natural gas. UC’s Center for Environmental Genetics (CEG) received federal tax dollars for this study in the form of a grant from the NIH’s National Institute of Environmental Health Sciences (NIEHS) for $47,910. The results of that study were made available a year later (January 2015) at a meeting hosted by the anti-fracking activist Carroll Concerned Citizens . Three months later (March 2015), UC announced that the fracking study on air quality was published and peer-reviewed in Environmental Science and Technology . The authors of the  study found elevated polycyclic aromatic hydrocarbon (PAH) levels near shale natural gas wells in Carroll County, Ohio, but admitted that the sample size used for their study was too small and the that chief assumption used for their research model was “totally impractical,” according to multiple media reports . Yet that didn’t impede the study from being published in a peer-reviewed journal in less than 90 days, nor did it prevent headlines such as, “ Fracking may cause air pollution, respiratory issues ,” and “ Fracking could increase risk of cancer, new study finds ”. Groundwater Study Still Not Published in Peer-Reviewed Journal By comparison, the UC groundwater study findings were announced in February 2016 once again at a Carroll Concerned Citizens meeting. According to an email  from the lead author, Dr. Amy Townsend Small, to the National Association of Royalty Owner’s (NARO), UC is “currently working to prepare these data for publication in a peer-reviewed journal”. In other words, they are just beginning the process to publish after four months. Why is there such a difference in the effort for publication this time around? Perhaps it could be that the headlines for the data from this taxpayer and activist funded study, included examples like   “University of Cincinnati study finds fracking’s bad rap is not supported” . As American Thinker reported, “This is a scandal that goes to the heart of the relationship between science and public policy and the reliability of global warming doomsayers.  The scandal was broken in a small town newspaper, the Free Press-Standard of Carroll County, Ohio and only gradually made its way to the national media via Jeff Stier of the National Center for Public Policy Research , Newsweek , and Jazz Shaw of Hot Air .” Ban-Fracking Activists Funded the UC Study, Not “Industry” While the authors of the study drag their feet to publish, the anti-fracking community is already out in full force twisting the facts and providing misinformation to the public. Recently EID caught protestors in the spin zone trying to say that the groundwater study was not credible because it was “funded by industry”, when it was actually funded by ban-fracking activists and taxpayers. Take a look at what EID caught on film at a ban-fracking rally: Ban Fracking Activist to EID: “An industry paid study is not valid. So quit citing it” EID: “The University of Cincinnati study was an industry study?” Ban Fracking Activist: “I do not care.  It’s an industry paid for study.” EID: “Are you saying the University of Cincinnati Study was industry paid? “ Ban Fracking Activist: “Yes I am, I’m saying yes, absolutely” In fact, 18 percent of the funding for the water sampling came from the Deer Creek Foundation, which also gave $25,000 to the Media Alliance in Oakland, Calif. for a documentary on the “rise of ‘extreme’ oil and gas extraction – fracking, tar sands development, and oil drilling in the Arctic” as well as  $20,000  to the Northern Plains Resource Council, a Montana activist group that states on its website , “Fracking damages water, land and wildlife.” The Deer Creek Foundation also donated at least $20,000 to WildEarth Guardians , which is a key player in the “Keep it in the Ground” anti-fossil fuel movement that has been especially active in Ohio lately. Meanwhile, 100 percent of the funding for the tools and equipment used to analyze the water samples came from state and federal tax payers . UC Professors Continue to Participate in Ban Fracking Events Unfortunately the likelihood that anti-fracking bias has been dictating the actions of the researchers has to be considered in this situation. After all, why do UC professors continue to pop up at anti-fracking activist events?  Both Dr. Erin Hayes and Dr. Amy Townsend-Small decided to announce their research at events held by activists groups that vocally oppose  the oil and gas industry.  Next week, UC professors are slated to participate in the Southeast Ohio Alliance to Save Our Water from Fracking event in Columbus. According to group’s website , the conference is, “A one-day conference for legislators, regulators, healthcare providers and community members on unconventional shale gas development in Ohio and its environmental and public health impacts. With special presenters: Dr. Julie Weatherington-Rice, Raina Rippel, SWPA Environmental Health Project, Associate Professor Erin Haynes, University of Cincinnati, & Professor James O’Reilly, University of Cincinnati, author of “The Law of Fracking” and Dr. Peter Nara.” UC professor James O’Reilly is no stranger to anti-fracking events. In fact, last year he participated in a “Beyond Fossil Fuel” summit in Kentucky.  His book, “ The Law of Fracking” is essentially a guide on “how to sue an oil and gas company.” Take a look at the video below. Professor O’Reilly ‘s biography includes significant misinformation about fracking, incorrectly claiming a lack of economic stimulus , the destruction of county roads , and gross impacts to agriculture jobs, and more. Professor James O’Reilly:  “I’m not a geologist so I can’t say precisely how rapidly the gas is going to dissipate, but it is a significant 3 to 5 years, a 3 to 7 year cycle.” This is not the first time an agenda-driven professor and supposed “expert” has said they have no scientific credentials in matters relating to shale development .  The irony here is that Professor O’Reilly works for the same public university that conducted the strangely delayed groundwater study, the study in which isotope analysis to determine how “rapidly the gas is going to dissipate” over a period of three years and found : “Based on the carbon and hydrogen stable isotope data along with the relatively consistent measurements within individual’s wells over the study period, we have found no evidence for natural gas contamination from shale oil and gas mining in any of the sampled groundwater wells of our study.” Conclusion EID has been following this story since the UC groundwater study was first announced at an anti-fracking meeting in February. We have documented our ongoing research for the past few months, calling attention to various concerns regarding the study. We have tried to give this public university the benefit of the doubt, hoping UC  was making a good faith effort to publish its findings. That case, however, is becoming harder and harder to make. Once again, we encourage UC to expedite its efforts to publish this study in a scientific journal, despite the fact that the findings will continue to “ disappoint” agenda-driven anti-fracking groups more interested in ideology than science. http://everythingshale.com/news/2016/may/11/more-ties-to-activists-new-questions-over-publication-status-in-uc-groundwater-fracking-study/ http://everythingshale.com/news/2016/may/11/more-ties-to-activists-new-questions-over-publication-status-in-uc-groundwater-fracking-study/ Wed, 11 May 2016 14:11:35 http://everythingshale.com/news/2016/may/11/inside-nippon-steel-s-kashima-plant-do-you-want-to-know-a-secret/ “No photos!” a pouncing PR person tut-tutted. Yoko was more amused than bemused as she holstered her smartphone once more. Colleague Yoko Manabe and I were part of a Japanese media group touring the integrated steelworks of Nippon Steel & Sumitomo Metal Corp at Kashima, northeast of Tokyo. We’d been mustered inside the cavernous building housing the No.1 blast furnace where the furnace house superintendent was listing the attributes of the 5,370 cubic meter giant with fatherly pride. A diligent scribe, Yoko had taken out her phone to record the fascinating minutiae because the safety goggles, gloves, helmet, water bottle, headphone set and C02 detector we’d all been provided with were hampering efficient note-taking. Alas, photo-capable iPhones were a no-no. Photo by Russ McCulloch As the tour wore on, the no-pictures rule became more perplexing. To be fair, NSSMC had allowed us to capture the outside of the furnace from a bus stop for a few minutes of furious clicking. But the photo restriction seemed increasingly absurd. I’ve toured countless Japanese steel works, smelters, coil centers, fabrication shops, and end user plants, many of which have really cool set-ups and are doing amazing cutting-edge stuff. So a reluctance to let tourists wander around taking happy snaps of intellectual property is understandable and justifiable. And then there’s Kashima. The Kashima plant was inaugurated nearly five decades ago by the former Sumitomo Metal Industries (which Nippon Steel absorbed in October 2012 to form NSSMC). The works is spread over 8.9 million square meters and, like all contemporary Japanese mills almost entirely dependent on imported steelmaking raw materials, is built close to the sea. Today, age, sea-air corrosion, and iron ore dust have given Kashima the visage of contented decay. As much as The Beatles and the Mini Cooper S, Kashima is a product of the ’60s and still employs the technology of those times. Whereas far younger rivals in China, South Korea, Vietnam and elsewhere employ direct charging and casting of steel, Kashima continues to trundle molten iron and steel in a fleet of torpedo cars, the massive football-shaped vessels that contain 300-400 mt. A staffer proudly told me that a fully laden torpedo car can cover the 1.1 kms journey between the No.1 steel shop and the No.3 casting shop in 12 minutes, ignoring the inefficiency of all that loading, unloading and shunting. Emblematic of the time-slip was Kashima’s heavy sections mill producing H-shaped construction steel. Built in 1975, a roll on a roughing mill bore the names ‘Hitachi Zosen’ and ‘Demag,’ companies that no longer exist. Demag, part of German plant builder Mannesmann Demag, was spun off into SMS Schloemann-Siemag AG in January 1999. Two years later Hitachi Zosen, NKK Corp and Sumitomo heavy Industries spun off their heavy machinery divisions into Steel Plantech. Hence my consternation. What exactly did NSSMC fear a smartphone photographer at Kashima would capture that might advantage competitors? Photo by Yoko Manabe Most likely, the no-photos rule is age-old and one for which seeking exceptions is too cumbersome. But it could also be this: The Kashima works produced first its first steel in 1971. In the year to March last year, it produced 7.6 million mt of steel, accounting for 17% of NSSMC’s total output. After the Oita works on Kyushu and the Kimitsu plant in Chiba, Kashima is NSSMC’s third-largest and accounts for 7% of total Japanese raw steel output. Last year 54% of its production was exported. As of March last year it employed just 3,130 staff, making Kashima one of the most efficient plants operating in Asia today. That a rust-pocked 45-year old steelworks is still employing long superannuated machinery – and machinery long-since fully depreciated – with minimal staff and yet can still produce some of the world’s best steel and in large quantities is probably a secret NSSMC wants keeping. The post Inside Nippon Steel’s Kashima plant: Do you want to know a secret? appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/11/inside-nippon-steel-s-kashima-plant-do-you-want-to-know-a-secret/ http://everythingshale.com/news/2016/may/11/inside-nippon-steel-s-kashima-plant-do-you-want-to-know-a-secret/ Wed, 11 May 2016 00:01:37 http://everythingshale.com/news/2016/may/10/logistical-and-physical-storage-constraints-have-outsize-effect-on-crude-oil-price-swings/ The price of crude oil currently drifts between the Scylla of uncertain physical supply demand balance and the Charybdis of speculative financial derivative products . Macroeconomic investors in financial products such as oil futures contracts speculate on commodity pricing trends. Because their participation in markets is purely financial, speculators, notably hedge funds, are motivated by a different business strategy than producers and users of physical crude oil. Exploration and Production companies are engaged in the physical activity of exploring for and producing oil and natural gas. Refineries must purchase crude and natural gas to make gasoline and other refined hydrocarbon products. The recent increase in crude oil prices may have been driven by hedge funds buying net long positions in Brent and WTI derivatives by 7 million barrels to a record 663 million in the week ending April 26, 2016. Crude oil prices have shown a strong correlation with hedge fund positions in WTI in the last 18 months. Correlation does not equal causation. Hedge fund managers may have been moving into a net long position speculating that a global rebalancing of a current perceived oversupply of crude to a state of equilibrium is occurring. This speculation may have been fueled by comments by Faith Birol, chief of the International Energy Agency (IEA) that … “under normal conditions toward the end of this year, second half of this year but latest 2017, markets will rebalance .” The reconciliation between the financial and physical product occurs at delivery points agreed upon in standard contracts. The agreed upon delivery point for the West Texas Intermediate (WTI) contract is the intersection of pipelines in the middle of crude oil tank farms in Cushing, Oklahoma. The recent retracement of crude oil prices may be attributed to physical reality pulling market perception closer to the Charybdis of global storage numbers. The irony is that perception of global inventory levels are driven by what would otherwise by seen as relatively insignificant observable details in a global industry that consumes close to 100 million barrels of oil a day. For example, the angle of ladders on top of tanks in the Cushing, Oklahoma is producing price swings that literally affect the value of hundreds of millions of dollars invested in financial products on an almost daily basis. These ladder swings have been amplified by the U.S. decision in January 2016 to allow the export of crude oil. The May 3, 2016 Cushing inventory increase partially contributed to a significant decline in crude oil prices that day. Embed from Getty Images Cushing inventory level data is surveyed, estimated, and published by both governmental and private entities. The government data is public and free. Private publishers such as Genscape sell data frequently used by market analysts. Genscape flys helicopters above Cushing twice a week to judge the level of crude oil in the tanks, and the angle of the ladders which rest on top of the tops of the tanks that float on the crude oil contained inside, among other data points, is observed to deduce the tank’s fill rate. One physical reality surrounding the Cushing level is the mismatch between pipelines bringing crude oil into and leaving the tank farm. Midstream developers have added significant infill capacity to accommodate the rapid increase in crude oil produced in unconventional plays in recent years. While Cushing take-away capacity has been added, it has not kept pace with the increased fill capacity. This possible bottleneck can cause Cushing inventory levels to rise even as global inventory levels decrease due to reduced production outside of the Cushing gathering basins. The market also closely watching Chinese crude oil imports for signs of inventory rebalancing. A recent factor influencing global consumption numbers is the Chinese government decision to allow liberalized imports by independent “teapot” refineries. The refineries took advantage of low crude oil prices to buy a lot of supertankers of oil. Because the refineries lack sufficient pipelines and storage tanks to quickly unload and store all the bought oil, there are a lot of ships full of oil anchored off the Chinese coast waiting to unload. One supertanker holding 2 million barrels of oil is being unloaded by thousand trucks of trucks. This can take a long time. If all data for physical supply and demand for hydrocarbons were timely and accurately available to all market participants, then the market would work perfectly. Unfortunately no one has access to perfect and timely data for this market. Market analysts must make the best use possible of the most timely and cleanest data sets available to draw reasonable inferences about the location of physical supply and demand which ultimately drives financial derivative product prices. http://everythingshale.com/news/2016/may/10/logistical-and-physical-storage-constraints-have-outsize-effect-on-crude-oil-price-swings/ http://everythingshale.com/news/2016/may/10/logistical-and-physical-storage-constraints-have-outsize-effect-on-crude-oil-price-swings/ Tue, 10 May 2016 13:00:16 http://everythingshale.com/news/2016/may/10/us-steelmakers-rummaging-in-the-trade-case-toolbox-for-imports-relief/ It took four years, but we might now know what former Nucor CEO Dan DiMicco meant in 2012 when he said Nucor was “exploring some very new and unique ways” of combating unfairly traded steel imports. “There are opportunities for us to deal with this today with tools that are in the toolbox and tools that will be added to the toolbox,” DiMicco said during an earnings call in October 2012. Since then, US steelmakers have petitioned for antidumping and countervailing duty (AD and CVD) investigations on oil country tubular goods, rebar, wire rod, welded line pipe, corrosion-resistant sheet, structural tubing, cold-rolled coil, hot-rolled coil, cut-to-length plate and other steel products. After the wave of AD and CVD duty investigations in the last few years, we’re now hearing US metals companies touting new tools — such as last year’s provision lowering the injury standard — and calling out so many sections of US trade law that it’s starting to sound like trade case bingo. 201. 232. 337. 332. They conjure a sort of trade case numerology that requires a deep understanding of the myriad ways domestic industries can confront unfair trade, although there has been no recent mention of 301, which has been unsuccessful for steel at least thrice, or the mystical Super 301. “It’s time now that we do something substantial. It’s time now to send the message that we’re not going to have to keep coming back case after case and year after year for 15 more years,” Leo Gerard, president of the United Steelworkers union, said at an International Trade Commission hearing. “It is time that the administration leads a 201. It is time that the administration put forward an investigation on a 232.” Steel Dynamics Inc. CEO Mark Millett testified that launching a Section 201 proceeding was “likely the only viable solution to restore financial health to steel manufacturers and pipe and tube producers.” So, what do all these numbers mean? Section 201, Trade Act of 1974 – A Section 201 action is probably the most commonly known trade action for steelmakers besides AD and CVD cases and it has helped the industry before. Unlike AD and CVD cases that have to be filed on products and name countries individually, Section 201 actions — also called safeguards — impact all imports of specific products no matter the origin. They’re also are enacted more quickly. In 2001, the ITC recommended a four-year Section 201 program with tariffs for multiple steel products and tariff-rate quotas for import volumes exceeding certain amounts. These actions require presidential approval, and President George W. Bush signed the duties into effect in early 2002. However, under international pressure, Bush removed them in late 2003. Section 201 actions require a more rigorous process because the domestic industry must prove “serious injury,” not just “material injury” to the ITC. Section 232, Trade Expansion Act of 1962 – Section 232 investigations are used to determine the impact of imports on national security. The Department of Commerce conducts the investigation and then makes recommendations to the president within 270 days of receiving an application. The president has 90 days to decide if he (or she) agrees and will “adjust imports.” This is the tool that steelmakers pulled out recently and said, “Oh, I forgot I had this. I don’t remember if it is any good.” In 2001, Commerce investigated the effect of imports of iron ore and semifinished steel on national security, but in the end, recommended no presidential action. Section 337, Tariff Act of 1930 – Section 337 makes infringement on intellectual property rights and other forms of unfair import competition unlawful, according to the ITC. This is a tool that’s being used in a different way.  While it is typically used to allege patent infringement, US Steel in April requested Section 337 investigation of all Chinese carbon and alloy steel products, alleging that Chinese steelmakers conspired to fix prices, stole trade secrets and circumvented duties by false labeling. The ITC acts as a sort of patent court in these cases, and if it decides to move forward, it will assign an administrative law judge to the case. In about a year and a half, the judge makes a determination, which is subject to presidential review. The reward for a successful 337 case is an exclusion order, which will instruct US Customs and Border Protection to not permit imports of the subject product. Section 332, Tariff Act of 1930 – A Section 332 investigation is a fact-finding mission for trade or tariff matters. In these cases, the ITC investigates international trade, tariffs and competition between the US and foreign industries, but in the end, it makes no recommendations. The House Committee on Ways & Means in February requested a study called: “Aluminum: Competitive Conditions Affecting the US Industry,” which people in the market have said will give more detail about the portion of the US market being served by alleged illegally dumped Chinese aluminum. Section 301, Trade Act of 1974 – Section 301 is intended to enforce trade agreements, resolve trade disputes, and open foreign markets to US goods and services. US steelmakers petitioned the George W. Bush administration in 2007 to investigate allegations that currency manipulation by China was a de facto trade law violation, but Bush refused. Section 301 remedies include the imposition of duties. Bush also rejected steelmaker 301 petitions in 2004 and 2005. OK, got it? There won’t be a test on this, but it may be wise to be prepared anyway. Sometimes the trade tool box seems more like Pandora’s Box, especially when you consider that other countries have their own tools, too. Learn more about how our leading specialists provide unique insight how the latest commodity market trends could affect your business and trading decisions. Insights. Informed. The post US steelmakers rummaging in the trade case toolbox for imports relief appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/10/us-steelmakers-rummaging-in-the-trade-case-toolbox-for-imports-relief/ http://everythingshale.com/news/2016/may/10/us-steelmakers-rummaging-in-the-trade-case-toolbox-for-imports-relief/ Tue, 10 May 2016 00:01:37 http://everythingshale.com/news/2016/may/09/venezuela-s-power-struggle-a-race-against-time-fuel-for-thought/ Venezuela’s oil industry is at risk of grinding to a halt, along with the rest of the nation, as El Guri, Venezuela’s largest hydroelectric power facility, could see a drop in output of 3,800 megawatts if eight of 18 turbines are shut down. That would be roughly a quarter of the power produced in the country. Since the national electric grid powers the oil industry from oil wells, to refineries, natural gas processing plants and marine terminals, loss of power from Guri would be crippling. This situation is highly possible if reservoir levels keep falling. The government appears to have no immediate solutions and instead talks of lofty goals on converting its diesel-run power plants to be fueled by natural gas. The Guri dam was at 242.88 meters at the end of April and shutdowns would begin if it reaches 240 meters. While it has started to rain recently and forecasts for a few centimeters of rainfall over the month provide a bit of a cushion, it may not be enough. “Average drawdowns on reservoir levels for May are normally around 6.4 cm — considering current savings due to power rationing are at around 20%, it is going to be really touch and go whether they make it through May,” FGE analyst Thomas Olney said. Rather than developing shorter term solutions like expanding existing infrastructure and capacity in its diesel-run power plants and taking advantage of falling global gasoil demand, the government announced plans to convert its diesel-driven power plants to run on natural gas. Energy Minister Eulogio Del Pino estimated they would be able to export 500,000 b/d more diesel rather than use that to run power plants. Venezuela needs to export more oil products in order to increase its foreign currency earnings as not only is the country short water, it has a severe fiscal crisis that may get worse if it can’t meet multi-billion dollar bond payments coming up over October and November. But the feasibility of such a plan is a big question mark. “When Del Pino [talks of] that replacing 500,000 b/d of oil products, he does not say that it would require additional gas production of 2,900 Mcf/d… which PDVSA is far from doing,” said Venezuelan consultant Einstein Millan. Natural gas to the rescue? Venezuela certainly has the natural gas resources to run its power grid with the second largest reserves in the Americas behind the US of 196 Tcf, according to the US’ Energy Information Administration. The question is how to unlock those reserves. Venezuela is already forecast to run a gas deficit this year of 1,947 Mcf/d, according to independent analyst Nelson Hernandez. Eni and Repsol started offshore gas production in the giant Perla field last July, and production of five out of seven wells is pumping out about 510 Mcf/d of gas with targeted peak production in 2020 of 1,200 Mcf/d. Even at peak production, it would not cover the current gas deficit, let alone additional expected were to convert to gas. Rosneft also recently signed a deal to jointly develop offshore gas in the Mariscal Sucre field and maybe past won’t be prologue, but the field they are planning to develop has about a 20-year history of failed development efforts behind it. In order to develop natural gas production, installing necessary infrastructure as well as paying for converting power plants to run on natural gas requires funds that Venezuela does not have. Another possibility is all of the foreign firms operating in mixed JVs in the country could be forced to cough up more money as the government has demanded or risk losing their production rights. So far there’s been no additional money announced from those companies to the government. If they were to lose production rights, it brings up the question as to who would be left to manage and invest in the ventures and production could suffer even more. Since the Guri dam supplies about 70% of the nation’s power demand, if it fails, social unrest could escalate and the government itself would be at heightened risk of collapse. This could be another reason deals with the government may not happen as it would become riskier to make a deal with a regime that may not be in power in a year’s time. Perhaps OPEC will make an agreement on cutting production at its next meeting in June and higher oil prices will save the day for Venezuela. But given the lack of cohesion at the last Doha meeting, there may be better odds of continued rain for the next few months alleviating the emergency situation. — Benjamin Morse, Mery Mogollon The post Venezuela’s power struggle a race against time: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/09/venezuela-s-power-struggle-a-race-against-time-fuel-for-thought/ http://everythingshale.com/news/2016/may/09/venezuela-s-power-struggle-a-race-against-time-fuel-for-thought/ Mon, 09 May 2016 01:05:50 http://everythingshale.com/news/2016/may/06/incentives-mandates-drive-us-biodiesel-market/ Spot values for soy methyl ester B100 biodiesel arced higher early in the second quarter, with the advance running contrary to the petroleum-based diesel market that faded from March highs amid weak demand and as crude prices dropped back from more than $40 bbl in the face of stiff technical resistance and global oversupply. In the United States, distillate fuel supplied to market was down nearly 25% in the first quarter compared with the five-year average, and 49% below the first quarter 2015 data from the Energy Information Administration shows, due in large part to limited heating demand. Industrial output has been weak too, with the majority of diesel in the US consumed in the industrial and commercial sectors. Freight tonnage jumped in February from January and from February 2015. “While it is nice to see a strong February, I caution everyone not to read too much into it,” said Bob Costello, chief economist with the American Trucking Association, the largest US association for the trucking industry. “The strength was mainly due to a weaker than average January, including bad winter storms, thus there was some catch-up going on in February.” Costello said he remained concerned over “elevated inventories throughout the supply chain. We need those inventories reduced before trucking can count on more consistent, better freight volumes.” Diesel fuel consumption is also under pressure from reduced rail movements amid a steep decline in coal shipments, and with the dramatic drop in drilling for oil and natural gas. Coal consumption in the US was down 52% in 2015 from 2010 statistics from the EIA show, while oil services provider Baker Hughes, Inc. reports a 77% decline in the US rig count from peak activity in October 2014 to the start of the second quarter. In contrast, the market for biodiesel has expanded in the US, able to do so in large part through clarity in a federal demand mandate and a tax incentive. In November 2015, the US Environmental Protection Agency finalized the annual demand mandates under the Renewable Fuel Standard for 2016, with the RFS requiring progressively higher use of renewable fuels through 2022. The renewables are set in five nested categories, with one of those categories biomass-based diesel fuel. Obligated parties under the RFS, which include oil refiners, importers and blenders, must blend a certain amount of renewables within their pool of petroleum products that is based on their production or amount of imports, or purchase an offsetting Renewable Identification Number or RIN. The EPA was well behind in finalizing these targets, with the November 2015 rule including the mandates for 2014 and 2015. EPA also finalized the 2017 mandate for biomass-based diesel fuel, providing greater forward visibility for the US biodiesel industry, which has encountered a great deal of uncertainty on federal incentives over the past few years. EPA was also generous in their carve-out for biomass-based diesel fuel, finalizing demand above the RFS outlined in the Energy Independence and Security Act passed in 2007. This year, the mandate calls for 1.9 billion gallons of biomass-based diesel to be blended with petroleum-based oil products, which can include biodiesel and renewable diesel. The mandate increases to 2.0 billion gallons in 2017. Producers have responded, with biomass-based diesel production in January and February running well above the year-ago period, up 37% and 48% respectively, data from the EPA shows. The industry produced 257 million gallons of the renewable in those two months. The industry also benefits from a tax credit, which was retroactively renewed by the US Congress in December for 2015 and extended through the end of 2016. The US Treasury pays US$1 gallon for blending biodiesel or renewable diesel into diesel fuel or heating oil. Another driver of demand for biodiesel is California’s Global Warming Solutions Act of 2006 usually referred to as AB 32 which required a Low Carbon Fuel Standard to be developed. AB 32 mandates that California reduces the state’s greenhouse gas emissions to 1990 levels by 2020, which is roughly 15% below emissions without such a standard. Under the LCFS, a carbon intensity rating of a fuel or blendstock is assessed, with biodiesel and renewable diesel satisfying the standard and able to generate carbon offsets. The LCFS was seen as a driver for biodiesel demand, but litigation tied up enforcement of the standard. In 2015, legal challenges were resolved, and California readopted the measure. Demand for biodiesel and renewable diesel are expected to grow sharply now that the LCFS is again in force, with California consuming roughly 3.6 billion gallons per year of diesel fuel, according to the California Energy Commission. The commission previously said – “For the long-haul trucking sector, biodiesel and renewable diesel are widely expected to play a key role in displacing diesel fuel.” California has 170,000 miles of highways and major roadways, more than 26 million passenger vehicles and light trucks, and more than one million medium- and heavy-duty vehicles. While accounting for 3.7% of the total vehicle population, medium- and heavy-duty trucks consume more than 20% of total transportation fuel and generate roughly 25% of GHGs, according to CEC. Nationally, biodiesel accounted for 2.4% of the distillate pool consumption in 2015 according to the EIA, reporting 60.9 billion gallons of distillate fuel supplied to market last year. That puts biodiesel consumption at 1.463 billion gallons in 2015. The US trucking industry is increasingly embracing biodiesel. A survey conducted by NTEA, the association for the work truck industry, shows 18% of work truck fleets now use biodiesel, up from 15% in 2015, according to the National Biodiesel Board, adding that more fleets plan on adopting biodiesel. Doyle Sumrall, Managing Director of NTEA, said although “general interest has dropped in recent years due to persistently low oil costs and will likely remain muted until prices rebound,” fleet interest in biodiesel remains strong. According to NBB, the U.S. trade association for biodiesel, Gross Vehicle Weight Class 5-8 vehicles account for 92% of on-road diesel/biodiesel fuel use, and nearly 90% of the medium- and heavy-duty truck OEMs support the use of B20 biodiesel blends.   Schneider Electric offers the leading eBOL solution on the market – DTN Fuel Admin.   Visit our website to find out more on how your operation can benefit. The post Incentives, Mandates Drive US Biodiesel Market appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/may/06/incentives-mandates-drive-us-biodiesel-market/ http://everythingshale.com/news/2016/may/06/incentives-mandates-drive-us-biodiesel-market/ Fri, 06 May 2016 08:38:17 http://everythingshale.com/news/2016/may/06/border-protection-a-lot-more-than-a-wall-is-already-in-place-to-protect-steel-trade/ Donald Trump promises to build a wall along the Mexican border, but what about other ports of entry to the US market? To listen to R. Gil Kerlikowske, Commissioner, US Customs and Border Protection (CBP), is to learn that there is so much more beyond illegal immigration when it comes to border protection — especially when it comes to keeping illegally traded goods and commodities out of the US. Much like people looking to enter the country unlawfully, illegally exported products can evade border agents through a variety of disguises, tricks and fraud — such as transshipment, or deliberately misclassifying points of origin — in an effort to circumvent trade barriers. Earlier this week Commissioner Kerlikowske addressed the annual meetings of the American Iron and Steel Institute and Metals Service Center Institute in Salt Lake City. His topic: “Protecting Our Borders, Protecting Our Industry.” He noted that each year, CBP manages more than 300,000 active importers-of-record, accounting for 33 million commercial transactions. “In 2015, CBP processed more $2.4 trillion of imports, and more than $1.5 trillion worth of US exported goods,” Kerlikowske said. “We also collected approximately $46 billion in duties, taxes, and other fees — the highest amount collected in the past five years.” The domestic steel industry is responsible for a fair share of that collection amount — having aggressively pursued antidumping and countervailing duty remedies in recent years. According to Kerlikowske, there are “approximately 270 AD/CVD orders on steel, alloy and other metal products — 150 on steel products alone.” Critical to the CBP effort is enforcing US trade laws, and its enforcement posture has three prongs: detecting high-risk activity, deterring non-compliance and disrupting fraudulent behavior. “To effectively carry out that mission, CBP coordinates with US industry, 47 interagency partners, and foreign governments,” Kerlikowske said, explaining that such collaboration enables CBP to detect anomalies, trends, and violations in the global supply chain, target high-risk trade, and promote compliance with US laws and regulations. “Global overcapacity in steel and aluminum production is generating significant problems for economies worldwide — but particularly here at home,” Kerlikowske said. He added: “President Obama and his entire administration share your concerns about unfair, unequal competition from foreign imports.” CBP cites its core statutory responsibility to detect and deter the circumvention of AD/CVD laws and to collect all revenue owed to the US government generated by these imports. “The scope and importance of this mission are immense, which is why I am proud to announce the creation of a Trade Enforcement Task Force within CBP’s Office of Trade to focus on AD/CVD evasion, along with other core priorities like interdiction of products manufactured using forced, convict or child labor,”  Kerlikowske told the steel/metals audience. In 2015, CBP, in coordination with other agencies, seized over $900,000 worth of steel and assessed $46 million in penalties for violations of AD/CVD orders on steel products. Just this past January, examinations by CBP port personnel resulted in the identification of more than $9 million in AD/CVD violations on steel plate imports. “CBP is constantly enhancing AD/CVD detection and enforcement protocols, improving our targeting and analysis, and employing all available authorities to disrupt increasingly complex evasion,” Kerlikowske emphasized. He said CBP is also increasing reviews of Chinese steel imports, and using statistical modeling to better identify and predict high risk steel shipments. “CBP has also implemented ‘live entry’ on certain shipments of steel plate from China, which requires that all entry documents and duties be provided before CBP releases cargo into US commerce,” Kerlikowske said. The commissioner pointed out that steel industry-championed Trade Facilitation and Trade Enforcement Act, which includes provisions from the Enforcing Orders and Reducing Circumvention and Evasion (ENFORCE) Act, was signed by President Obama in February. “This law underscores CBP’s commitment to effectively enforcing US trade laws — including AD/CVD evasion, Intellectual Property Rights (IPR) protection, and imports of forced labor-derived goods,” he said. Beyond authorizing CBP for the first time since the agency’s creation in 2003, the law provides an array of new enforcement tools and reporting mechanisms to bolster CBP’s efforts. First, it creates a new Trade Remedy division within the CBP Office of International Trade. Second, it mandates timelines for finalizing determinations of evasion, and makes these determinations reviewable by the Court of International Trade. And third, it requires CBP to share enforcement information with “interested parties” who submit allegations of evasion. The post Border protection: A lot more than a wall is already in place to protect steel trade appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/06/border-protection-a-lot-more-than-a-wall-is-already-in-place-to-protect-steel-trade/ http://everythingshale.com/news/2016/may/06/border-protection-a-lot-more-than-a-wall-is-already-in-place-to-protect-steel-trade/ Fri, 06 May 2016 06:01:17 http://everythingshale.com/news/2016/may/05/estimated-ultimate-recovery-eur-done-fast-done-right/ Evaluating new opportunities is always a high-stakes process for E&P companies.  Expensive decisions must be made quickly, but without sacrificing accuracy. A mistake could cost millions of dollars in losses or opportunity costs . But speed and accuracy can be especially difficult when an operator is evaluating opportunities in a new area with no proprietary data available. The typical process when evaluating opportunities in new areas involves forecasting remaining reserves or estimated ultimate recovery (EUR) of a well or type curve using decline curve analysis. Based on this information, a reservoir engineer could predict whether a single well or series of wells would be a positive investment. The traditional method of forecasting EURs for new areas includes collecting public data that is often incomplete and imperfect, importing it into a modeling platform, and then manually selecting a decline curve model. The decline curve model selected may or may not be the best fit, which leaves plenty of room for error. After running the decline cure analysis, the result is a single output – one EUR estimate that doesn’t provide any indication of the reliability of the prediction or the potential for error. Doesn’t this seem like a risky way to make such expensive decisions? At Drillinginfo, we thought that there had to be a better way to forecast reserves and make decisions about new opportunities – a more innovative, technologically-forward way that would let the data drive these decisions. A one-stop shop so customers can complete the entire EUR forecasting process – from data selection to results – on a single platform. So we came up with a suite of tools to help make faster, more accurate EUR estimates that minimize risk and maximize confidence in important decisions. Let’s see how it works: First of all, relevant data is available at the click of a button. No more searching through messy, incomplete public data. No more exporting and importing data between multiple platforms to run one workflow. Drillinginfo data has been scrubbed and is easily filter-able so customers can quickly find the information they need and immediately begin analysis. Next, the tool is able to automatically select the best decline curve model, eliminating the possibility of human error. Of course, if a customer has a favorite, tried-and-true model, he or she can select from six different models to apply. The results of the model show not just a best estimate for EUR, but the spread around that estimate. Now, instead of relying on a single number to forecast reserves, customers can identify the P10, P25, P50, P75, and P90 values for the estimate as well. The next time you’re evaluating a new opportunity, you don’t have to sacrifice speed or accuracy. With the right technology, you can easily minimize your risk, maximize your accuracy and confidence, and make better decisions. Best of all, this tool is automatically available to all Drillinginfo subscribers. If you have a Drillinginfo login, you already have access. Click on the Production Workspace button the next time you’re in the Product Gallery to try it out. Expect even more new innovations coming your way soon as part of our commitment to continuous improvement and innovation. If you want to learn more about the probabilistic decline curve analysis tool, click here to check out a case study , and/or watch the video below. http://everythingshale.com/news/2016/may/05/estimated-ultimate-recovery-eur-done-fast-done-right/ http://everythingshale.com/news/2016/may/05/estimated-ultimate-recovery-eur-done-fast-done-right/ Thu, 05 May 2016 13:00:13 http://everythingshale.com/news/2016/may/05/enterprise-the-latest-buzzword-as-chinese-iron-rice-bowl-has-to-go/ Yi Xiaorong, 51, was retrenched after having worked at a Wuhan Iron & Steel subsidiary since the eighties. After various setbacks, she now earns Yuan 30,000 ($4,600) a month as a confinement nanny, and is being held up as a shining example of how one can re-emerge successful when armed with a never-say-die attitude. Yi’s skills in providing specialist postnatal care to new mothers and their newborns in their first 30 days as part of a Chinese tradition now see her in high demand. She’s even gone global. In June, she’s set for a two-month assignment in Hungary, followed by the US, where her clients are based — all expenses paid — according to a recent post on the steelmaker’s official WeChat account. That Yi’s departure from the steel company took place years ago and not recently was probably less important to Wuhan Steel than what it hopes to achieve with her story: Lift the spirits of the thousands of workers that may soon be shown the door and nudge them into venturing for jobs outside, as Beijing brings its supply-side structural reforms to bear. The Hubei-based mill, one of the few controlled directly by the central government, has probably been the most plain and transparent in telling its employees that the iron rice bowl — a Chinese expression for a job one can keep for life — will have to go. About 500,000 steel workers may be “reassigned” over the next five years as capacity gets cut 100-150 million mt, according to government estimates. Wuhan Steel isn’t the only one, as other state-owned mills like Tianjin Pipe Group Corp, that tend to have heavier employee social security burdens than their private counterparts, have also been encouraging workers to consider alternative livelihoods in entrepreneurship. The messaging has been consistent across Beijing: The central bank pledged last month greater financial backing for those leaving the steel and coal industries to set it out on their own but lack capital. Banks would also tailor their services to meet the needs of small and micro enterprises. In conversation with people in the industry, it is not uncommon to hear of the coal tycoon whose wealth has been decimated by the plunge in prices, but who lacks ideas as to which gravy train might next deserve an injection of their funds. But it is perhaps not the coal or steel boss that the state is thinking about when it formulates and coordinates its policies. It will be the displaced rank-and-file worker that they’re seeking to support, with hope that some might eventually find themselves out of the woods and follow in Yi’s footsteps. Yi, incidentally, has taken on a few apprentices in her free time who earn “upwards of Yuan 8,000” a month (average income in Wuhan is Yuan 5,800). This editorial was first published in the May 4 edition of World Steel Review . The post Enterprise the latest buzzword as Chinese iron rice bowl has to go appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/05/enterprise-the-latest-buzzword-as-chinese-iron-rice-bowl-has-to-go/ http://everythingshale.com/news/2016/may/05/enterprise-the-latest-buzzword-as-chinese-iron-rice-bowl-has-to-go/ Thu, 05 May 2016 08:14:05 http://everythingshale.com/news/2016/may/04/why-physics-needs-diamonds/ Diamonds are one of the most coveted gemstones. But while some may want the perfect diamond for its sparkle, physicists covet the right diamonds to perfect their experiments. The gem is a key component in a novel system at Jefferson Lab that enables precision measurements to discover new physics in the sub-atomic realm — the domain of the particles and forces that build the nucleus of the atom. Explorations of this realm require unique probes with just the right characteristics, such as the electrons that are prepared for experiments inside the Continuous Electron Beam Accelerator Facility at Jefferson Lab. CEBAF is an atom smasher. It can take ordinary electrons and pack them with just the right energy, group them together in just the right number and set those groups to spinning in just the right way to probe the nucleus of the atom and get the information that physicists want. But to ensure that electrons with the correct characteristics have been dialed up for the job, nuclear physicists need to be able to measure the electrons before they are sent careening into the nucleus of the atom. That's where the diamonds in a device called the Hall C Compton Polarimeter come in. The polarimeter measures the spins of the groups of electrons that CEBAF is about to use for experiments. This quantity, called the beam polarization, is a key unit in many experiments. Physicists can measure it by shining laser light on the electrons as they pass by on their way to an experiment. The light will knock some of the electrons off the path, where they're gathered up into a detector to be counted, a procedure that yields the beam polarization. Ordinarily, this detector would be made of silicon, but silicon is relatively easily damaged when struck by too many particles. The physicists needed something a bit hardier, so they turned to diamond, hoping it could also be a physicist's best friend. The Hall C Compton Polarimeter uses a novel detector system built of thin wafers of diamond. Specially lab-grown plates of diamond, measuring roughly three-quarters of an inch square and a mere two hundredths of an inch thick, are outfitted like computer chips, with 96 tiny electrodes stuck to them. The electrodes send a signal when the diamond detector counts an electron. This novel detector was recently put to the test, and it delivered. The detector provided the most direct and accurate measurement to date of electron beam polarization at high current in CEBAF. But the team isn't resting on its laurels: New experiments for probing the subatomic realm will require even higher accuracies. Now, the physicists are focused on improving the polarimeter, so that its diamonds will be ready to sparkle for the next precision experiment. Editor’s Note: This post was written by a science writer at Jefferson Lab , one of the Department of Energy’s 17 National Labs . http://everythingshale.com/news/2016/may/04/why-physics-needs-diamonds/ http://everythingshale.com/news/2016/may/04/why-physics-needs-diamonds/ Wed, 04 May 2016 16:00:00 http://everythingshale.com/news/2016/may/04/nam-study-shows-economic-benefits-of-natural-gas-and-pipeline-development/ A recent study from IHS Economic, commissioned by the National Association of Manufacturers (NAM), puts into perspective how beneficial natural gas development and natural gas pipeline expansion can be for the U.S. economy, domestic manufacturers, and everyday Americans. The study follows up on a similar report released in January , which highlighted the impact of crude oil pipeline development. Unlike the previous report, however, the current study reveals just how much money families saved thanks to the increase in shale gas production in 2015. As the report notes: “The U.S. economy experienced significant gains in 2015: IHS estimates that economic benefits from increased domestic shale gas production and the accompanying lower NG [natural gas] prices include contributions of $190 billion to real gross domestic product (GDP), 1.4 million additional jobs, and $156 billion to real disposable income.” (p. 4) According to the NAM , that $156 billion in disposable income is equivalent to an average of $1,337 put back into the pockets of American families. Other highlights from the report include : Natural gas access added 1.9 million jobs across the U.S. economy in 2015, including 60,000 in manufacturing and 347,000 from new natural gas transmission lines alone. Total natural gas demand is expected to increase by 40 percent, thanks in large part to manufacturing and power generation. Domestically produced supply is also projected to increase 48 percent by 2025 in order to meet the increase in demand. Thanks to technological improvements in energy development, such as fracking and horizontal drilling, the report predicts energy intensive industries (chemicals, refining, metals, etc.) will outperform the U.S. economy through 2025. According to the U.S. Energy Information Administration (EIA), the United States is currently the world’s largest producer of natural gas. Spurred on by fracking, this abundance of natural gas dropped the commodity’s price for industrial use to almost a 20-year low . This is great news for manufacturers, as the report estimates that 80 percent of industrial demand for natural gas comes from the manufacturing sector. Used for fuel in processes like melding or drying, as well as a feedstock in refining and chemical production, natural gas not only save U.S. manufacturers money, it allows them to be more competitive in the global market. As the report states: “Going forward, lower natural gas prices will result in benefits to consumer purchasing power and confidence, higher profits among businesses, and improvements in cost-competitiveness for domestic manufacturers relative to their international competitors.” (p. 4) But as the report shows, the increase in natural gas production and demand from manufacturers creates a need for expanded infrastructure to gather, transport, store and export the natural gas. For example, onshore production of natural gas rose 30.6 percent between 2007 and 2013 according to the EIA. To meet the increasing supply, IHS estimates that around $25.8 billion was spent to construction 6,028 miles of new natural gas transmission lines in 2015 alone – and that growth is projected to continue. According to the report: “While the rate of capacity additions could slow over the short term, additions are needed over the medium to long term to meet IHS’s view of supply and demand fundamentals.” (p. 41) Continued expansion of natural gas infrastructure aids employment, as every mile of pipeline equates to jobs created. These jobs are either from building the structure (direct), or created in industries that benefit from the pipeline expansion (indirect), such as manufacturing. According to the report: “The accompanying table shows that for every mile of NG transmission line pipeline built, a total of 57.9 jobs would be created in the United States, including 9.9 manufacturing jobs per mile.” (p. 39) Overall, natural gas is vital to the U.S. manufacturing sector and economy as a whole. As this new report shows, increasing natural gas production in the United States brought about by fracking, coupled with increasing demand from industries such as manufacturing, makes natural gas infrastructure essential. While providing thousands of jobs and contributing billions to the economy, new natural gas pipelines allow us to take advantage of the vast shale resources that fracking gives us access to, keeping U.S. manufacturers competitive internationally and putting money back into the pockets of everyday Americans. http://everythingshale.com/news/2016/may/04/nam-study-shows-economic-benefits-of-natural-gas-and-pipeline-development/ http://everythingshale.com/news/2016/may/04/nam-study-shows-economic-benefits-of-natural-gas-and-pipeline-development/ Wed, 04 May 2016 12:35:58 http://everythingshale.com/news/2016/may/04/closed-loop-the-disruption-of-electricity-and-fuel-distribution/ The new range of electric cars are priced in the $35,000-$40,000 bracket. Solar PV and home energy storage costs are falling fast. A green, closed loop of self-generation and consumption is on offer that could meet not just an individual’s electricity needs, but their transport requirements as well. These early adopters can opt out of the megalithic supply and distribution chains of the oil and electric industries. It may not quite add up yet, but for many, the difference is so small it doesn’t matter. Transportation and electricity provision are two fairly distinct markets, each with their own supply chains and market structures. Liquid fuels are distributed by ships, pipes, trains and trucks, electricity by wires. Both operate on a massive scale. Renewables have disrupted these megalithic industries. They have done so in many ways, but there are three that are particularly important:  the reversal of the trend towards scale, the move behind the meter to allow self-generation, and the simplification of technology. This is a powerful combination because it makes electricity generation accessible to the consumer. But it also means that if electricity becomes a means of transport then it puts transport fuel behind the meter (or pump) as well. Solar panels are the perfect embodiment of this: they are small, safe, modular and require no operation and maintenance. They cut through the barriers to market entry of cost and expertise that formerly dominated the electricity industry, representing both a huge addition of capacity and a mobilization of capital which is not controlled by the electricity industries’ traditional incumbents. This has given rise to the much-documented ‘utility death spiral.’ This is the idea that as consumers source less electricity from the grid, the unit cost of maintaining the grid for its remaining users increases, creating an unsustainable spiral of rising costs. These are passed from the grid operator to generators and consumers, increasing the incentive to disengage. It is a vicious circle in which small-scale generation becomes increasingly viable as it escapes the common costs of distribution. However, the potential for change goes even further. Power is about to be transferred in part to the end user not just for electricity generation but for transportation. And it will rejuvenate or create a different set of major industrials — the original equipment manufacturer. The PV panel, battery and EV combination implies a revolutionary reformulation of both the transport and electricity generation supply chains. The idea is that the homeowner, using solar PV panels, generates electricity to supply both home and car. The storage capacity of this new economic unit would be that of the car battery and the home battery combined. The home owner, in theory at least, would have no need of an electric or gas utility, or grid, except as back-up, and no need of a gasoline station and the lengthy supply chains that fill it. They would have moved from a continual supply and small-scale expenditure model to lump sum investment in major pieces of equipment that require little servicing, a fundamental change in the relationship between energy supplier, whether electricity or liquid fuel, and the end-user. Energy would no longer be about supply and distribution, but equipment provision: solar panels, inverters, batteries and car bodies. Does it pay? According to US Federal Highway Administration data, the average American drives 13,476 miles a year, which, with a 24 miles per gallon vehicle, means consumption of 561.5 gallons of gasoline. The average retail price of gasoline of all grades in the US in early April was put by the US Energy Information Administration at $2.185/gal, which means the average US driver will spend $1,227 on fuel a year. The average price of residential electricity in the US as of January was 12.01 cts/kWh. And 0.3 kWh will drive an EV one mile. So the equivalent fuel cost for an EV for the average US driver would be $485.54, giving an annual saving of $741.46. As there are fewer mechanical components in an EV, servicing costs are also expected to prove lower than a typical gasoline engine. With EVs sub-$40,000, the typical US driver could buy an EV — and the solar panels and home energy storage system to power it — for somewhere in the region of $75,000 and have fuel and electricity for 20 years. The key trends are that the price of lithium-ion batteries are very close to the point where EVs are genuinely competitive vis-à-vis a conventional car, and solar PV generation is close to competitive vis-a-vis retail electricity prices. But perhaps the really important point is that electricity (even solar-generated electricity) is cheaper as a transport fuel than oil, even when the latter is down in the dumps at $40/barrel. The post Closed loop: The disruption of electricity and fuel distribution appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/04/closed-loop-the-disruption-of-electricity-and-fuel-distribution/ http://everythingshale.com/news/2016/may/04/closed-loop-the-disruption-of-electricity-and-fuel-distribution/ Wed, 04 May 2016 10:51:41 http://everythingshale.com/news/2016/may/04/watch-creepy-anti-fracking-protestor-says-creepy-vaguely-threatening-things-to-pregnant-pro-hf-advocate-me/ We’ve chronicled in this space before how campaigners aligned with anti-development groups often use women and children as rhetorical props, citing without substantiating how development, if allowed to proceed, will have deleterious impacts on the health of these categories of folks in particular. It’s all part of an increasingly popular strategy among activists to encourage their spokespeople to “[not] worry about highly technical information,” and just use emotional appeals instead.  For example, children are frequently used as a prop by anti-fracking activists, as noted by a member Northern Wayne Property Owners Alliance: “The use of children in a propaganda war against fracking is scary.  It was used in an attempt to build the case in Dimock.  If the anti natural gas folks were so sure the air was polluted and causing all kinds of ill effects, why did they take children there to act as poster fodder?” This tactic hit home in Youngstown, Ohio, where Susie Biersdorfer of Frack Free Mahoning Valley rehashed debunked talking points on birth defects to me (I am 9 months pregnant). Here’s the video of what happened: Frack Free Mahoning Valley, Susie Biersdorfer:  So Jackie I hope you’ve read some of the scientific literature about birth defects…and I see that you are , you know, pregnant, so I hope you’re not going out and visiting frack wells right now. Do you know about the scientific studies out in Utah and Colorado? Energy In Depth, Director, Jackie Stewart: Wow. You are seriously attacking me, as a pregnant woman? Frack Free Mahoning Valley, Susie Biersdorfer:  I’m not attacking you; I’m just letting you know that. Energy In Depth, Director, Jackie Stewart: You’re warning me? Frack Free Mahoning Valley, Susie Biersdorfer:  I am. Frack Free Mahoning Valley, Susie Biersdorfer: “You know what, that’s what she gets” This is certainly not the first time an activist has attacked a mom for having a favorable opinion on developing oil and natural gas, nor is it the first time that ban-fracking groups have tried to push debunked studies surrounding infertility, miscarriages, and birth defects as a means to evoke fear among women.  It’s happening all across the country. Take a look at actress Jerry Hall, spokesperson for “talkfracking.org”, pictured below. Even before birth, activists are attacking children and their mothers, by using shameful tactics, like we see above by both actress Jerry Hall and FrackFree Mahoning Valley organizer Susie Biersdorfer, through politicizing infant deaths and birth defects. By the way, the “scientific studies out in Utah and Colorado” that Susie Biersdorfer references in her  outburst have  been debunked by the Colorado Department of Public Health and Environment’s director and chief medical officer, Larry Wolk, who said , “Many factors known to contribute to birth defects were ignored in this study.” Sadly, this propaganda targeting pregnant women begins before the birth of a child and continues on into early childhood. For example, take a look at a protest in Colorado , where young children are used as  pawns in misinformation propaganda, highlighting the gross indoctrination of the natural gas opposition. Fast forward to just a few years, and the next step is to graduate the early childhood indoctrination into “Lobbying for Kids.” Take a look at this video which clearly shows, Food & Water Watch Western Region Director Sam Schabacker has no problem using children to promote Food & Water Watch’s political agenda, which calls for national and statewide bans on hydraulic fracturing and the energy production it makes possible . EID guest columnist, Betty Sutliff noted back in 2013 in Message to Natural Gas Opposition: Stop Exploiting Children! This is the sobering reality of the green agenda, the Keep It in the Ground Movement , 350.org , and CELDF ’s so-called “Bill of Rights movement.  It’s personal, and it’s designed to scare the public, by any means necessary – and worst of all, it’s based on “science” that doesn’t pass muster. http://everythingshale.com/news/2016/may/04/watch-creepy-anti-fracking-protestor-says-creepy-vaguely-threatening-things-to-pregnant-pro-hf-advocate-me/ http://everythingshale.com/news/2016/may/04/watch-creepy-anti-fracking-protestor-says-creepy-vaguely-threatening-things-to-pregnant-pro-hf-advocate-me/ Wed, 04 May 2016 09:13:45 http://everythingshale.com/news/2016/may/04/misleading-claims-about-us-barriers-to-iran-europe-financial-ties/ Few people understand that Iranian banks do not live up to the standards U.S. agencies require of all foreign financial institutions, and that this shortcoming has nothing to do with the nuclear deal. On April 25, following the first post-Implementation Day meeting of the joint P5+1/Iranian committee in Vienna, Deputy Foreign Minister Abbas Araqchi stated that all parties had approved the creation of a task force to address his government’s complaints about sanctions removal related to the nuclear deal. This was the latest step in Iran’s largely successful campaign to blame the United States for the various problems that continue to hinder its businesses, especially in terms of accessing the international banking system. On April 15, Iranian foreign minister Mohammad Javad Zarif told reporters that Tehran and the EU “will put pressure on the United States to facilitate the cooperation of non-American banks with Iran.” Visiting EU foreign policy chief Federica Mogherini was present at the joint press conference, and news accounts of the event implied that she agreed with Zarif, though she did not say so directly. The Wall Street Journal wrote, “The absence of large western banks to underwrite deals and set up broad financial links is stymying the delivery of concrete projects, [and] European officials fear this could spark a downward spiral of mistrust over the nuclear accord.” Similarly, an Iranian business consultant told the New York Times , “If the situation doesn’t change for the better — banking, more deals — for Iran this will be a growing risk for the deal.” The paper also quoted European Parliament member Marietje Schaake complaining that “Europe is being held hostage by American policy…We negotiated the nuclear deal together, but now the U.S. is obstructing its execution.” Indeed, Washington has erected significant barriers to Western banks seeking to work with Iranian banks. Yet the reasons for this practice have nothing to do with the nuclear issue. In fact, some of the most significant obstacles are completely unrelated to any of the deep foreign policy differences between the United States and Iran. THE TAX AVOIDANCE EXAMPLE One of the most serious barriers that banks and insurance companies face when contemplating transactions with Iranian financial institutions is compliance with tax avoidance laws. The 2010 U.S. Foreign Account Tax Compliance Act (FATCA) places tough requirements on foreign financial institutions (FFIs) to report accounts of U.S. taxpayers. As the IRS guidance on the law explains, “FFIs that do not both register and agree to report face a 30% withholding tax on certain U.S.-source payments made to them.” Agreeing to report means dealing only with FATCA-compliant FFIs. In practice, almost every financial institution in the world insists that its correspondents be FATCA-compliant because that is the only way to avoid the heavy withholding tax. FATCA is hardly a secret: its long rollout was much commented on in the financial press, including Persian Gulf media. And when the legislation conflicted with local laws protecting bank secrecy, many countries worked with the United States to reach “intergovernmental agreements” (IGAs), which allow FFIs to report the required information to their home government instead of the IRS; if Washington has any questions about accounts that U.S. taxpayers hold with these institutions, it directs them to the government. FFIs cannot credibly complain that FATCA represents extraterritorial overreach given the current international environment of hostility to perceived tax avoidance by multinational companies. Many European countries are in the process of implementing rules similar to FATCA, in line with the Global Account Tax Compliance program proposed by the Organisation for Economic Co-operation and Development. Such proposals have been supercharged by the Panama Papers, a trove of leaked documents from the law firm Mossack Fonseca reportedly revealing tax avoidance efforts by a wide assortment of financial institutions, government officials, and other individuals around the world. In a statement regarding the leak, the firm insisted that it fully cooperates with investigations of possible FATCA violations. And White House Press Secretary Josh Earnest has sung the praises of FATCA for protecting the United States against the type of foreign tax avoidance apparently detailed in the papers. The IRS has good reason to worry about tax avoidance by American citizens or green-card holders with income or property in Iran, which they may not have declared because it could violate U.S. sanctions (one of the many examples of sanctions-related complications for ordinary people). Such individuals resident abroad — including people born in the United States when their parents were studying there but who have never lived in America — are often surprised to find they are liable to pay U.S. taxes on their worldwide income. While there is no hard data on the matter, many tens of thousands of U.S. citizens or green-card holders likely reside in Iran. If Iran wants to protect the privacy of its financial institutions and citizens, it can do what many other governments have done: sign an IGA with the United States. Failing that, each Iranian bank will have to register with the IRS for a Global Intermediary Identification Number (GIIN) — otherwise, every foreign institution that has financial dealings with them could face the 30 percent tax on U.S.-source payments. Thus far, only one Iranian bank has reportedly registered for and received a GIIN: the Hamburg branch of the state-owned Bank Melli Iran. Some other Iranian-owned foreign-incorporated banks may be covered by an IGA; those not covered or registered can expect great difficulties interacting with non-Iranian financial institutions, regardless of any action Washington takes on the sanctions front. Indeed, FATCA has nothing to do with the nuclear sanctions and is most assuredly not directed at Iran alone. Neither the State Department nor the Office of Foreign Assets Control (which administers Treasury Department sanctions) has any say over how the law is implemented. Yet from the perspective of a foreign financial institution, FATCA is part of the U.S. policy mix that impedes transactions with Iran, as with any other non-FATCA-compliant country. POLICY IMPLICATIONS On April 21, Zarif told the New York Times that the nuclear deal “requires the United States to allow European financial institutions to have peace of mind for dealing with Iran.” At a joint press appearance with Zarif the next day, Secretary of State John Kerry insisted, “The United States is not standing in the way, and will not stand in the way, of business that is permitted in Iran.” Many people likely regard Kerry’s statement as misleading because various agencies of the U.S. government — though not the State or Treasury Departments — do in fact stand in the way of Iranian banks gaining full access to the international financial system. Yet these barriers stem from the simple fact that Iranian firms are not following the same rules applied to all other foreign banks and insurance companies. Therefore, rather than assuring Europeans they can have peace of mind in dealing with Iran, U.S. regulatory and tax agencies will continue to insist that EU financial institutions apply the same tough rules to their Iranian counterparts that they apply to all others. Observing those standards is a daunting task for Iranian banks, which are not yet up to the stricter international norms adopted during the years when their country was under nuclear sanctions. These new rules are very burdensome; major international banks spend billions of dollars implementing them. Newly confronted with all they must do, no wonder Iranian banks complain. In a speech posted to his website on April 27, Supreme Leader Ali Khamenei argued, “On paper the United States allows foreign banks to deal with Iran, but in practice they create Iranophobia so no one does business with Iran.” If Washington is worried that such sentiments will lead people to accuse the United States of not living up the nuclear deal, then the best defense is a good offense. Rather than implicitly accepting Zarif’s formulation that the U.S. government has to reassure European banks, Washington should instead point out that if Iran wants to enjoy the fruits of the nuclear deal, it must join the rest of the world in implementing the tough standards adopted over the past decade regarding tax avoidance, financial reporting, money laundering, and other issues. The message should be clear: any financial institution that fails to implement those standards, no matter what country it calls home, will be under close U.S. scrutiny. Patrick Clawson is the Morningstar Senior Fellow and director of research at The Washington Institute. Originally Posted on April 27, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/may/04/misleading-claims-about-us-barriers-to-iran-europe-financial-ties/ http://everythingshale.com/news/2016/may/04/misleading-claims-about-us-barriers-to-iran-europe-financial-ties/ Wed, 04 May 2016 09:00:22 http://everythingshale.com/news/2016/may/03/energy-department-announces-25-million-to-accelerate-integration-of-solar-energy-into-nation-s-electrical-grid/ WASHINGTON, D.C. - As part of the Energy Department's ongoing efforts to modernize the nation's grid through the Grid Modernization Initiative, the Energy Department today announced $25 million in available funding through an effort called Enabling Extreme Real-Time Grid Integration of Solar Energy (ENERGISE) to help software developers, solar companies, and utilities accelerate the integration of solar energy into the grid. Since President Obama took office, the amount of solar power installed in the U.S. has increased 23-fold-from 1.2 gigawatts in 2008 to an estimated 27.4 gigawatts in 2015, with one million systems now in operation. One of the key challenges to further solar deployment is the ability to integrate distributed generation sources like rooftop solar panels into the grid while balancing that generation with traditional utility generation to keep reliable and cost-effective power flowing to homes and businesses. Today's funding opportunity announcement will help support companies working to meet that challenge. ENERGISE specifically seeks to develop software and hardware platforms for utility distribution system planning and operations that integrate sensing, communication, and data analytics. These hardware and software solutions will help utilities manage solar and other distributed energy resources on the grid and will be data-driven, easily scaled-up from prototypes, and capable of real-time monitoring and control. Our ongoing grid modernization work will help accelerate the widespread adoption of the clean energy resources that will define our low-carbon future. This funding will help that mission by supporting industry partners working to integrate, store, and deploy solar energy throughout our electric grid,†said Lynn Orr, Energy Department Under Secretary for Science and Energy. In doing so, we hope to drive down costs and encourage even more American homeowners and businesses to install solar systems.†Through industry and utility partnerships, the expected 10-15 solutions developed with this new funding will be field-tested by utilities to demonstrate their performance and value in real-world operating environments. These live demonstrations and research findings will provide valuable new tools for utilities and grid operators across the nation. This funding program builds upon current and past research in systems integration  technologies that support the widespread deployment of solar energy while maintaining the reliability of the electricity grid. The full funding opportunity announcement, including application requirements, can be found on Energy.gov . The SunShot Initiative , which is managed by DOE's Office of Energy Efficiency and Renewable Energy (EERE), will oversee the projects associated with this funding opportunity. SunShot is a collaborative national effort launched in 2011 that aggressively drives innovation to make solar energy cost competitive without subsidies with traditional energy sources before the end of the decade. The Grid Modernization Initiative is a comprehensive effort involving DOE's Office of Electricity Delivery and Energy Reliability and EERE to help shape the future of our nation's grid and solve the challenges of integrating conventional and renewable sources with energy storage while ensuring that the grid is resilient and secure to withstand growing cybersecurity and climate challenges. http://everythingshale.com/news/2016/may/03/energy-department-announces-25-million-to-accelerate-integration-of-solar-energy-into-nation-s-electrical-grid/ http://everythingshale.com/news/2016/may/03/energy-department-announces-25-million-to-accelerate-integration-of-solar-energy-into-nation-s-electrical-grid/ Tue, 03 May 2016 16:00:25 http://everythingshale.com/news/2016/may/03/blm-finds-no-significant-impact-in-wayne-national-forest-from-oil-gas-leasing/ Over the last several months, the federal Bureau of Land Management (BLM) has been deliberating whether to offer 40,000 acres of minerals located in Monroe, Noble, and Washington Counties in Ohio for competitive lease sale for oil and natural gas development under the surface of the Wayne National Forest (WNF). Last week the agency released its long-awaited Environmental Assessment (EA) announcing that it found “no significant impact” that would result from a decision to move forward with these lease sales. An Athens News headline put it well explaining, “ Leasing to drillers won’t hurt national forest.”  Specifically, District Manager Dean Gettinger of the BLM said , “Based upon a review of the EA and supporting documents, I have determined that the Proposed Action is not a major Federal action, and will not significantly affect the quality of the human environment, individually or cumulatively, with other actions in the general area.” While the final EA will not be issued until public comment has been accepted for the draft, this is welcome news. BLM is mandated by federal law to develop our nation’s minerals, under the Mineral Leasing Act of 1920 , the Federal Land and Management Act of 1976, the Federal Onshore Oil and Gas Leasing Reform Act of 1987 and the Energy Policy Act of 2005.  According to the WNF document, the BLM clearly states that, “ The leasing of federal mineral is vital to the United States as it seeks to maintain adequate domestic production of this strategic resource. The oil and gas leasing program managed by the BLM encourages the sustainable development of domestic oil and gas reserves which reduced the dependence of the United States on foreign sources of energy as part of its multiple-use and sustainable yield mandate.” (emphasis added) The U.S. Forest Service (FS) and the BLM have a very long history involving oil and gas development. The WNF has been managing drilling for nearly a century and continues to do so today with over 1,200 active wells on the surface of national forests. Property Rights Are At the Heart of the WNF Debate Unlike most other national forests, the WNF is not comprised of contiguous acreage. It is a patchwork of acreage adjacent to privately held minerals, and even encompasses private minerals under the surface of the WNF. In fact, 59 percent of rights to the minerals beneath the WNF are actually privately owned and scattered throughout the forest. This makes it virtually impossible for private landowners to have their minerals developed if federal leasing is not allowed. Given this unique “split-estate” scenario—where the federal government owns the surface rights and private landowners own the minerals beneath the majority of land—it is easy to see how this debate is really one that centers around property rights. This focus on property rights was especially clear over the last few months as landowners turned out in force when the national Keep It in the Ground movement parachuted into local communities, disrespecting our laws, our regulators, and most importantly the local men and women who actually live and work in the Buckeye State.  Throughout the rounds of public meetings that resulted in over 3,400 public comments, landowners, elected officials, unions, economic development groups, and concerned citizens stood up against the Keep It in the Ground organizers. These locals told BLM they support leasing in the forest and the protection of their property rights.  They asked the agency to base its decision on sound science and facts instead of the emotional rhetoric coming from outsiders that don’t speak for them. Latest EA Shows Local Voices Were Heard and Science Trumped Rhetoric At the end of the day, it appears the BLM not only heard these voices, but also took into consideration discussions held with native tribes, and consultation and external scoping with other coordinating state and federal regulatory bodies. The result is an Environmental Assessment that is extremely comprehensive and lays out a compelling case as to why leasing should be permitted to move forward. Further, the EA also found that the Proposed Action is in compliance with the Final Revised Land and Resource Management Plan, Wayne National Forest (2006 Forest Plan) , which incorporated a Supplemental Information Report (SIR) that was added to the plan in 2012. This should not be surprising for anyone who has actually read the SIR given that the most recent EA was essentially conducted as an added layer to already existing environmental reviews that had been previously made by the U.S. Forest Service, the Wayne National Forest, and the Bureau of Land Management. Recalling that activist groups completely discounted the SIR and its merit only a few months ago when they submitted their comments, it’s clear their case did not hold water, yet again. Table ii highlights the potential impacts leasing in WNF (Proposed Action) would have on forest resources. Obviously, by not allowing leasing (No Action Alternative) there would be “no effect” to these resources, but also notice that there are “no direct impacts from leasing” on every one of them, resulting in “minor cumulative impacts” overall to the forest system. Now, also on the chart is a category for the ‘Socioeconomic and Environmental Justice’ impact to the forest.  Unlike the other categories highlighted in the above, in this section, which was included following intense public outcry from landowners, BLM found that there will in fact be negative impacts if leasing is prohibited . According to the BLM the decision not to lease would result in: “Loss, reduction, or delay of revenues generated through leasing and royalties.” BLM goes on to say that should leasing be allowed, “ Leasing would generate revenues that would be shared with counties . Reasonably foreseeable development may generate additional royalties, economic stimulation in form of additional employment, output, and support services. Environmental justice concerns are not expected to occur , since private landowners have the option to influence lease terms for operators using their lands to access federal minerals.” In other words, oil and gas development within the WNF would have very minor, if any, environmental impacts, yet would be a huge benefit to the local economy.  The BLM’s recent decision to move forward with leasing through their Proposed Plan is in fact consistent with its mandate from Congress, and is what would be expected with findings such as this.  An added bonus is that this decision comes after the majority stood up to the national (and international) groups that are calling the shots behind the Keep It In The Ground movement .  After all, as the Department of Interior Secretary Sally Jewell recently pointed out , “We are a nation that continues to be dependent on fossil fuels… It oversimplifies a very complex situation to suggest that one could simply cut off leasing or drilling on public lands and solve the issue of climate change.  You can’t just cut it off over night and expect to have an economy that is in fact the leader of the world.” http://everythingshale.com/news/2016/may/03/blm-finds-no-significant-impact-in-wayne-national-forest-from-oil-gas-leasing/ http://everythingshale.com/news/2016/may/03/blm-finds-no-significant-impact-in-wayne-national-forest-from-oil-gas-leasing/ Tue, 03 May 2016 15:09:42 http://everythingshale.com/news/2016/may/03/new-noaa-study-finds-low-methane-emissions-attempts-to-mask-data-with-ethane-focus/ A new study by researchers at the University of Michigan and the National Oceanic and Atmospheric Administration (NOAA) has produced some pretty alarmist headlines in recent days, none more foreboding than “ Fracking in the U.S. causing global surge in dangerous gas .” One might assume the “dangerous” gas in question is methane, considering it has become an obsession of opponents of shale development in recent years, based on the inaccurate notion that fugitive methane emissions are wiping out natural gas’ tremendous climate benefits. But this study actually found such low levels of methane in the Bakken Shale region that they didn’t even bother to include estimates in their report. Which begs the question: How does a study finding low methane emissions still manage to generate hyperbolic headlines such as the one above? The answer: by focusing on ethane rather than methane, and selling them as equals. Based on a series of measurements from flights in 2014 over North Dakota and Montana, the study claims the Bakken is solely responsible for two percent of the world’s atmospheric ethane emissions and is also single-handedly responsible for an upward spike in ethane emissions the past five years after more than a decade of declines. This entire hypothesis is based on a single 2009 report of increased ethane emissions from a remote mountaintop in Europe, by the way. Setting aside for a moment how strange the latter notion seems, it is more important to understand that ethane emissions have largely been ignored by fracking opponents and the media up to this point for a reason. Here are three things you need to know about the study that (most) of the media missed, resulting in alarmist headlines popping up left and right. Fact #1: Study finds low methane emissions; chooses to focus on ethane instead The study states , “… This study focused on assessing the atmospheric impact of oil and gas production in the Bakken with continuous measurements of methane , ethane, carbon dioxide, water vapor, carbon monoxide, ozone, black carbon, wind, pressure, and temperature as well as whole-air flask samples for analysis of dozens of other compounds.” But you wouldn’t know what their methane measurements were by reading the actual study.  Fortunately, the Washington Post asked the researchers about their methane data.  From the Post : “The new study suggests that the Bakken formation has accounted for much of the global increase in ethane emissions while emitting comparatively low levels of methane simultaneously .” Venting and flaring of natural gas are thought to be the primary source of atmospheric ethane, and because of this, scientists have long assumed detection of significant atmospheric ethane correlates directly with high methane leakage. This study found the opposite to be true, however, as the authors concede in the report : “Analyses that assume a temporally constant oil and gas production ethane: methane emission ratio lower than present in the Bakken, or other productive basins, will erroneously conclude a large fossil methane emissions increase since 2010 …” The Washington Post article   expands on this major finding, which virtually every other media outlet ignored: “They found that the ratio of ethane to methane produced by the Bakken was much higher than what has been observed in many other shale oil and gas fields in the United States — an observation that could have big implications for future methane assessments , which are important for climate scientists. “In many oil and gas fields, methane is often the primary natural gas present — sometimes accounting for up to 90 percent or more of the gas that is released during extraction. Ethane often tends to be present in smaller proportions.  In the Bakken, however, the researchers found that ethane accounted for nearly 50 percent of all the natural gas composition, while methane was closer to 20 percent .” Though the report doesn’t list the methane emissions detected by its flights over the Bakken, the researchers estimated 250,000 tons of annual ethane emissions in the Bakken. So by the Washington Post’s math, annual methane emissions would be just 100,000 tons annually. In other words, not only are methane emissions in the Bakken low, scientists can no longer assume that the detection of significant ethane emissions mean that high methane emissions are inevitable, as was assumed in a recent Karlsruhe Institute of Technology (KIT) study that claimed oil and gas production are driving up global methane emissions. The Washington Post article elaborated on this point further: “And when ethane emissions began rising again, it was logical to assume that methane emissions — from oil and gas development, specifically — were also likely on the rise. But as the Bakken study points out, this is not necessarily the case… .” Christian Frankenberg, an environmental science and engineering professor at the California Institute of Technology and a researcher at NASA’s Jet Propulsion Laboratory, pointed out in the Washington Post article that making an incorrect assumption about the ratio of methane escaping compared to ethane : “might easily overestimate the methane increases in these areas.” This conclusion further solidifies a separate NOAA and the National Institute of Water and Atmospheric Research (NIWAR) study that found the recent rise in global methane emissions is attributable to biogenic sources, rather than oil and gas. The lead author of the study, Hinrich Schaefer of NIWAR, said to Climatewire : “Currently increasing methane levels are caused not by fossil fuel production…” Fact #2: Ethane is a non-issue for global warming and is not really on EPA’s radar Many media reports on the study have played up the fact that ethane is a Volatile Organic Compound (VOC) that can contribute to ground-level ozone. Several stories have also pointed out that ozone ranks as the third-largest contributor to human-caused global warming after carbon dioxide and methane. But these media reports fail to mention that ethane’s atmospheric lifespan is so short (roughly two months) that it isn’t considered a major factor in climate change. Ethane’s role in global warming is so insignificant, in fact, that ethane appears just five times in the 558-page 2016 EPA GHG Inventory , which describes non-methane VOCs as follows: “Non-methane volatile organic compounds include substances such as propane, butane, and ethane. These compounds participate, along with NOx, in the formation of tropospheric ozone and other photochemical oxidants. NMVOCs are emitted primarily from transportation and industrial processes, as well as biomass burning and non-industrial consumption of organic solvents. Concentrations of NMVOCs tend to be both short-lived in the atmosphere and spatially variable .” The study even notes that ethane acts as a greenhouse gas with a “modest global impact.” A 1999 National Academies Press study on VOC emissions from vehicle exhaust further elaborates as to why ethane is not a significant contributor to tropospheric (ground-level) ozone: “If one were to increase the total mass of VOC emissions in a city, such as Los Angeles, by 20% through additional emissions of ethane, ozone levels would increase slightly . However, if the same amount of propene were added instead, there would be a large increase in ozone. Why the big difference between the two, given that both are rather simple hydrocarbons? The primary cause of the difference is the differing rates at which these two species react in the atmosphere. Ethane has an atmospheric lifetime of weeks. Little of the ethane emitted in an urban area reacts within that area before it is transported away. Its contribution to ozone formation within the urban area is therefore very small . “During the early years of ozone mitigation, it was recognized that there were some organics, for example ethane, that did not contribute significantly to smog formation on urban scales , whereas others, such as propene, did.” Fact #3: North Dakota has good air quality The EPA has the following to say regarding formation of ground-level ozone: “… Ozone is likely to reach unhealthy levels on hot sunny days in urban environments. Ozone can also be transported long distances by wind.  For this reason, even rural areas can experience high ozone levels.” So if ethane levels were truly driving increased tropospheric ozone in the Bakken in North Dakota – a predominantly rural sate –one might surmise that the Bakken region would have significant air quality issues. But that simply has not been the case, and the authors of this study were unable to find any evidence of elevated ground-level ozone in the areas they monitored: “Emissions of ethane, methane, and other VOCs from the Bakken have the potential to impact ozone formation on a variety of spatial scales. Local ozone enhancements observed during the Spring 2014 airborne study were relatively small due to low temperatures, large solar zenith angles, and generally high wind speeds . Initial GEOS-Chem modeling (for details see Supporting Text S1) suggests that in summer, when surface ozone production peaks, up to 4 ppb of additional ozone are produced in plumes downwind of the Bakken region due to emissions of alkanes with composition as in Table 1 (Figure 3, Supporting Movie S1).” EPA data also shows that there isn’t an ozone problem in North Dakota, as NONE of North Dakota’s counties are currently listed in non-attainment for by either the EPA’s 2008 or 2015 standards. The latest State of the Air Report from the American Lung Association (ALA) found that six of the eight North Dakota counties with air quality monitors received “B” grades. ALA spokesman Robert Moffitt also notes in an article posted on publicnewsservice.org that North Dakota’s maintained good air quality “because natural gas and other alternatives…are just so much cheaper now.” It’s a similar story across the entire country , for that matter. Nitrogen dioxide (NO2) – which when paired with sunlight and other things, can contribute to ground-level ozone formation and is linked to respiratory issues, according to EPA – has declined by 52 percent as natural gas use skyrocketed between 2005 and 2013. Data from the EPA and the U.S. Energy Information Administration (EIA) also show a 60 percent decrease in PM 2.5 from 2005 to 2013. The same kind of dramatic decline can be seen in emissions of sulfur dioxide, which decreased by 68 percent from 2005 to 2013. According to EPA , sulfur dioxides (SOx, SO2 and SO3) can “penetrate deeply into sensitive parts of the lungs and can cause or worsen respiratory disease, such as emphysema and bronchitis, and can aggravate existing heart disease, leading to increased hospital admissions and premature death.” SO2 in particular is “ of greatest concern ” for health, according to EPA. Most importantly, increased natural gas use has spearheaded a nine percent decline in CO2 emissions in the U.S. since 2005. Over that same period, U.S. natural gas production increased by 35 percent, and natural gas-fired electricity generation increased by 50 percent. Natural gas became the No. 1 source of electrical generation in 2015. Not coincidentally, recent EIA data shows a two percent decline in carbon emission from electrical generation – the No. 1 source of GHG emissions – last year alone, which has helped the U.S. become the only major country to reduce CO2 emissions in recent years, as the following EID graphic illustrates: Bottom line is that CO2 is greenhouse gas of most concern for climate change, which is why  University of Oxford climate scientist Raymond Pierrehumbert recently told The Washington Post that reducing CO2 should be the major focus of efforts to combat climate change rather than methane: “People are placing too much emphasis on methane. And really, people should prove that we can actually get the CO2 emissions down first, before worrying about whether we are doing enough to get methane emissions down.” The same can be said regarding ethane. Conclusion We’re still scratching our heads as to why the researchers are blaming ethane emissions detected in Europe on the Bakken. But most importantly, they have (inadvertently) confirmed that methane emissions are very low in the nation’s most prolific oilfield. They’ve also noted what has long been suspected: That scientists could very well be overestimating methane emissions from oil and gas based on the mere detection of ethane. http://everythingshale.com/news/2016/may/03/new-noaa-study-finds-low-methane-emissions-attempts-to-mask-data-with-ethane-focus/ http://everythingshale.com/news/2016/may/03/new-noaa-study-finds-low-methane-emissions-attempts-to-mask-data-with-ethane-focus/ Tue, 03 May 2016 14:55:25 http://everythingshale.com/news/2016/may/03/new-surety-bond-amounts-for-missouri-oil-and-gas-well-operators/ Image source: https://flic.kr/p/v1cjTM As of March 30th, oil and gas well operators in Missouri face new bonding requirements, and some changes to how their bond amount is calculated. The new legislation was passed in February, to ensure that the state of Missouri, and its citizens, are properly protected in case of unlawful practices by oil and gas well operators. Like all surety bonds , the bond for Missouri oil and gas well operators creates an extra layer of accountability for businesses. If the state of Missouri suffers damages from an oil or gas well operator, they can be compensated according to the bond terms. Well operators found to be in violation of the Missouri laws and statutes, particularly Chapter 259 of the Missouri Revised Statutes, that govern their business could face a bond claim, which can have grave consequences for their finances and reputation. New Bond Amounts Like before, all oil and gas well operators in Missouri must be licensed, and must also post a surety bond within 30 days of applying for their license. However, the new rules have changed the bonding amounts, with exact requirements varying based on well size. Here’s a quick guide to the new bond minimums for single well operators: 0-500 ft.: $1,100 501-1000 ft.: $2,200 1,001-2,000 ft.: $3,300 2,001-5,000 ft.: $4,400 5,001+ ft.: $5,500 plus $2/foot beyond 5,001 feet Blanket well operators can obtain one bond that covers multiple smaller wells. The exact amounts vary based on the size, and number, of wells: Up to 40 wells of 0-800 ft.: $22,000 Up to 10 wells of 801-1,500 ft.: $25,000 Image source: https://flic.kr/p/6HPouy Wells larger than 1,500 feet must be bonded individually. In this case, the bond minimums for each bonded well will follow the single-well requirements listed above. The full requirements are laid out in 10 CSR 50-2.020 , from the Missouri Code of State Regulations. Image source: https://flic.kr/p/a4u1Aw Who’s Affected? Notably, only new oil and gas well operators in Missouri, who are licensed after March 30 of this year, are subject to the new bond minimums. Current operators are still covered by their previous bonds, although if they decide to transfer their wells to a different operator, the new operator must get bonded according to the new guidelines. New oil and gas well operators must submit their surety bond– or bonds– to the state geologist’s office. The bond must remain in effect until the state geologist confirms a well has been plugged, and can’t be canceled unless the operator can prove to the state geologist’s office that the well was never drilled in the first place. Bond Cost Explained At first glance, the bonding amounts for Missouri oil and gas well operators might look high. However, this represents the bond’s amount of coverage, and not the actual cost to the operator. Bond costs, or premiums, are usually a small percentage of the total bond amount. Your premium will depend on your particular credit history and financial situation. This premium is paid to your surety company, who, in exchange, agrees to underwrite the bond and cover any claims. While the surety company agrees to pay out claims up to the total bond amount, the well operator is then required to fully repay the surety. This is why oil and gas well operators should do everything in their power to avoid claims. The initial cost of a surety bond might be very reasonable, but the cost of a bond claim could be more than your business can bear. If you have questions about the new bond amounts, or about any of the Missouri regulations on oil and gas well operators, you can contact the Missouri Department of Natural Resources, or the state’s geologist’s office. Are you a well operator in Missouri? What do you think of the new bond amounts? http://everythingshale.com/news/2016/may/03/new-surety-bond-amounts-for-missouri-oil-and-gas-well-operators/ http://everythingshale.com/news/2016/may/03/new-surety-bond-amounts-for-missouri-oil-and-gas-well-operators/ Tue, 03 May 2016 13:00:29 http://everythingshale.com/news/2016/may/03/amplifying-the-pro-infrastructure-message/ Interesting discussion at the Atlantic Council last week on an array of opportunities in front of the United States provided by the domestic energy revolution specifically, benefits to consumers , the environment and to U.S. trade from abundant, clean-burning natural gas, all of which depend on infrastructure support to go forward. Liquefied natural gas (LNG) cargoes shipped this year from Cheniere's new Sabine Pass facility in Louisiana give evidence of surging natural gas production and a global market for U.S. LNG. These exports help support domestic output, they help increase U.S. energy security and they provide supply options for friends abroad. Paula Gant, the U.S. Energy Department's principal deputy assistant secretary, Office of International Affairs: Before even the first of the seven cargoes left Sabine Pass the potential availability of U.S. LNG was already having a disruptive influence on the balance of power between producers and consumers. We expect that disruptive influence to continue, and that is good for our energy security and that of our trading partners and allies globally.†Even so, this wonderful domestic energy abundance and the global LNG market opportunities could be impacted by challenges facing infrastructure expansion here at home. America needs more energy infrastructure to move domestic supply to all areas of the country, for residential consumers, power generators and manufacturers. Yet, without stronger high-level backing, we could see these infrastructure needs delayed or rejected, as occurred last month with the proposed Constitution natural gas pipeline in New York . Americans overwhelmingly support more energy infrastructure , and there appears to be bipartisan consensus for it in Congress. But infrastructure projects are being targeted by a vocal minority even though increased domestic use of natural gas is the leading reason the United States is leading the world in reducing carbon emissions . A key going forward is gaining infrastructure support from the White House and the administration, said Marty Durbin, API's executive director for market development. Durbin:  I think the White House and the administration have got to play a stronger role in the messaging here. We're not looking for them to be cheerleaders for the industry or any particular pipeline project. But as we've heard from the Department of State, we've heard from DOE … they can very easily point to all the benefits we have from natural gas playing a larger role, not only from the exports side (but) from an economic standpoint, the geopolitics, reducing emissions. But if we don't have the infrastructure here in the U.S. to be able to feed all of that, that's really going to restrain our ability to do that.†Durbin said starting at the top, elected officials must play a strategic role to help counter misinformation about the regulation of and safety of energy infrastructure projects: This is one of those areas I think that the government, the administration, needs to be able to speak more clearly. … Yes, the states have a role, locals have a role as well. But I do think there's got to be a stronger voice here saying, these statements out there that say (natural gas) can't be produced safely there's no way of producing it safely all pipelines are bad, we're locking ourselves into something for generations to come (are incorrect). … There are more voices elected officials at all levels, the customers who are going to benefit from this, consumer groups, you name it, that can attest to the fact that all of this type of infrastructure is going to bring great benefits.†Gant said the administration supports infrastructure: I can say that the administration does very keenly understand the importance that infrastructure plays. … [I]t's very clear that the key reason we've been able to take this abundant supply and turn it into economic value is because of our pervasive infrastructure. Technology and innovation delivered the resource to us, but our pervasive infrastructure has allowed us to get it where we need it, to heat our homes and businesses, to run industry and to turn it into other products in our petrochemicals sector and to deliver it to facilities like Sabine Pass.†So, there's the conversation. The country's infrastructure needs are clear and so are the benefits, to consumers, businesses, the climate and America's allies around the world. Needed is pro-infrastructure leadership from policymakers at all levels. It begins with the White House, whose bully pulpit should be used to support strengthened and expanded energy infrastructure so the United States can more completely harness the benefits generated by its energy revolution. By Mark Green  Originally posted May 2, 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/may/03/amplifying-the-pro-infrastructure-message/ http://everythingshale.com/news/2016/may/03/amplifying-the-pro-infrastructure-message/ Tue, 03 May 2016 13:00:11 http://everythingshale.com/news/2016/may/03/eia-thanks-to-fracking-energy-security-increases-while-cost-of-living-falls/ This week, U.S. shale continued its record of providing benefits to Americans across the country. The latest data from the EIA states that since 2014 lower oil and natural gas prices have led to a reduction in household energy costs. Additionally, the EIA reported that our nation’s reliance on foreign oil dropped to levels not seen since the 1980s , further increasing U.S. energy security. Despite the chaotic price environment, shale continues to deliver tangible, measurable benefits to Americans. According to data from the EIA lower oil and gas prices from fracking have resulted in a $747.30 savings in the average American household per year. In 2015 alone, energy prices dropped over 40 percent thanks to fracking, and from June 2014, to February 2016, oil and natural gas prices dropped by 71 and 56 percent respectively. These low prices are passed directly to consumers who use the cheaper energy in their homes, cars, and work places. An energy and environment reporter described how benefits of lower energy costs are far reaching stating: “When the price of energy decreases, the cost of goods and services produced declines as well.  Any product that is transported to market via truck or car uses gasoline and virtually every service uses electricity. Thus, low energy prices effectively reduce the price of almost everything. ” In addition to lowering energy costs, fracking has also allowed the U.S.to lessen its reliance on foreign oil and gas imports. Thanks to the massive shale plays that dot the country, foreign natural gas imports have dropped to their lowest levels since 1986 . This means that our nation does not have to depend on other countries in order to meet our energy needs. We can now purchase most of our energy right here at home, keeping our dollars in the pockets of U.S. businesses. The less energy we import from outside nations, the more secure America’s energy future becomes. Fracking has transformed the energy landscape of America in the last five years, and it is clear that it has no plans of slowing down. Thanks to U.S. shale, Americans are witnessing a large drop in the cost of living, and watching the energy security of our nation grow stronger each day. http://everythingshale.com/news/2016/may/03/eia-thanks-to-fracking-energy-security-increases-while-cost-of-living-falls/ http://everythingshale.com/news/2016/may/03/eia-thanks-to-fracking-energy-security-increases-while-cost-of-living-falls/ Tue, 03 May 2016 12:59:09 http://everythingshale.com/news/2016/may/03/london-starts-to-see-the-shine-in-china-s-gold-plans/ There appeared to be a changing tide of acceptance rather than concern over the past fortnight, that Shanghai is becoming a bigger, and more influential, cog in the global gold machine. One senior bullion banker said that fear is no longer the rationale, as has been the case for many, regarding China becoming the dominant force in the global gold marketplace. A gold dealer was of the same inclination. He said that “someone” needs to step in and help rejuvenate London’s importance as a global gold hub, be it the London Metal Exchange of Shanghai Gold Exchange; or both. “I think it should be the best [London as a global hub for gold trade] and still could be, but time is running out fast,” he said. The SGE recently launched its yuan-denominated gold benchmark pricing mechanism, the “Shanghai Gold Benchmark Price”. It is traded basis physical gold ingots with minimum fineness of 999.9 and a standard weight of 1 kg. The SGE performs centralized clearing, settlement and delivery for all executed orders, according to the exchange’s website . London has been one of the world’s major gold trading hubs for hundreds of years, home to the global benchmark now known as the London Bullion Market Association Gold Price. The system was previously known as the “fix” and was settled over the telephone by participating banks. The new LBMA Gold Price is operated and administrated by IntercontinentalExchange, with the LBMA owning the intellectual property. China, China, China China is the world’s number one physical consumer of gold, and for now producer, as such a local pricing system has been on the cards for some time. The LME is owned by parent-company, the HKEx, who recently signed an MoU with the SGE. Still, senior London players seemed unfazed by the new system SGE system: “It might be used by the local market, but until China opens up its currency markets, it will have no impact on the international market, nor London,” said one broker. Ross Norman, CEO of gold brokerage Sharps Pixley noted, “this is of course very much early days and it will almost certainly evolve to give transparency…and with transparency you get authentication and confidence that the benchmark is a valid number.” London calling, for change London is currently undergoing a period of reformation, steered by industry body the LBMA, with talk of a possible move to an exchange system from the current over-the-counter model, although the move would follow a number of smaller steps, including trade reported data. Regarding the SGE price: “It’s another small step. On its own it is difficult to see why London should be afraid while the currency [yuan] is still not convertible,” Seamus Donoghue, CEO of tech firm Allocated Bullion Solutions, said via email. A gold fund manager said: “London should not be afraid of a Chinese benchmark whilst capital controls remain in place in China.” Still, there’s no denying that China is on the verge of change, and that could have a knock on effect to the London market as a global hub. However, many defended the City’s position, noting that it will always remain an important part of the world’s bullion business. Physical at a standstill Looking at the immediate, physical hubs including the world’s two largest players China and India, remained at a standstill May 3 as the dollar spot price traded around $1,300/oz. One senior bullion banker said of physical conditions, “[these are] very tough markets. [There’s] more physical selling than buying.” This was backed up by senior logistics sources, who said that the market was becoming crowded and business tougher and tougher. “We need things to pick-up, and sooner rather than later,” said one. A second said that, “it’s quiet. Everywhere.” A senior trader agreed, “[the continued slow down] in the physical business is going to be difficult going forward.” Looking at various physical premiums/discounts, they largely pointed towards a physical market on its knees. India was heard in a deep a discount as $13/oz [for 995. fine material] in Mumbai, with a range of $5-$13/oz reported country-wide. China was said to be in a modest premium of $1/oz [for 999. material], with Dubai in a discount of $3/oz and the rest of the world — Turkey, Singapore, Japan, Hong Kong etc. — all heard flat [against dollar spot], to a modest discount. “It’s very quiet, there’s really no activity at all,” said one banker in Mumbai. This was echoed across India; from brokers, jewelers, dealers to refiners. It begged the question of many, how important are the physical markets — and real fundamentals — to the gold price? The PGPI 995 was assessed at minus $5/oz May 3, from minus $3/oz May 2. The post London starts to see the shine in China’s gold plans appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/03/london-starts-to-see-the-shine-in-china-s-gold-plans/ http://everythingshale.com/news/2016/may/03/london-starts-to-see-the-shine-in-china-s-gold-plans/ Tue, 03 May 2016 11:12:04 http://everythingshale.com/news/2016/may/02/colorado-supreme-court-rules-local-fracking-bans-are-invalid-and-unenforceable/ The Colorado Supreme Court ruled this morning that the City of Longmont’s fracking ban and the City of Fort Collins’ five-year moratorium are “invalid and unenforceable.”   As Colorado Public Radio reports , the court put it simply to anti-fracking groups: “We are not persuaded.” Just after the news was announced, Food & Water Watch even admitted that it was a “ devastating blow ” to national activist groups who have descended on Colorado to push their extreme anti-energy agenda on local communities. The court’s ruling comes as good news for local communities that reap economic benefits from oil and gas development but have also been threatened with bankruptcy by activist groups whose efforts have a history of leaving communities on the hook for high legal bills. For instance, the Community Environmental Legal Defense Fund’s (CELDF) founder even told  Reuters  that bankrupting a community might be “exactly what is needed” in order to achieve fracking bans: “And if a town goes bankrupt trying to defend one of our ordinances, well, perhaps that’s exactly what is needed to trigger a national movement.” Colorado’s local communities have long been a target of national activist organizations seeking to drive oil and gas development out of the state. The Sierra Club, Earthworks and Food & Water Watch (F&WW) even joined the Longmont case as petitioners in support of local fracking bans. Yet true to form, and adhering to their earlier promise to continue their campaign “no matter what” the court decides, Washington D.C.-based F&WW took to social media with this message: “[I]t’s exactly why we need to pass the Coloradans Resisting Extreme Energy Development ballot measures this November.” In other words, anti-fracking activists won’t let things like the law or the facts get in the way of their ban-fracking ideology. But Coloradans – and clearly the courts – aren’t buying it. http://everythingshale.com/news/2016/may/02/colorado-supreme-court-rules-local-fracking-bans-are-invalid-and-unenforceable/ http://everythingshale.com/news/2016/may/02/colorado-supreme-court-rules-local-fracking-bans-are-invalid-and-unenforceable/ Mon, 02 May 2016 14:43:19 http://everythingshale.com/news/2016/may/02/video-fracking-and-methane-what-you-need-to-know/ The Environmental Protection Agency (EPA) is about to finalize regulations on the oil and gas industry to reduce methane emissions. EPA says it wants to regulate methane to mitigate climate change, since methane is a greenhouse gas. But as EID’s new video and infographic show, study after study has found that methane emissions from the entire natural gas system are already very low – well below the threshold at which scientists say natural gas may lose its greenhouse gas advantage. Further, a new study in the journal Science found that oil and gas production is not to blame for the global spike in emissions. Energy In Depth has done the math and it shows that EPA’s methane regulations will only achieve a reduction in global temperatures of 0.0047 degrees Celsius, or four one-thousandths of one degree, by the year 2100. Meanwhile, it’s thanks to fracking that the United States is the only country in the world to achieve dramatic reductions in greenhouse gas emissions. As the U.N. Intergovernmental Panel on Climate Change (IPCC) explained in its Fifth Assessment Report, “[T]he rapid deployment of hydraulic fracturing and horizontal-drilling technologies, which has increased and diversified the gas supply…is an important reason for a reduction of GHG emissions in the United States.” The Paris-based International Energy Agency (IEA) has said , “In the United States, emissions declined by 2% (in 2015), as a large switch…to natural gas use in electricity generation took place.” EPA even noted the large role natural gas plays in reducing emissions in its 2016 Greenhouse Gas Inventory: “Recently, a decrease in the carbon intensity of fuels consumed to generate electricity has occurred due to…increased natural gas consumption and other generation sources.” EPA’s new rules will have virtually no impact on global temperatures. But they will make it much more difficult to produce the fuel that has been responsible for dramatic reductions in greenhouse gas emissions. Watch EID’s new video – “ Fracking and Methane: What You Need to Know ” – to learn more. http://everythingshale.com/news/2016/may/02/video-fracking-and-methane-what-you-need-to-know/ http://everythingshale.com/news/2016/may/02/video-fracking-and-methane-what-you-need-to-know/ Mon, 02 May 2016 10:01:42 http://everythingshale.com/news/2016/may/02/will-higher-gasoline-prices-choke-off-strong-driving-demand/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices Gasoline demand in the United States four months into the year remains strong, running 6% above the five-year average although trailing the peak year in gasoline consumption achieved in 2007 by 0.7% when it averaged 9.286 million bpd. A lot has happened in the nine years since the consumption rate hit the high watermark, with weekly data from the Energy Information Administration showing gasoline demand in 2007 consistently holding above 9.0 million bpd. Based on that measure, we’ll likely not see the 2007 record broken this year, with EIA statistics detailing three full weeks in January in which implied gasoline demand slipped below the 9.0 million bpd threshold. It wasn’t immediately known that the United States slipped into what would become the worst recession since the 1930s during the final month of 2007 which would endure until June 2009, with the oil price bubble popping during the second half of 2008 after first spiking to record highs in July 2008. Job losses swelled, with the US unemployment rate peaking at 10.1% in October 2009, and gasoline demand averaging 8.997 million bpd that year. Gasoline demand in the United States is elastic, and the job losses not only meant fewer commuters on the nation’s roadways, but also robbed the consumer of his and her confidence in the economy triggering conservation. Employment and gasoline demand remain closely correlated in the United States. It would take six years before US gasoline demand would average more than 9.0 million bpd on an annual basis, with consumption in 2015 at 9.161 million bpd. Cumulatively through late April, preliminary data from the EIA shows gasoline supplied to the primary market running 365,000 bpd or 4.1% above the 2015 pace. The national unemployment rate ticked up 0.1% in March to 5.0% with the uptick caused by more people looking for work as opposed to layoffs. In March 2015, the jobless rate was at 5.5%. The US labor market has been a bright spot in an otherwise slow growth economy since the recession, with annualized growth up a meager and less-than-expected 0.5% during the first quarter, the Bureau of Economic Analysis reported on April 28, down from a 1.4% expansion for the fourth quarter 2015. “Information received since the Federal Open Market Committee met in March indicates that labor market conditions have improved further even as growth in economic activity appears to have slowed,” the central bank committee said in their news release on April 27 in concluding their two-day meeting discussing interest rates. The market will get a better idea on that measure Friday (5/6) when the Department of Labor releases their non-farm employment report for April, with Labor previously reporting first quarter job gains having averaged 209,000 per month. Low gasoline prices have been the other key component in spurring greater driving demand. Indeed, the US retail price average for all formulations of regular grade gasoline was 93cts or 28% lower in 2015 at $2.429 gallon than in 2014. At 9.161 million bpd, US gasoline consumption was up 240,000 bpd or 2.7% in 2015 from 2014, and at the strongest annual rate of demand since 2007. However, West Texas Intermediate crude futures on the New York Mercantile Exchange are approaching $50 bbl after trading as low as $26.05 bbl on Feb. 11, and NYMEX gasoline futures have rallied 27% during the first four months of 2016, climbing 5% during the final week of April. Moreover, chart formations suggest gasoline futures, known as Reformulated Blendstock for Oxygenate Blending or RBOB, have more upside, with the May contract expiring April 29 at $1.6044 gallon. Last reported at $2.162 gallon on April 25, EIA’s US retail regular grade gasoline price average is up 43.8cts or 25% from the 2016 low of $1.724 gallon plumbed on Feb. 15. The national average has more upside while consumers have less confidence in the economy. On April 29, the University of Michigan’s Index of Consumer Sentiment fell for the fourth consecutive month and to a seven-month low of 89.0 for April. Will climbing pump prices prompt dour consumers to cut back on driving and slow the growth rate in gasoline demand? This feature will be closely watched by industry followers, with expected strong gasoline consumption in the United States a key component in bringing an oversupplied market into better balance with demand. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market, click here . The post Will Higher Gasoline Prices Choke Off Strong Driving Demand? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/may/02/will-higher-gasoline-prices-choke-off-strong-driving-demand/ http://everythingshale.com/news/2016/may/02/will-higher-gasoline-prices-choke-off-strong-driving-demand/ Mon, 02 May 2016 09:49:29 http://everythingshale.com/news/2016/may/02/brexit-what-could-it-mean-for-the-north-sea-s-oil-fuel-for-thought/ In less than two months UK citizens will make one of their biggest political decisions in more than 40 years: whether to remain or leave the EU trading bloc they have been part of since 1973. While an exit from the EU could mark a major milestone for the UK economy — the government fears GDP could suffer by over 6% after 15 years — a leave vote is seen having a limited impact on the UK upstream sector. For a start, North Sea oil has been regulated by London since before the UK joined the EU. Offshore safety laws were tweaked by Brussels in the wake of the 2010 US Gulf of Mexico spill, but their scope is limited. In the short term at least, it is seen as unlikely that there would be any back-peddling on EU legislation which has already been implemented into domestic law. Existing rules, whether originating in Brussels or not, would not fall away on Brexit (British exit from the EU) and it is unlikely that they would simply be repealed. Further down the road the UK would be free set its own offshore rules, which could diverge with EU legislation. In upstream oil and gas, Brexit would not change the key fiscal regime for the North Sea. London already has sovereignty over corporation tax, licensing and other regulations would not be affected in the short term. There is also little sense of urgency over an exit vote in the industry. Any changes to the operating environment would be years down the line. Some predict it would take a decade or more for the UK to fully disengage from the EU. “Is Brexit at the forefront of people’s minds right now as they are doing (North Sea related) deals? No is the answer,” said Julian Nichol, a lawyer at Bracewell which advises energy companies on legal issues. “From a legal perceptive, there is going to be a minimum impact on existing contracts. Brexit per se is not likely to trigger defaults.” Most multi-national firms support the UK remaining in the EU and Big Oil is also in favor of the status quo. BP’s boss Bob Dudley has said Britain’s role would be “much diminished” if it exits while Shell’s CEO has signed a pro-EU letter saying leaving “would deter investment and threaten jobs.” Some have suggested that a UK decision to leave could trigger a new vote for Scottish independence, with Scots likely plump for alliance to Brussels rather than London. If Scotland decides to break ties with the UK to keep access to EU markets, uncertainties may resurface over the progress of reforms needed streamline offshore rules. Labor mobility concerns Operators could also be forced to comply with two sets of regulations, some suggest. Ahead of the Scotland’s vote to remain part of the UK in late 2014, industry group Oil & Gas UK flagged implications for the North Sea industry on costs and red tape should London and Edinburgh part ways. North Sea producers, it said, were also vexed over attracting skilled workers to the UK’s highly mobile offshore workforce should Scotland leave. Those same concerns are likely to hold sway for producers in the UK’s current choice over Europe. The UK would be quick to sidestep any labor supply hiccups, many believe, forging labor migration deals with EU members to replace the bloc’s core free movement of workers principle. One risk of a UK exit is currency depreciation. The pound could plummet in value, the theory goes, dragged down by uncertainties over the fate of the British economy. “If that were to happen, upstream operators may benefit from a lower cost base relative to the dollar denominated oil and gas prices,” energy research group Wood Mackenzie said. On the flip side, companies with US dollar debt will see their repayments rise if their revenue is in sterling and some will need to hedge against this effect, according to Bracewell. The answers to many of the questions over a Brexit depend on the nature of the UK’s post-EU relationship with Brussels and the level of participation in the EU’s single market. A withdrawal deal must be negotiated with the EU after two years or when such an agreement would come into force—which could take much longer. Non-EU members Norway and Switzerland both hold trade agreements with the EU. The Norwegian model would guarantee UK access to the single market, including free movement of workers. It would also mean the UK is bound by most EU legislation. “The devil is in the detail,” said Nichol. “Brexit will be whatever the trade deal is negotiated by ‘UK PLC’ and the European Commission, and that will take a very long time.” — Robert Perkins in London The post Brexit: What could it mean for the North Sea’s oil? — Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/02/brexit-what-could-it-mean-for-the-north-sea-s-oil-fuel-for-thought/ http://everythingshale.com/news/2016/may/02/brexit-what-could-it-mean-for-the-north-sea-s-oil-fuel-for-thought/ Mon, 02 May 2016 08:22:41 http://everythingshale.com/news/2016/may/02/regionality-returns-as-china-s-steel-exports-juggernaut-slows/ China’s steel export juggernaut has decelerated, with the country’s innumerable steelmakers focusing on local demand and lapping up domestic margins that have perhaps never been stronger. The result of this increased focus on internal demand has meant relief for steelmaking nations that, prior to 2014, were price makers globally and in their own regions. Turkey is becoming a regional bellwether once more for long products; Russia can set the tone again in the Baltic and Black Seas for flats and semi-finished products. Closer to China, Japan and South Korea’s exporting mills should be feeling more relaxed in regional export — and domestic sales — negotiations now. In the last couple of years, these export-oriented steel markets had become, if not passive observers, then certainly unwilling dependents to China’s export locomotive. In a market based on relationships and familiar connections, regional trade had been more naturally the norm, but this was thoroughly disrupted in the last two years. Since China’s domestic market started to surge —  a process that truly began post-Chinese New Year in March, conditions globally for other exporting nations have returned to pre-2014 norms, albeit with some scars. Regional gains Black Sea export prices for billet, slab and HRC — many of which originate in Russia — have increased by $113-167.50/mt from the end of February to April 22. In EMEA, Russia is most likely to benefit from China’s absence thanks to low production costs and considerable local raw material reserves. Turkey’s exports in Q1 rose 3.2% to 4.3 million mt; sales to North Africa surged 135%, reaching 878,000 mt. Meanwhile, sales to the EU jumped 42% to reach 748,000 mt. Erdemir Group, the only listed large steelmaker in Turkey, reported an 86% rise in exports of flat-rolled steel in Q1, with EU-bound sales quadrupling on year to 127,000 mt. These markets had become export areas China penetrated in the last two years. Italy, for example, imported over one million mt of hot-rolled coil from China last year, 202% more than in 2014. Italy, Spain and Belgium alone accounted for 12% of China’s plate exports. The most surprising fact from last year’s trade activity was that only two from the top-five importers of China-origin steel are South-East and East Asian nations. Compare this to three years ago, when ASEAN nations accounted for the bulk of China export activity and the transformation is staggering. All of this made a mockery of a long-held belief that, even though China produces more than half the world’s production, Chinese producers make steel for their home market. One seasoned trader (who I won’t name, because hindsight is 20/20 after all), vehemently affirmed at a conference a couple of years ago that, “China’s steelmakers have no interest in exporting steel.” But, perhaps on analyzing that statement there is a certain sense to it. Taking Wuhan Steel as an example — a 15-plus million mt producer in China, the company recently announced profits of Yuan 30.3 million ($4.7 million) in Q1, having lost Yuan 7.6 billion in 2015. This pattern of a Q1 return to profits is visible across many of China’s largest steelmakers. It could be taken then that when China’s mills export in excess of 100 million mt/year, this does not translate as a healthy steel market. But for how long? The question is: how long is this process likely to last? The answer could well be: not long. China’s current surge in local steel pricing has been spurred, many believe, by a refreshed credit binge — hitting the boost button for consumption, and creating an environment for eye-watering steelmaking margins. Margins of Yuan 600-800/mt in China are pretty much unheard of, and have unsurprisingly prompted a surge in output. China’s producer’s association is warning of over-heating. For the latest available figures, output increased 3.4% in the first decade of April compared to the last of March. More revealingly, non-CISA mills also ramped up output considerably more. So far this swell in production has not troubled stock levels in China, which have actually decreased, but the market is jittery: two large drops (of more than Yuan 100/mt) in the much-observed Tangshan billet price in the last few days jolted markets. Indeed, Q1 steel exports from China actually increased, despite improving domestic sentiment through the quarter. On an annualized basis, Q1 exports were over 100 million mt. This was especially remarkable given the encroachment of anti-dumping duties on international trade, and goes some way to confirming Macquarie’s assertion that Chinese exports are likely to be above the 100 million mt mark until 2020. The post Regionality returns as China’s steel exports juggernaut slows appeared first on The Barrel Blog . http://everythingshale.com/news/2016/may/02/regionality-returns-as-china-s-steel-exports-juggernaut-slows/ http://everythingshale.com/news/2016/may/02/regionality-returns-as-china-s-steel-exports-juggernaut-slows/ Mon, 02 May 2016 00:45:16 http://everythingshale.com/news/2016/april/29/uranium-industry-focuses-on-costs-as-supply-glut-continues/ Uranium miners and traders are suffering from oversupply, low prices, lack of liquidity and low demand from utilities, and have little to no expectation of improving market conditions in the short- to medium-term, uranium market participants said during the World Nuclear Fuel Cycle conference.  The conference was in Abu Dhabi early April. Since December 31, uranium prices have dropped by close to 20%, reaching a low of $25.50/lb April 15, the lowest daily spot price reported by the company since 2005, according to TradeTech data. Nick Carter, executive vice president, uranium with price reporting company Ux Consulting, said in a conference presentation that the spot uranium price could stay in the low $30s/lb “for quite some time” because of an excess near-term supply of about 25 million to 30 million lb U3O8 from 2016 to 2019. Carter does not see a supply deficit in the market until “the late 2020s” due to the current supply glut. Further complicating the supply picture, uranium enrichment companies are using their extra enrichment capacity to bring an estimated 15 million lb U3O8 equivalent to the market annually by driving down their operational tails assay, according to Ruthanne Neely, UxC senior vice president of enrichment and general counsel. When enrichers are in overcapacity, they can “underfeed” — that is, use less uranium for the same resulting enriched uranium product — and sell the excess uranium back into the market. Neely estimated that there is “over 60 million SWU in excess inventories” in the form of EUP that can be sold on the market. There is so much EUP material that finding storage space is difficult, she said. Given current requirements, she said the inventory would only be drawn down by 2028. “It’s going to be around for a while,” Neely said. On the sidelines of the conference, where spot and term uranium transactions are often negotiated, the mood of uranium producers and traders was pessimistic. “There is no demand anywhere. Even in China. There is just too much material,” said one uranium trader. “Everyone is just trying to survive,” he said. The trader said that Cameco’s trading arm, Nukem, had been forced to lay off 15 of its 70-member staff. ‘Absolutely no liquidity’ One uranium producer said that there was “absolutely no liquidity in the market.” The low prices, below $30/lb, have meant that producers are refusing to conclude term contracts and prefer to wait for an upturn. However, it is not clear when market conditions will improve. “I don’t see anything that could change market dynamics in the short to medium-term,” the uranium trader said. He said he thought prices could fall lower than $27/lb and force mine closures, with African mines potential candidates for closure. Since the conference, Cameco said it would reduce its annual uranium production in 2016 by more than four million lb U3O8, suspending production at its Rabbit Lake facility in Saskatchewan, Canada, and scaling back production at two of its US facilities. A third uranium producer said the problem in the uranium industry is that some producers invest “without any economic rationale,” such as China General Nuclear Power Corp.’s Husab mine in Namibia that will be commissioned this year. He said he estimated that mine’s operating costs at between $70/lb-$80/lb. However, other market participants said they believed the lack of term contracting activity between utilities and producers would have repercussions, ultimately, on supply availability in the medium term. “Utilities will have a lot of uncovered demand in the next few years” that they are going to have to satisfy because no contracts are being signed at current prices, one of the participants said. Cost reduction continues But the focus of the industry is clear at the moment: reduce costs. The cost to produce uranium dropped by an average of $2/lb from the 2014 level to $39/lb in 2015 with the reduction being driven by low diesel prices as well as currency depreciation relative to the US dollar, according to Carter. Still, Carter said that more than half of total available uranium capacity has costs above $30/lb. And the first uranium producer said some uranium mines had already reached their limit in terms of cost reduction. The post Uranium industry focuses on costs as supply glut continues appeared first on The Barrel Blog . http://everythingshale.com/news/2016/april/29/uranium-industry-focuses-on-costs-as-supply-glut-continues/ http://everythingshale.com/news/2016/april/29/uranium-industry-focuses-on-costs-as-supply-glut-continues/ Fri, 29 April 2016 15:09:22 http://everythingshale.com/news/2016/april/29/science-advisors-affirm-epa-finding-of-no-widespread-systemic-impacts-from-fracking/ After months of deliberation, the Hydraulic Fracturing Panel of the Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) released its “ Review of the EPA’s draft Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources ” this week, quietly posting it to the website . Anti-fracking activists hoping for a damning review of EPA’s draft fracking report will be very disappointed: it does not ask EPA to modify or eliminate its topline finding of “no widespread, systemic impacts.” Here’s what you need to know: Fact #1: SAB affirms EPA’s topline finding of “no widespread, systemic impacts” to groundwater resources The recommendations state, “Of particular concern in this regard is the high-level conclusion statement on page ES-6 that ‘We did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States.’ Most members of the SAB Panel find that this statement does not clearly describe the system(s) of interest (e.g., groundwater, surface water), the scale of impacts (i.e., local or regional), nor the definitions of ‘systemic’ and ‘widespread’. The SAB observes that the statement has been interpreted by readers and members of the public in many different ways. Most members of the SAB Panel conclude that the statement requires clarification and additional explanation (e.g., discuss what is meant by “any observed change” in the definition of “impact” in Appendix J, and consider including modifying adjectives before the words “widespread, systemic impact” in the statement on page ES-6). Four of the 30 members of the Panel have concluded that this statement is clear, concise and accurate.” (emphasis added) The important point here is that while the SAB panel makes some suggestions to EPA, it is not asking the agency to change the phrase “no widespread, systemic impacts” – it is asking EPA to include modifying adjectives before the words “no widespread, systemic impacts.” In other words, EPA’s topline finding stands; the SAB panel is just asking EPA to provide further details. The final recommendations are likely a reflection of comments made by panel member Dr. Abby Li at one of the teleconferences to discuss these recommendations. Dr. Li expressed concern that the media and the public may misinterpret the SAB’s draft recommendations as they were then written, as stating that EPA’s topline finding is unsubstantiated, which was not what the SAB is actually saying. By clarifying that the phrase “no widespread, systemic impact” stands, SAB is making that distinction. Fact #2: Four SAB panel members say EPA’s topline finding is “accurate, unambiguous” As EID has noted before , the SAB recommendations include a dissenting opinion authored by panel member Walt Hufford, who is joined by three other panel colleagues: Dr. Stephen W. Almond, Dr. Shari Dunn-Norman, and John V. Fontana. The dissenting opinion clearly states, “The statement by the EPA in the draft Assessment Report issued in June, 2015 is clear, unambiguous, concise, and does not need to be changed or modified. The statement provides a “holistic” conclusion of the life cycle process of water used by the industry. While the report could have articulated the agency’s statistical assessment more clearly, there has not been any facts or evidence demonstrating a systemic or widespread impact to existing drinking water resources or other water resources that may not meet the current criteria of a drinking water resource. If a systemic or widespread issue had been identified, the EPA and the state regulatory agencies would have quickly responded to such findings. In the absence of such documented events, the conclusion is clear that no systemic, widespread impact to drinking water resources is occurring. To suggest otherwise, undercuts the work and dedication by the employees of those federal and state agencies who are charged with environmental protection. The draft EPA report estimates approximately 30,000 wells are drilled each year in the Unites States. Only a very small percentage of those wells have had an operational issue that may have impacted drinking water resources. Even among this small percentage, the identified impacts to drinking water resources have primarily been associated with surface spills, well construction, and well cementing – not hydraulic fracturing. The SAB panel is correct in highlighting that localized impacts should not be discounted nor marginalized. Moreover, the SAB correctly identified that an aspect of the draft Assessment Report dealing with the actual “impact” of a spill requires further clarification. A casual reader of the draft report is left to question if impacts from all spills or releases are permanent or temporary. The agency should expand the discussion around the actual timing of “impacts” to the local environment. In many cases, including the ones referenced within the report, it is clear there is no long term demonstrated impact associated with a release. The major conclusion by EPA in their June 2015 draft Assessment Report stating “ no widespread, systemic impacts on drinking water resources in the Unites States” is accurate, unambiguous, and supportable with the facts EPA has reviewed .” During one of the teleconferences to discuss the recommendations, several members of the SAB voiced their support for the dissenting opinion and for EPA’s topline finding. As Dr. Shari Dunn-Norman explained, “I’ve been giving this a lot of thought […] of Walt’s opinion  and I would like to support his opinion completely .  Looking up the definitions in Webster of “widespread” it means over a large area or a large number of people. And I don’t think the actual data that’s in this report shows any large widespread effects […] The word systemic means of a whole system and I don’t think we saw any real data of the whole hydraulic fracturing water system that really supports a systematic failure.  So I feel that Walt is correct and I actually feel like the conclusion of the first report is correct .”  (emphasis added) Dr. Dunn-Norman later explained how her experience led to this opinion: “I just wanted to point out, like a number of committee members here I’ve had a large number of years-experience in the industry and my opinions are formed by my experience.   And in my experience we did massive hydraulic fracturing back in the 1970s and 1980s and we just didn’t see major problems.  And if there were really some very big issues with this, we would probably have seen them by now .” (emphasis added) Dr. Stephen W. Almond agreed noting, “I want to just join in with Shari. I don’t want to sound like we’re singing kumbaya  but I’ve fractured all over the world been on literally thousands of frack jobs and I have to agree that I don’t see any widespread risk of any of the areas  […]I’d just have to agree with that number one statement that Shari gave just from experience fracturing all over the world and not to say there’s not some cases that may need to be investigated like Dimock and Pavillion, etc.,  but overall I don’t see a widespread systemic issue here .” Fact #3: Several other SAB members expressed support for the dissenting opinion even though they didn’t officially join During one of the teleconferences , Dr. Stephen Randtke and Dean Malouta said that they were considering joining the dissenting opinion. Although neither ended up doing so, Randtke said during the teleconference that he agrees with EPA’s topline finding as it stands in the draft groundwater report: “As I said back in October when you read this entire three paragraph introduction on page ES-6 on the major findings  I have really no trouble with it. And so I’m sympathetic to Walt’s statement  […] I disagree with the statement that we find that it does not clearly describe the system of interest or the definitions of systemic and widespread. Right up in the lines 11 through 16 we’re talking about above and below ground. It is talking about the systems of interest and the context and the entire HFWC in relation to hydraulic fracturing.  And then all these qualifiers we want to write in the next paragraph below that statement 22-27 they say could reflect that there’s rare impacts or there’s some uncertainty here and they’ve laid all that out.   So you know, I agree with kind of the whole statement as EPA has stated it. I think it’s a very good one .”  (emphasis added) Fact #4: SAB’s recommendations and the dissenting opinion come to pretty much the same conclusion: EPA’s topline finding is sound SAB’s final recommendations ask EPA to include modifying adjectives before the words “widespread, systemic impacts” while the dissenting opinion states that the phrase “no widespread, systemic impacts” is “accurate, unambiguous” but that the agency “could have articulated the agency’s statistical assessment more clearly.” At the end of the day, they’re essentially saying the same thing: EPA’s topline finding could be more detailed but it is absolutely sound. If there were any evidence to suggest widespread, systemic impacts to drinking water from hydraulic fracturing, the SAB would certainly be able to cite it in its recommendations. Without that evidence, SAB has produced a document that affirms EPA’s conclusion. http://everythingshale.com/news/2016/april/29/science-advisors-affirm-epa-finding-of-no-widespread-systemic-impacts-from-fracking/ http://everythingshale.com/news/2016/april/29/science-advisors-affirm-epa-finding-of-no-widespread-systemic-impacts-from-fracking/ Fri, 29 April 2016 12:59:34 http://everythingshale.com/news/2016/april/29/anti-fracking-activists-prioritize-stopping-authorized-temporary-emissions-over-worker-safety/ A  recent report  by the anti-fracking Environment Texas (ET) and the Environmental Integrity Project (EIP) claims to have found abnormally high emissions from certain industrial sites associated with oil and natural gas activities. Specifically, the report looked at air emissions during routine maintenance (often performed to keep operations safe) and malfunctions, based on state documents. By listing off various chemicals and numbers, downplaying the strictness of current regulations, and prioritizing emissions over safety, ET and EIP attempt to portray these events as intentionally malicious as opposed to regulated, permitted, and often unavoidable due to safety issues. Prioritizing Temporary Air Emissions over Safety According to the report, operators in Texas must obtain permits for planned maintenance activities, which include a timeframe of when maintenance will occur and estimates of emissions that will take place during that time. Maintenance often includes routine activities to confirm proper equipment functionality and ensure the safety of workers at these sites, such as venting excess gas to alleviate pressure. The authors argue that these maintenance emissions should be measured and capped, but that “lax” laws in Texas allow for operators to exceed these estimated emissions during maintenance, stating: “Unfortunately, the State of Texas allows for industrial sources to exceed permitted limits when plants undergo planned maintenance, often treating these routine activities as though they are unavoidable malfunctions.” Luke Metzger, director of Environment Texas wrote in EIP’s press release on the study: “By their own admission, polluters in Texas are routinely and egregiously violating the law and endangering public health with unauthorized emissions. And too often regulators look the other way when polluters break the law. This lawlessness must come to an end,”  Illegal? Hardly. As the Texas Commission on Environmental Quality’s (TCEQ) operation requirements for scheduled maintenance, startup, and shutdown activities states : “Unauthorized emissions or opacity events from a maintenance, startup, or shutdown activity that are not unplanned that have been reported or recorded in compliance with §101.211 of this title are subject to an affirmative defense to all claims in enforcement actions brought for these activities, other than claims for administrative technical orders and actions for injunctive relief, for which the owner or operator proves all of the criteria listed in subsection (c)(1) – (9) of this section for emissions, or subsection (e)(1) – (9) of this section for opacity events and the following…” [emphasis added] In other words, if operators act within the set requirements for reporting and scheduled maintenance, legal action is mitigated for unplanned emissions. The reason for this is simple: safety . If at every industrial site operators were unable to for example, release excess gas from equipment, because that would push emissions associated with the maintenance over the permitted limits, it would be a danger to the hard working men and women at these facilities and sites. This rule is not an intentional attempt to circumvent emissions standards, but instead a safeguard to ensure the health and welfare of workers. Even when referring to malfunctions the authors misrepresent the actions of operators as skirting emissions laws as opposed to ensuring safety. For example, the authors mention an emissions event at the Keystone Gas Plant in August of last year, where excess sulfur dioxide was released due to an attempt “burn out the blockage” when pollution control equipment fail. In other words, the authors are condemning the company for responding in a way that would ensure safety (a blockage poses a number of hazards) as well as mitigate future pollution by making sure the equipment could function properly. Such criticism is narrow sighted and hypocritical when earlier in the study the authors list the ways a malfunction can occur: “While some malfunctions may be truly unavoidable, many breakdowns are the result of operator errors, poor plant design, and a lack of preventative maintenance.” Sounds like EIP and ET would rather vilify the oil and natural gas industry than provide logical solutions or show concern for worker safety. History of Misrepresentation Both of these groups have a history of distorting data to deliberately mislead the public on emissions and environmental impacts. For example, in a 2014 report EIP claimed the oil and natural gas industry was ignoring regulations and using diesel fuel in fracking operations across the country. Looking further into their data however, EID discovered that EIP grouped the use of kerosene (at the time, legal to use under the Safe Drinking Water Act) with diesel. By coupling the two substances together under the broad term of “diesel”, EIP tried to argue that the use of diesel was common in fracking – something that is simply not true. In fact, 273 of the 280 instances of “diesel” being used for fracking listed in the report were not using diesel at all, but kerosene. In other words, EIP deliberately misrepresented information in order to portray the oil and natural gas industry as intentionally skirting the law. Environment Texas too, recently was found to be misrepresenting data . In a report claiming oil and natural gas development on lands owned by University of Texas (UT) is harming the environment, ET inflated numbers and gave no context to the data in an attempt to incite concern. For example, the report pointed to the use of 6 billion gallons of water used from in energy development on UT land between 2012 and 2014 as an example of environmental harm. However, looking just a little deeper, EID found that Texas used 15.8 trillion gallons of water in 2012, 2013, and 2014 combined. This means the six billion gallons of water used in energy development, while significant sounding out of context, was actually 0.03 percent of water used in Texas during that period. Further, the ET report on UT lands claimed spills during energy development are a major point of concern, citing that “at least 1.6 million gallons of pollutants” have spilled since 2008. Again, while out of context this sounds significant, as the CEO of UT’s university lands told the Austin American-Statesmen, that’s about the same as one can of coke per acre per year . Conclusion The authors want to limit regulated maintenance to mitigate emissions, possibly putting working safety in jeopardy. There’s no doubt air quality is a priority, but to claim that companies in the oil and natural gas industry are intentionally acting to bypass emissions regulations is to ignore long-standing safety measures – and the facts. http://everythingshale.com/news/2016/april/29/anti-fracking-activists-prioritize-stopping-authorized-temporary-emissions-over-worker-safety/ http://everythingshale.com/news/2016/april/29/anti-fracking-activists-prioritize-stopping-authorized-temporary-emissions-over-worker-safety/ Fri, 29 April 2016 10:30:55 http://everythingshale.com/news/2016/april/29/new-study-fails-to-link-drilling-and-water-contamination-in-west-texas/ This week, researchers at University of Texas – Arlington (UTA) released a new study that suggests drilling may be impacting water quality in West Texas’ Cline Shale region. But the data in the study tell a much different story. Moreover, issues with the study’s methodology and lack of baseline data cast additional doubt on the legitimacy of the research team’s claims. ‘Sporadic’ Results The researchers tested for a range of chemicals and substances in a handful of the region’s water wells – everything from pH level and total dissolved solids to alcohols and heavy metals. Taking multiple samples from 36 to 42 wells during each of the four phases, the researchers then compared the levels of constituents against health guidelines, such as Maximum Contaminant Limits (MCL) and health advisory levels (HAL). By testing these constituent levels over time, the researchers hoped to show the levels correlated with an increase in oil and natural gas activities. What they found however, was wild swings in chemical levels across the four phases. For example, the percentage of samples that were equal to or above MCL for arsenic declined as the sampling progressed , but total dissolved solid increased. Additionally, for pH, only Phase 2 showed any wells that exceeded the MCL . Iron levels also fell from Phase 1 to 2 and from Phase 2 to 3, but then increased from Phase 3 to 4. If a connection between drilling activity and water contamination existed, the results would show a general increase in substances over time – not wildly divergent trends, as the data in the UTA study show. The researchers did acknowledge that these substances, based on the results, could dissipate over time, which is another example of how groundwater testing is complex and often times quite difficult. Nonetheless, such large fluctuations in constituent levels would be unlikely if drilling were playing a significant role in water quality issues. The researchers partially conceded this point, writing that their data “do not provide a definitive link” between drilling and contamination. They also concluded that if any contamination were occurring, it would be “sporadic” and not “widespread.” As the authors note: “ The ephemeral detections of dichloromethane and various organic molecules with minimal co-variation suggest that contamination events may be variable and sporadic ( as opposed to systematic ), but also that many of the toxic compounds associated with areas of high UD activity may degrade naturally over relatively short time scales.” (p. 912; emphasis added) This finding sounds very similar to the conclusion reached by the U.S. Environmental Protection Agency (EPA) in the agency’s five year study on fracking , which found: “We did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States.” Lack of Baseline Data According to the researchers, the purpose of the study was to analyze the “temporal variation,” or change over time, of water quality in the Cline Shale. Both the press release and the UTA Collaborative Laboratories for Environmental Analysis and Remediation (CLEAR) website state the water wells were sampled before, during and after unconventional drilling and fracking took place. According to the press release: “The new research…is the first to analyze groundwater quality in the Cline Shale region of West Texas before, during and after the expansion of hydraulic fracturing and horizontal drilling .” [emphasis added] And, as the CLEAR website states: “CLEAR is currently concluding an initial time course investigation on the potential impact of unconventional oil extraction on groundwater quality in the Cline [S]hale of [W]est Texas. Approximately 40 water wells were sampled prior to, during, and after the onset of unconventional drilling and hydraulic stimulation. ” [emphasis added] The problem is, they did not take baseline samples (i.e. prior to drilling), and they even admitted it in their paper. Indeed, there were existing unconventional oil and natural gas development (UD) wells within 5-10 km of their sampling area, with at least one UD well right next to several of the water wells sampled. The authors write: “ Phase 1 water wells were located an average of 5.65 km (range = 0.515-9.59 km) from the nearest UD well.” (p. 908) If it were a true baseline sampling, with data actually collected “before” or “prior to” drilling and fracking, no UD wells would be in the area. Contrary to their press release, the authors admit they did not have baseline samples : “ During Phase 1, there was a total of 298 UD wells in the three counties encompassing our study area; with one UD well within 5 km of our study area. We do not consider the first phase to be a true baseline measure of water quality before UD activities , but rather an initial assessment of water quality at the onset of increased UD activities.” (p. 908; emphasis added) Why is that so important? Because without baseline samples, the researchers can only assume that water quality was different before drilling. Given that aquifers across Texas often contain high levels of the same substances that these researchers found – even in areas without drilling – the lack of pre-drilling data is a huge information gap. Of course, that’s in addition to the questions it raises about the research team’s public outreach, which included materials distributed to the press that contradict what’s in the actual study! History of Issues with Study Methodology The same UTA researchers who contributed to this study also published a debunked report on the Barnett Shale in 2013 . Notably, that study also had serious methodological issues. Specifically, the 2013 Barnett study sampled only 91 private water wells within 3 miles of a gas well, with an additional nine wells sampled outside the Barnett Shale region for a control group. But this methodology prompted criticism from others in the field, such as Stanford’s Rob Jackson (then a researcher at Duke University), who said the research team’s control group was “too small to be statistically relevant,” according to EnergyWire ; and Penn State’s Terry Engelder, who critiqued the use of control wells from a completely different geological area. The Permian study only sampled 43 water wells, and had zero control wells. If using only nine wells was inadequate, then what does it say that the latest study had zero? Dr. Engelder, in reviewing the team’s latest study, told EnergyWire that the fluctuating measurements raised additional questions, and based on the information in the actual report, a number of causes could explain the findings: “The authors can’t say that UD [unconventional oil and gas development] had anything to do with the content of groundwater and they might as well have been positing that farmers in West Texas have been cleaning crank cases and radiators of tractors for about a century and dumping the stuff in their back yards less than, say, 100 meters of their water wells,” Engelder wrote in an email. “Note that most UD activity is more than 5 kilometers from the water samples. The authors also admit that ‘the majority of the chemicals used for UD activities are also used in numerous other industrial, agricultural, and residential activities.'” Continuing on their 2013 research, the same team released a study in 2015 , again examining the Barnett Shale. This time, while the researchers analyzed groundwater from a much larger sample size of 550 private and public wells, the study suffered from the same problem as the previous one: no baseline data taken prior to oil and natural gas development. Without baseline data to compare their results, the researchers conceded that they couldn’t identify the direct cause of contamination, as close proximity to the Dallas-Fort Worth metropolitan area leaves groundwater “potentially vulnerable” to contamination from various sources. In fact, the researchers had to admit that their findings couldn’t link fracking with contamination: “ The detection of numerous volatile organic compounds in aquifers above the Barnett shale does not necessarily implicate unconventional UOG extraction as the source of contamination ; however it does provide an impetus for further monitoring and analysis of groundwater quality in this region.” (p. 18; emphasis added) Conclusion While the press release strongly suggests the study links drilling activities and degraded groundwater, that’s simply not true. The data show large variations during each sampling phase – and even though the researchers admit their results are all over the map, such results mean a general statement linking drilling to contamination is far from accurate. Groundwater testing is a complex process, and deriving concrete results from a very limited set of samples is not just difficult; it’s arguably inappropriate. http://everythingshale.com/news/2016/april/29/new-study-fails-to-link-drilling-and-water-contamination-in-west-texas/ http://everythingshale.com/news/2016/april/29/new-study-fails-to-link-drilling-and-water-contamination-in-west-texas/ Fri, 29 April 2016 08:51:30 http://everythingshale.com/news/2016/april/28/china-s-ferrous-futures-market-gains-local-stardom/ Lately in China it’s been the Kentucky Derby, the Grand National and the Dubai World Cup all rolled into one. Except, it’s not stallions but sinter feed that has been the star turn—not well-reared horses but reinforcing bar the center of attention. Picture this: after a lunch with market sources in Shanghai, you and your colleague are discussing metals and coal, when you suddenly hear in the background someone else talking about rebar; not just rebar, but hikes in margin requirements to trade rebar futures in order to curb speculative trading activity. Am I hearing things? No, you strain your ears and realize it’s the local radio disc jockey. Talking about steel futures. It was an epiphany moment: you realize that the age of financialization in China’s commodity markets has already begun: futures contracts go mainstream. Or perhaps, rather than financialization, it is the retail-ification of commodities in China. Anyway, enough grammatical acrobatics. Analysis posted in a note by the Commonwealth Bank of Australia points out that the average time a futures contract is held on the main product venues in China (the Dalian Commodity Exchange for iron ore and the Shanghai Futures Exchange for rebar) is in and around the four hour mark. Compare this to around 60 hours for COMEX’s copper contract or around 70 hours for NYMEX natural gas, and it is clear that speculative positions are the norm for ferrous contracts listed in China. What is also noticeable is the minimal open interest to traded volume on the DCE contract, implying that hedging is minimal. SHFE and DCE have acted in response. DCE has moved its margin requirements up twice in a short space of time, reaching 8% on Monday, April 25. This, added to a change in exchange fees, has prompted a drop in liquidity—which topped 700 million mt on April 20. Some commentators pointed out that the financial churn on these contracts approached levels of trade seen on the S&P 500 in mid-April. Given that these China-based contracts largely have local participants and are really focused on domestic or import markets, these figures are quite phenomenal. Daily traded volume equaled around 20 times the global seaborne trade of iron ore on the DCE contract. This sort of paper-physical ratio is staggering for ferrous paper contracts. But what does it mean? Well, without open interest, perhaps not a great deal—at least not directly or immediately to international commodity trade. Open interest equaled about 1/7 of daily volumes traded on the contract in the third week of April. Indirectly, it may matter a lot. The exchanges, and by proxy the Chinese government, is aware of the dangers of having hugely volatile futures markets, which some claim have been on occasion more or less disconnected from underlying physical fundamentals. Risks to investors—both individual/retail and institutional—are clearly high, but so are the risks of misreading the data coming out of China on such a strategic local industry as steel. Who is to say that some of the surge in China’s steel prices—which prompted a global price recovery in the last two months—is not linked in part to sentiment of individual investors in China? Deprived of the stock markets to bet on, these ferrous futures markets have become a happy alternative for punters, and the effects are yet to be fully felt. –Ciaran Roe, ciaran.roe@platts.com –Edwin Yeo, edwin.yeo@platts.com The post China’s ferrous futures market gains local stardom appeared first on The Barrel Blog . http://everythingshale.com/news/2016/april/28/china-s-ferrous-futures-market-gains-local-stardom/ http://everythingshale.com/news/2016/april/28/china-s-ferrous-futures-market-gains-local-stardom/ Thu, 28 April 2016 19:01:17 http://everythingshale.com/news/2016/april/28/duc-hunting-drilled-and-uncompleted-wells/ A big conversation piece around the oil and gas round tables is the large and vast inventory of drilled and uncompleted wells . Controversy is not far behind this table talk as nearly all states or leasing agreements have requirements on when new wells have to be brought online after initial spud. In basins where economics are not favorable such as North Dakota the state has issued allowances of an extra year to defer the completion of these DUCs. There has been some talk of whether a DUC is considered a PUD or PDNP, and if it is PDNP how to discount the value to determine how much to lend against those assets. Landowners are also at a loss in some cases as money they thought they would be receiving after their division order came in has been put on hold indefinitely. Some operators will have to make the choice to complete the well and lose reserves or face a potential lawsuit from landowners and the state for not completing wells within the specified time. In a previous life I used these DUCs in a search and destroy style mission; find operators with large capital expenditures requirements brought on by these DUCs but low budgets or high debt. These DUCs represented their prior success, when pricing was favorable, which was used against them to secure working interest (WI) and a foothold in future projects. Sifting through the immense data files and access databases to create these profiles was time-consuming and could lead to lackluster results if the database was not kept current. Advising companies on similar strategies now, using DrillingInfo’s Rigs Analytic platform makes this task and many others fast an easy, let’s dive in. DUC’s and wells that have been shut-in for at least 6 months allow capital providers or analysts to determine where a company stands on future drilling. If you look at a company’s 10’k report and determine that they are only going to bring online 20 wells in 2016 in the Bakken but have 18 DUCs that will hit their 2-year expiration limit in the same year it can be concluded that they will only be drilling 2 wells during 2016. Since we are able to determine the location of these DUCs we can also know their approximate production based on offsets allowing us to make a depiction of what the production should be from these new wells. We can also determine which month different wells have to be completed to comply with that states rules. On the other hand, if we are looking at an investor presentation and know that a company has more DUCs in inventory than their CAPEX allows for, time to go hunting. Using this data along with Drillinginfo’s leasing analytics we can determine if surrounding acreage is expiring or who is the lessor which allows us to begin to make a pitch of funding both wells and leasing activity. This is significant because the difference with these DUCs is that half of their expected costs are already sunk; we are able to get in at a lower price point than if the wells were newly drilled as a company has to make a decision to take the capital or deal with a potential lawsuit from the state or landowners by not completing the well within the approved 2 year window. This is just one example of how the industry can use the data available to make decisions. There is a lot more to an investment decision that provided in this article but the ability to make these types of pitches to investors and companies will help a new wave of funding for companies with not enough capital to move forward. It can help jumpstart or keep alive certain entities that are all but dead and allow for companies to hold on to non-core assets that are valuable at a higher price environment. For those with the capital to spend, happy hunting. http://everythingshale.com/news/2016/april/28/duc-hunting-drilled-and-uncompleted-wells/ http://everythingshale.com/news/2016/april/28/duc-hunting-drilled-and-uncompleted-wells/ Thu, 28 April 2016 13:00:49 http://everythingshale.com/news/2016/april/27/barreling-down-the-highway-to-hell-straight-to-steel-city/ Republican presidential candidate Donald Trump may be more likely to become the Prince of Promises than the President of the United States. But in the run-up to Tuesday’s Pennsylvania’s primary election he said something in the southwestern corner of the state that caught our attention. “Steel, we’re bringing it back,” he told Pittsburghers. If he meant he was bringing the steel industry back to America, someone should tell him that the U-S-A is the fourth largest producer in the world, with output of nearly 80 million metric tons in 2015. Trump probably meant he would bring steel back to Pittsburgh, the Steel City, home of the Steelers and Iron City Beer. He said he’s going to bring coal back to the region too. Since steel and coal never really left the area we can assume he means Big Steel and King Coal. Not likely, say the experts, although who would ever accuse Trump of pandering? Many native and lifelong residents of Pittsburgh, whose immigrant forebears came to the area to mine coal, make coke and work in the mills, were part of the cheering Trump campaign crowd, but even they have conceded that the area’s steelmaking prowess imploded more than 30 years ago and will never return. Pittsburgh now gets props as rust belt royalty — the Renaissance City, The Paris of the Appalachians. Perennially touted as one of America’s most livable cities, it is now getting global attention as a vacation destination for its natural beauty, its museums, sports teams, great vistas and friendly people. The former Smoky City (aka “Hell with the lid off”) once made more than half of America’s steel but now makes about 5%. It is becoming better known as a hub for healthcare innovations, education, computer technology, robotics and even its night life. In December, Zagat named Pittsburgh the No. 1 food city in America for 2015 and said it was “poised for even more exciting things in 2016.” How or why would Trump make steel huuuuuge again in Pittsburgh?  He’s going to need steel for that wall along our border with Mexico — lots of it — so that must be it. He’s on the record saying the 2,000-mile wall would be concrete reinforced with steel rebar. That would require hundreds of thousands of tons of rebar, but that is not enough to make Pittsburgh a steel powerhouse again. If Trump is serious about returning the city to its former glory, he has to think bigger. A modest proposal: Make the wall entirely out of steel plate, three inches thick, just to be extra safe, and 20 feet high. For some reason, there’s not much discussion about the need for a wall across our northern border. We’ll build one there too. And underneath these walls we can drive steel piling 10 feet deep to keep people from tunneling in. And what about the coasts?  Steel walls and piling along our shores could keep out boat people while at the same time protecting the Homeland from rising ocean tides. Now we’re talking Big Steel! And the profits? Construction steel costs about $600 a ton on average. Since Mexico is paying for it, let’s make that a cool $1,000. The post Barreling down the highway to hell, straight to Steel City appeared first on The Barrel Blog . http://everythingshale.com/news/2016/april/27/barreling-down-the-highway-to-hell-straight-to-steel-city/ http://everythingshale.com/news/2016/april/27/barreling-down-the-highway-to-hell-straight-to-steel-city/ Wed, 27 April 2016 09:48:51 http://everythingshale.com/news/2016/april/26/understanding-ep-company-presentations-part-1-pv10/ Things are (maybe) looking up in the oil patch. We’ve got the IEA and Harold Hamm both predicting $60 oil by the end of the year; the “plunge” allegedly brought on by the deferral at Doha actually turned out to be more whimper than bang; and the storage at Cushing may get some breathing room soon. So maybe, just maybe, we have hit the bottom, and if so, well it’s time to buy, right? During the downturn, we have encountered quite a few bankruptcies, some M&A, a whole lot of debt restructuring, some cost-trimming in both services and G&A, and other financial and operational measures by E&P companies. Those that are still alive have a few promising assets up their sleeves. Since many E&P companies are publicly traded, one of the best sources of information is via the companies’ investor presentations . In most cases you can find the most recent presentation (as a pdf or powerpoint) on the companies’ web site under “investor relations” or something similar. For example on Matador Resources web page, there is an “investors” tab on the top nav, and the final option on the drop down is “presentations and webcasts” Since many of the terms within these presentations are necessarily arcane financio-wizard speak, I thought I would do a series of posts to help shed some light on a few of the important concepts. PV10 According to Investopedia, PV10 is the present value of estimated future oil and gas revenues, net of estimated direct expenses, discounted at an annual discount rate of 10%. This nomenclature is most commonly used in the energy industry, and is used to estimate the present value of a company’s proved oil and gas reserves. Proved Reserves is a measurement of how much hydrocarbons can be recovered from the companies’ acreage with a reasonable amount of certainty. Typically this calculation is done on a per-well location basis and then added together. So PV10 is a way to value the hydrocarbons that you control that are still in the field, based on the amount of reserves in place less the costs and expenses to develop those reserves (other company overhead is not figured into the PV10). A strong PV10 is an indication that the company has assets that are (reasonably) accessible over the near term, which will generate future cash flow, and which will keep both the investors and the company in good stead. The discount is in place to account for the fact that a dollar tomorrow will be worth less than a dollar today. Let’s take a look at a few examples of PV10 out in the wild. Image Source:   Company OGIS 2016 Presentation On slide 5 of Matador’s current investor presentation (pretty early in the deck, so they think feel this is an important concept to communicate about the state of their business) we see this fabulous visualization of their company PV10 for the past three years. It’s very neat because (among other things) The pie charts are sized relative to the specified value of their PV10 for those years The pie wedges show the relative values of their major play areas – 2013 and 2014 were heavily weighted towards EF reserves, while in the 2015 market the Delaware basin is providing more of the future return. The assumptions for both amount of reserves in place, and estimated dollar value of those reserves are called out. We see that their gas to liquids mix is getting much stronger towards oil (35% oil in 2014 up to 54% oil in 2015) Although we see the value of the PV10 is much reduced (because the price of oil and gas is down), we see that the reserves are going up up up Image Source:   Company OGIS 2016 Presentation This slide from Carrizo’s current deck is in the middle of a few slides that focus on their Eagle Ford operations and assets. The height of the green bars represent the percentage of Carrizo’s EF operations that are within the x-axis specified project location – so North LaSalle and Irvin represent over a third of their potential drilling locations The red dot shows where their PV10 for those drilling locations breaks even vs. WTI price of oil The combination of these two projections together paints a fairly compelling picture of their position in the play As WTI improves those PV10 locations on the left look even more promising. Image Source:   Company OGIS 2016 Presentation Camber Energy, which is an M&A of a couple of operators – the Eagle Ford’s Lucas Energy and Oklahoma’s Segundo Resources – have actually named their new company after a quality of the decline curves of their liquids-rich Hunton acreage. Camber refers to the slightly arched shape of the decline curve you can see in the illustration above. Much like the previous Carrizo Slide, Camber is trying to make a point about the breakeven points, but relative to recovering drilling cost rather than straight over to WTI. With their Hunton Acreage that payback comes 10 months further into operation, but leaves 60% of the PV10 as future cashflow vs. 31% in the EF operation. So that’s pretty cool. Conclusion PV10 is an SEC initiative to standardize reporting on the value of proved reserves. As you can see companies use it in a variety of ways to highlight their strengths, so it doesn’t quite work as a straight line method to value a company. It does provide some very interesting insights, and is definitely a statistic to look at as you analyze company operations. http://everythingshale.com/news/2016/april/26/understanding-ep-company-presentations-part-1-pv10/ http://everythingshale.com/news/2016/april/26/understanding-ep-company-presentations-part-1-pv10/ Tue, 26 April 2016 13:00:39 http://everythingshale.com/news/2016/april/25/energy-commodities-are-the-bulls-starting-to-run/ Analyst, Darin Newsom, shared his quarterly outlook in a recent webinar.  Attached are the highlights from this presentation. Several factors have the energy and commodity markets looking more bullish, including a solid downtrend for the dollar with no interest rate hike in sight. But is long-term growth on the horizon? Crude Oil Fundamentally, the market remains bearish, with records continuing to be set in production volume and no hint of a dramatic slowdown. However, seasonally, the market looks to have a sideways to upward trend. This quarter should see the market extend its rally to near $47.00. A more bullish seasonal fundamental picture could eventually lead to a possible test of the next target near $60.00. Although there’s nothing to show that it will be a breakout market, we do know that money is coming back into crude oil. Entering the U.S. driving season with record gasoline demand should cause a seasonal decrease in U.S. stocks. And, copper looks like it may be at the very early stages of turning higher and could play some part in some support for crude oil as well. Distillates Seasonally, the market trends sideways. Fundamentally the market is growing less bearish. Despite a neutral seasonal pattern, the market looks like it could extend its young long-term uptrend toward the initial target of $1.44, particularly if futures spreads continue to trend up. Natural Gas As usual, natural gas is a more difficult market to read. Like the rest of the complex, its long-term monthly chart looks to have turned bullish, though continued noncommercial short covering will need to be seen. Fundamentals could continue to weigh on the market. Natural gas likes to turn quickly and turn wildly, although the market does not appear to be particularly strong as we move into late spring and early summer quarter. RBOB Gasoline Like the oil markets, RBOB gasoline trends sideways over the second quarter. The market moves into this quarter in a consolidation pattern on its long-term monthly chart. A bullish breakout based on seasonal increases in demand could lead to a test of the $1.75 mark. While there are certain indicators that definitely show a seasonal rise, the fundamentals for all of these different markets don’t suggest we’ll see significant long-term growth. For more information on how you can have daily access to our analyst’s insight, visit our website . The post Energy Commodities – Are The Bulls Starting To Run? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/april/25/energy-commodities-are-the-bulls-starting-to-run/ http://everythingshale.com/news/2016/april/25/energy-commodities-are-the-bulls-starting-to-run/ Mon, 25 April 2016 10:07:49 http://everythingshale.com/news/2016/april/25/opec-s-grip-might-loosen-but-it-still-has-pull-fuel-for-thought/ OPEC counts 13 countries among its membership, but one of them has long reigned as a first among equals. Saudi Arabia, with its production of around 10.2 million b/d representing about a third of the group’s output — and about 11% of world supply — has served as OPEC’s de facto leader, its swing capacity traditionally leading the organization’s efforts to manage the market. But last week’s failed talks in Doha to enact a production freeze saw a potential new oil producer group emerge with another player in the room that could have changed the dynamics of the market and challenged Saudi political eminence in world oil affairs. The Doha summit of 18 nations included 11 OPEC members and several major non-OPEC producers, most notably Russia, whose output surpasses Saudi Arabia’s at close to 11 million b/d, according to its energy ministry. Russia has geopolitical ambitions of its own that in many cases do not align with Saudi Arabia’s, particularly in the Middle East, where the two have clashed over the civil wars in Yemen and Syria. But Russia and Saudi Arabia were among the leading architects of the freeze proposal, before Saudi Arabia reversed course as the Doha talks took place. Had the talks been successful and a production freeze implemented, would Russia have found itself with an influential international perch in a new oil producer group that supplants OPEC’s role in overseeing the market? The question is moot for now, as it was Saudi Arabia flexing its political muscle at the meeting, scuttling negotiations over its insistence that Iran be a party to any production freeze agreement and demonstrating that the market still is beholden to Saudi wishes. But the failure of the talks, coming on the back of a fractious OPEC meeting in December, when the group scrapped its production ceiling altogether in a disagreement over output policy, has brought into sharp question the future of OPEC, which holds its next regular meeting June 2 in Vienna. OPEC is dead, many commentators have written, as divergent interests have cracked the group and made any consensus on how to manage the market as unlikely as a blizzard in Doha. “We’ve killed OPEC,” Texas Congressman Joe Barton said in a February interview with CNN, saying the December lifting of the US’ decades-old restrictions on crude exports will put a further squeeze on the producer group. The Republican is not entirely wrong on premise, though his OPEC death declaration is a bit overwrought. After all, OPEC has ridden through price crashes and fractious relationships before. OPEC still attracting new members “OPEC is a bureaucratic organization; it is unlikely to go away anytime soon even if it never made another production decision,” said Jamie Webster, a Washington-based independent analyst. “It may be ineffective on the big decisions, but it is arguably still relevant in some form.” Dysfunction and recent Doha embarrassment aside, OPEC membership still maintains sufficient cachet that Indonesia reactivated its suspended membership last year, while Gabon is also seeking to rejoin the group, he noted. Even Washington-based consultant Bob McNally, who characterizes the current market as having entered a “post-OPEC” era, due to OPEC’s unwillingness to serve as swing producer, said the organization will remain as a conduit for its members to discuss market strategy. “OPEC members are used to operating amidst high tensions among members,” said Bob McNally, a former energy adviser to US President George W. Bush. “They will exchange competing views in the meeting and to the press afterward, but this is par for the course.” Beyond hosting the twice-annual meetings of its member oil ministers in Vienna, where it declares its output policies, OPEC also provides research on the market and issues regular reports to the public, and its secretary general, Abdalla el-Badri, speaks frequently at forums to represent producer views. OPEC’s Vienna secretariat hosts a workforce of about 150, including researchers, statisticians, administrative staff and public relations personnel. Amrita Sen, the London-based chief oil analyst with Energy Aspects, said to look for signs of obvious discord when judging OPEC’s ability to implement policy. Russia may still have a role to play, as it appears it could be invited to consultations surrounding the June 2 meeting, though the impetus for now is on OPEC to find a détente among its own sparring factions. “Historically, the most successful deals, particularly when OPEC is concerned, have worked best when agreed behind closed doors and official meetings have only been used to communicate the pre-agreed message,” Sen said. “That still remains the case.” — Herman Wang in Washington The post OPEC’s grip might loosen, but it still has pull: Fuel for Thought appeared first on The Barrel Blog . http://everythingshale.com/news/2016/april/25/opec-s-grip-might-loosen-but-it-still-has-pull-fuel-for-thought/ http://everythingshale.com/news/2016/april/25/opec-s-grip-might-loosen-but-it-still-has-pull-fuel-for-thought/ Mon, 25 April 2016 00:01:17 http://everythingshale.com/news/2016/april/22/turkish-steel-shifts-gears-and-futures-contracts-appear-to-draft-off-market-uptick/ The Turkish long steel supply chain has been reminiscent of one of the more brutal ‘hors catégorie’ Tour de France climbs of late — a surprisingly fast ascent up an alarmingly steep mountainside. Onlookers can’t quite believe the magnitude of the rise and participants are hanging on for dear life, because once you get dropped it’s a rapid backslide. Prices of Turkish premium heavy melting scrap I/II (80:20) imports have risen over $100/mt since the start of February, from $177/mt CFR on February 1 to $291/mt CFR April 21, according to Platts market data. Over the same period Black Sea billet export prices have gained over $150/mt, from $243/mt FOB on February 1 to $400/mt FOB April 21. Such cost rises look almost unthinkable, particularly in a global steel market where the mainstream media’s discourse has focused largely on bad news — problems in the UK amid a whopping and growing global overcapacity being addressed by the OECD, for example. But the hefty cost increases are being passed off in mills’ product prices; Platts benchmark FOB Turkey rebar assessment has risen from $320.50/mt on February 1 to $478/mt April 21. Initially higher export offers gained little traction, and mills were supported by the strong domestic activity — domestic activity continues to be good, and large mills are still looking to pass off further cost increases to home buyers. A lack of competitive alternatives globally has undoubtedly led to these overseas offers being more widely accepted by buyers in the Middle East and US. China is still present in the export markets, but its offers have moved up at breakneck speed on brisk domestic demand, and undoubtedly a good degree of speculative buying by traders. While the China Iron & Steel Association is warning rising output — with March production in China up — could curtail the gains, most participants appear more bullish. Stocks are low and the weather is warm, aiding construction and infrastructure spending, they suggest. The now renowned flower show in Tangshan is undoubtedly filtering into more bullish sentiment, with the potential for supply curbs propping up prices. Some mills are making as much as Yuan 600-800/mt on their crude steel production, according to sources. At the same time Beijing is pushing hard to achieve its gross domestic product for the year, with some thinking it could announce stimulus measures that may further boost the steel market. What does the precipitous climb in the Turkish market mean? Well, for one, the London Metal Exchange is having some success with its embryonic rebar and scrap futures contracts. The scrap contract traded 15,330 mt in March, or 1,533 lots, while rebar traded 2,480 mt, or 248 lots. Neither number looks huge if you’re trying to hedge a large vessel, but all contracts have to start somewhere, and both have curves going out over a year with market makers and liquidity providers submitting numbers daily. One market maker suggests the LME’s “aggressive” traveling and meeting of banks and end-users has broadened participation in the contracts, alongside recent volatility. “As someone who has been on the trading and physical side, it is starting to look like the physical side is opening up to participation in these type of instruments,” the source said. Phillip Price, head of market risk management and derivatives trading at Stemcor, also believes mills and merchants are starting to trade the scrap contract. “Particularly encouraging is increased activity in intramonth spreads, which can be considered a sign of a contract that is being utilized by participants in the physical supply chain such as mills and merchants. Anecdotally, there are a number of mills now actively trading the contract as well as several ferrous scrap suppliers and a number of traders,” he said. Scrap liquidity is spreading along the curve with usage from a variety of stakeholders looking to manage exposure to price volatility, he added. “The timing is optimal, particularly given the very rapid price increases we have seen across the segment over the past few months and many physical operators are understandably looking to protect themselves from the risk that prices will retrace their recent gains,” Price concluded. The post Turkish steel shifts gears and futures contracts appear to draft off market uptick appeared first on The Barrel Blog . http://everythingshale.com/news/2016/april/22/turkish-steel-shifts-gears-and-futures-contracts-appear-to-draft-off-market-uptick/ http://everythingshale.com/news/2016/april/22/turkish-steel-shifts-gears-and-futures-contracts-appear-to-draft-off-market-uptick/ Fri, 22 April 2016 00:01:38 http://everythingshale.com/news/2016/april/21/us-ep-focusing-on-the-strength-of-permian-assets/ Last week in midtown Manhattan, The Independent Petroleum Association of America hosted the 22 nd annual Oil & Gas Investment Symposia. In addition to a couple of fantastic industry keynotes (one of which was presented by our own CEO Allen Gilmer), the heads of many premiere E&P companies had an opportunity to present their current investment and operational outlook to members of the investment community. Although I have a number of posts started from this event, one of the most striking themes was how excited operators are about their Permian assets. Previously we have explored the geology of the both the Delaware and Midland Basins (in a variety of ways ), examined some of the interesting qualities of the Bone Springs , looked at activity and new production capacity , checked into vertical wells , and did a fairly thorough analysis of permian rig activity just a couple of weeks ago. I thought I would pull some of the Permian slides from a few of these presentations and take a look at the Permian from the operators’ point of view. WPX Energy Lets start with WPX Energy. WPX is a fairly large independent, who has taken the opportunity of the downturn to focus their play areas (down to three from 7) and their commodity mix (now they have a 60% focus on oil and NGLs). Because of some of the divestitures, they feel pretty strong about their cash position, and are very excited about their “world-class Delaware Basin acreage.” Image Source: Company OGIS 2016 Presentation The company has around 94,000 acres in the thick part of the Wolfcamp, and are estimating 1.1+ billion barrels of equivalent net resource potential in the position. A closer look at their geological analysis Image Source: Company OGIS 2016 Presentation reveals an expectation of ~1000 MBOE Average EURs  from some of their newer lower Wolfcamp A wells. As demand catches up to supply, it’s easy to see why they’re excited about the acreage. Cimarex Energy Co. Cimarex is an even larger operator in the Delaware Basin, with ~230,000 acres in “the fairway.” Like most operators they are excited about long term potential, and in the near term are focusing on getting more bang for their bucks. For example, in Culberson County their 7500ft Upper Wolfcamp laterals are showing impressive improvements in 30 day peak IPs, as are their 10,000ft Lower Wolfcamp laterals. Image Sources: Company OGIS 2016 Presentation Pioneer Natural Resources Pioneer was a major player in the ramp up of the Eagle Ford , first in line to export condensate overseas, and have been operating in west Texas since the late 80s. They are showing great projected improvements in their type curves for the Wolfcamp B. Image Source: Company OGIS 2016 Presentation They do plan to reduce their rig count in the play down to 12 over the course of this year, but still have an aggressive plan in place: Image Source: Company OGIS 2016 Presentation Callon Petroleum Company Callon , a pure-play 100,000+ acre operator in the Permian overall, has located over ten years of drilling inventory in the Spraberry. They have been experimenting with a Chevron Pattern for optimal density. Image Source: Company OGIS 2016 Presentation Resolute Energy Resolute Energy are a smaller cap than some of the other players that we have looked at, but do have an 87% liquids mix, and some attractive core acreage. They had one of my favorite slides (although it is a bit of an eye chart) that shows their acreage in Reeves county and gives some context as to their local peers’ performance as well. Image Source: Company OGIS 2016 Presentation Matador Resources Company Matador , who have used the time since their 2012 IPO to expand smartly into the Wolfcamp, currently hold around 87,000 acres in the Delaware. Another eyechart slide, but jam-packed with information about their position and test results. Image Source: Company OGIS 2016 Presentation Conclusion Despite the overall down state of US Onshore E&P operations, the Permian basin continues to have a surprisingly active and innovative amount of smart players (and smart money) sharpening their pencils. http://everythingshale.com/news/2016/april/21/us-ep-focusing-on-the-strength-of-permian-assets/ http://everythingshale.com/news/2016/april/21/us-ep-focusing-on-the-strength-of-permian-assets/ Thu, 21 April 2016 13:00:01 http://everythingshale.com/news/2016/april/21/maximize-economic-return-with-enterprise-asset-performance-management/ Organizations today are focused on improving that last mile of efficiency and squeezing everything they can from their existing asset infrastructure. From an asset management perspective, they’re leveraging the Industrial Internet of Things to better understand the health of equipment and keep it running safely to meet production goals. With limited capital and operational budgets, this is best accomplished with a comprehensive Enterprise Asset Performance Management (APM) solution. Enterprise APM enables organizations to exceed reliability, safety, and performance goals through collaboration; data collection and analysis coupled with actions and optimization for proactive and predictive maintenance execution. As a result, plant personnel are empowered to act before costly equipment failures occur. Comprehensive Enterprise Asset Performance Management Solution Enterprise Asset Performance Management integrates all the elements of a world class maintenance program, to help organizations move up the maintenance maturity scale.  It requires a broad portfolio to collect high-fidelity data on assets, analyze it, determine the next course of action and use that action to further refine and optimize processes. The end goal is to deliver the greatest economic return for all asset types. Operational benefits can be achieved through the early identification of equipment problems to reduce or eliminate unplanned downtime. Engineers can spend less time sifting through raw data and spend more time improving the reliability and performance of the assets that drive the profitability of the company. Financial and safety benefits are achieved through increased asset utilization and reduced downtime, as well as the opportunity to identify equipment problems before a major failure causes significant or catastrophic damage. Actual savings achieved with Enterprise Asset Performance Management Schneider Electric offers the only Enterprise APM solution that manages the collection of data from any number of sources, incorporates advanced analytics technology that combines machine learning with analytic rules and advanced pattern recognition and provides a complete enterprise asset management platform to manage asset lifecycle and maintenance processes. It also includes a variety of interactive visualization capabilities for presenting this information in intuitive ways on mobile platforms of choice. Using this comprehensive Enterprise APM solution, organizations can monitor their assets to identify, diagnose and prioritize impending equipment problems – continuously and in real time. Learn more about the comprehensive Enterprise Asset Performance Management Solution at http://software.schneider-electric.com/EAPM The post Maximize Economic Return with Enterprise Asset Performance Management appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/april/21/maximize-economic-return-with-enterprise-asset-performance-management/ http://everythingshale.com/news/2016/april/21/maximize-economic-return-with-enterprise-asset-performance-management/ Thu, 21 April 2016 06:18:39 http://everythingshale.com/news/2016/april/19/oilfield-tech-yields-better-returns-at-ogis-2016/ On April 11 and 12, 2016, the Independent Petroleum Association of America presented their 22 nd annual Oil & Gas Investment Symposia – OGIS 2016. In addition to restructuring debt and G&A, focusing on prime acreage (such as the Permian Basin), and stockpiling cash, many of the operators highlighted technical advances in their operations that are generating positive yields. Let’s take a look at some of the more commonly referenced. Everything at Once WPX Energy had a great slide that pulled a number of their technical improvements together into their vision for the company. Image Source: Company OGIS 2016 Presentation A couple of things that really stand out to me on this slide: As opposed to a number of other Permian Operators, they are keeping their laterals under a mile (many others are going for the 7,500-10,000 laterals). 1500 lb/ft+ of Proppant. That’s a lot of proppant . 4750 feet X 1500lbs = 7,125,000 lbs! If we go with the upper end of the amount of sand a railcar can carry (220,000 lbs) that’s 32 railcars per well. Of just sand. And that plus sign is a big plus sign – if they go up to 2000 lbs/ft, that’d be 43 railcars. An increase of focus on the real-time drilling problem of 3D Seismic/ Geosteering. Density A number of operators highlighted the increasing density of their well plans. For example, Jones Energy have largely tied their operational uplift to higher density frack stages. Image Source: Company OGIS 2016 Presentation Jones also points out their additional reliance on geosteering and artificial lift as driving factors in their optimization. Recompletions Unit Corporation is interesting for a variety of reason – they are an operator (Texas, Mid-continent, Rockies, and Appalachia), a driller (93 rigs – 8 of which are their proprietary BOSS walking rigs), and have mid-stream operations. They have been pursuing a recompletion program in the Gilly field in East Texas with impressive results. Image Source: Company OGIS 2016 Presentation Improving Artificial Lift Although no company at OGIS devoted a slide to improvements in Artificial Lift , you can see from the slides above that companies are relying on those improvements, mostly derived from field tuning gas lift methods, and knowing when to deploy ESPs. Data Data Data During Mondays lunch session Drillinginfo CEO Allen Gilmer, along with the chief of our consulting operations Carl Neuhaus, walked the attendees through a number of the issues facing US Onshore E&P (and the investment behind it) today. After some macro discussion of those challenges, they walked through the state of Data, Rigs, Permits, New Production Capacity, DUCs, Expiring Acreage, Geological Assessments, Operator Differentials, Multivariate Analysis, and ultimately walked the audience through a method to bring much of this information together in order to optimize well design. http://everythingshale.com/news/2016/april/19/oilfield-tech-yields-better-returns-at-ogis-2016/ http://everythingshale.com/news/2016/april/19/oilfield-tech-yields-better-returns-at-ogis-2016/ Tue, 19 April 2016 13:00:50 http://everythingshale.com/news/2016/april/14/indian-energy-demand-driven-by-emerging-middle-class/ Amrita Sen and Anupama Sen with the Oxford Institute for Energy Studies have published an insightful paper entitled “ India’s Oil Demand: On the Verge of ‘Take-Off ’”. The authors argue that India could be on the verge of a rapid burst in crude oil demand growth equivalent to what China experienced in the late 1990s. Crude oil price prognosticators should carefully observe physical Indian crude oil imports and refined product consumption for signs of such a surge. As Mike Rothman with Cornerstone Analytics has astutely observed, China is the only non-OECD country with strategic petroleum reserves, so a sudden increase in Indian apparent demand could signal that the market has underestimated global oil consumption. India May Surpass Japan in 2016 The International Energy Agency reports that India consumed 4 million barrels of oil per day in 2015 and may surpass Japan as the world’s third-largest oil users this year. In fact, U.S. crude oil could soon be exported to India . Indian crude buyers now can use the lifting of the U.S. crude oil export to negotiate transactions bench-marked to WTI, Brent, or Dubai contract prices . For example, Reliance Industries, Ltd, one of the largest crude oil refiners in the world notes it is changing crude oil benchmarks as it makes buying decisions. India is diversifying not only crude oil benchmarks but also looking to make deals in Russia . India Is Investing In Roads India is investing in infrastructure necessary to allow more families to enjoy middle-class lifestyles, including safer and cleaner road transportation, cooking and home heating. The PwC Global Construction 2030 report notes that India is currently building 30 kilometers of new road every day and that the road construction market could overtake Japan as the third-largest in the world within the next five years. Indian Families Are Investing In Safer And Cleaner Energy Consumption In their paper Moving Up the Energy Ladder : The Effect of an Increase in Economic Well-being on the Fuel Consumption Choices of the Poor in India, Harvard researchers Rema Hanna and Paulina Oliva argue that as families have access to more commercial and efficient fuels (such as LPG and electricity), families enjoy an increase in well-being as fuel consumption increased. While transitioning poor families from dirty biomass fuel for cooking and heating takes additional investment, Laura El-Katiri and Bassam Fattough’s study of fuel use by poor families in Yemen show that making liquefied petroleum gas (LPG) available reduces the time needed for biomass collection and the production of harmful pollution from burning biomass. The World Liquid Petroleum Gas Association argues that if a concerted effort is made globally to improve access to clean cook stoves, between 600,000 and 1.8 million premature deaths from hazardous air pollution. Indian investment in these fuels will benefit families and children. Indian Business Are Investing In Hydrocarbon Infrastructure Bloomberg’s Dan Murtaugh reports that Indian Oil Minister Dharmendra Pradhan is working with Iran to “develop a port in Chabahar, near Iran’s border with Pakistan … that may include fertilizer and plants and petrochemical projects.) Indian investment today in energy infrastructure for tomorrow is allowing families to live safer and healthier lives. http://everythingshale.com/news/2016/april/14/indian-energy-demand-driven-by-emerging-middle-class/ http://everythingshale.com/news/2016/april/14/indian-energy-demand-driven-by-emerging-middle-class/ Thu, 14 April 2016 13:00:29 http://everythingshale.com/news/2016/april/14/new-age-terminals-require-new-age-solutions/ Times have changed; and so have terminals. No longer just considered a “cost center,” terminals are integral stops in a supply chain. Although Terminal automation systems (TAS) have been in use for years, operational complexity, regulatory burdens and data sharing needs call for new standards in terminal automation to ensure high-quality customer service. With real-time inventory management, innovative lifting controls and advanced reporting analysis, a next-generation TAS is the bridge from ordinary to extraordinary operations. Digital age brings options The digital age brings a new wave of software options. With so many to choose from, companies must know what’s most important and how to identify systems that deliver. Not all systems offer clear visibility into every area of a terminal’s operations and are flexible enough to meet a terminal’s changing needs. The right Terminal Automation System (TAS) should increase efficiencies, improve accuracy, reduce labor and operational costs, enhance safety, and ensure more accurate regulatory compliance. A next-generation TAS will also be user-friendly and help take terminals to a new level of operational excellence. Data is power Collecting terminal data isn’t useful if you can’t analyze it, manipulate it, and report on it. You need an advanced data system that allows your data to be useful to you. The data it provides can support trend analysis, helping you minimize risks and chart a more profitable course. If your data analysis system lacks these tools, your operations may be at risk: Filtering options- flexibility to create the reports that matter to you. Visually attractive, easy to read system that includes inventory, bill of lading, database, muster, administration, and configuration reports. Custom reports-show detail about your activity, allowing you to track movements and compare volumes, and easily transfer data to other analysis systems like Microsoft Exel Capability to easily distribute reports   Next-generation TAS in action Detailed, flexible tracking See inventory in real time, by tank, product, owner, or exchange partner Support a large number of tank gauging solutions, with fast, easy set up for automatic inventory management Get an at-a-glance snapshot of terminal activity at each lane, to monitor current lifting activity and help forecast demand for daily hedge balancing A user-friendly interface Clearly see the level of each product with color-coded displays and an easy-to-use product tracking interface Group tanks by specific product or into product groups, as needed Increased data capture automation Automatically pause lifting across all lanes at a set time to capture tank gauges, calculate inventory and distribute reports to key players Simplify book-to-physical reconciliation with automatic allocations of gains and losses at close Advanced lifting controls Apply lifting controls across a matrix of variables, including shipper, customer, driver, carrier product and terminal Interface with third-party credit and allocation vendors Ensure compliance with government access regulations affecting your terminal, such as the transportation Worker Identification Credential (TWIC) program By supporting better demand management, a quality TAS can reduce your inventory risks and improve customer service and driver interaction, particularly when supply is tight.   Next-level efficiency Now that you know what the software can do, the next crucial step is to decide which partner will help advance your enterprise forward. You want to partner with a team that understands your needs, follows market trends and has a proven successful track record in helping companies better serve their customers. With a strong partner on your side and a cutting-edge TAS poised to meet the growing needs of today’s terminal operations, you are fully equipped to move your enterprise forward-and forward fast. To learn more about Terminal Automation Systems and how Schneider Electrics solutions provide a competitive edge, visit our website today.   The post New-Age Terminals Require New-Age Solutions appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/april/14/new-age-terminals-require-new-age-solutions/ http://everythingshale.com/news/2016/april/14/new-age-terminals-require-new-age-solutions/ Thu, 14 April 2016 12:57:55 http://everythingshale.com/news/2016/april/12/7-oil-and-gas-market-themes-you-should-be-following/ On March 29, 2016, we attended the Hart Energy Oil and Gas Investor Energy Capital Conference in Austin, Texas, where Executives from E&P companies, financial institutions and private equity firms “spent two days networking, strategizing and hearing from some of the industry’s top experts.” The presentations were all very enlightening, and provoked a lot of energetic and thoughtful discussion. In particular, the lead-off presentation by S. Will VanLoh at Quantum Energy Partners wove together a number of the larger themes that we’ve been looking at during the past couple of years of activity, and I thought I would use his 7 Market Themes as a springboard for discussion here on the blog. So lets. 1 This downturn is supply driven, like the 80’s downturn, but with much less OPEC spare capacity We have spent some time discussing the current global inventory levels –  the ~1  MBOE/day or so surplus of crude available to the market. We have also discussed from early on the differences amongst OPEC member countries as to whether they’re willing or able to provide a supply cap for stabilization. However, I think Mr. VanLoh’s point about OPEC spare capacity is quite interesting. Image Source: Quantum presentation at ECC 2 Technology will continue to drive down costs, increase recoveries and thus lower break‐evens This has certainly been explored – we see that even at the much lower drilling rates US Onshore costs are coming down – some at the hands of lower service rates – but certainly a lot of improvement in planning and executing wells for maximum ROI. (There is a case to be made for the focus on  sweet spots as well.) 3 Domestic and global product inventories are at all time highs and will keep a lid on prices even as production rolls over. 4 Additionally, DUC well inventory will also keep a lid on prices for a period of time Yes and Yes. Though the global demand for energy continues to grow (with the current low cost of hydrocarbons further encouraging future petro-dominance), it will take a while for supply and demand to level out the current surplus of inventory. This fact, coupled with an awareness of the defacto in-ground storage volume of DUCs in the US, will likely keep the price from rallying too dramatically. 5 OPEC, and more specifically Saudi Arabia, holds the keys to understanding how long this downturn can last Though Iran’s newly available (or at least newly legally available) production supply   may be moving the headlines at the moment, it’s pretty clear that Saudi Arabia’s loss-leadership is costing them a lot of cash, and at some point even they will need to instrument a certain break-even to provide for their own long-term future. 6 Emerging market oil consumption trends are the biggest long term driver of oil prices Yes. Despite some amount of concern over a sluggish economic outlook in China, they are importing crude oil at record levels . Also, the removal of subsidies has resulted in a sharp expansion of demand for oil in India. 7 LNG exports and power demand are the biggest long term drivers of gas prices The dream of export-ready LNG on the Gulf and East Coast is rapidly becoming a reality. Again, the Asian market is the biggest driver.  The (almost finished) expansion of the Panama canal, and the possibility of the Kra Canal should further ease access to those markets. The European LNG market  is also seeking some amount of stability in supply given the unstable aspects of business dealings with Russia . http://everythingshale.com/news/2016/april/12/7-oil-and-gas-market-themes-you-should-be-following/ http://everythingshale.com/news/2016/april/12/7-oil-and-gas-market-themes-you-should-be-following/ Tue, 12 April 2016 13:00:16 http://everythingshale.com/news/2016/april/07/the-permian-basins-west-texas-oil-renaissance-continues/ For the last five years or so, horizontal wells drilled with large rigs and drilling pads has been the picture in most people’s minds when they think of the oil and gas industry. With the downturn in pricing many of these rigs have been stacked due to uneconomic plays. Conventional oil and gas and vertical wells have largely been considered low hanging fruit and a staple of many producers’ portfolios that can get ignored when pricing is favorable and other plays are hot. Some companies in light of today’s environment might give more light to their vertical drilling programs as the costs associated are far less than that of their horizontal counterparts and economics are still favorable. The areas that will be hit the worst in today’s pricing environment are those where the unconventional boom occurred that do not have large scale conventional formations to fall back on for vertical drilling and production. Figure 1.1 : US Well Starts by Month colored by trajectory States such as Texas and Oklahoma have had a fairly consistent amount of vertical well starts while their horizontal counterparts have decreased. One region where unconventional formations are still hot, horizontal or vertical is the Permian. This is due to lower break even costs and a robust midstream system that has been in place for a long time. The Permian is not new to the E&P space, with many wells having produced for decades regardless of macro environment. An increase in the push for horizontal wells has been increased due to being one of the few economical plays left in the current environment. Figure 1.2 : Permian Well Starts Through Time Using DrillingInfo Analytic platform well starts by well type was mapped. The overall profile is that well starts for both horizontal and vertical have decreased over time. In March 2014, when DrillingInfo historical rig data begins, vertical well starts accounted for approximately 55% of all well starts in the Permian. Today that figure is down to approximately 23% of all wells drilled while horizontal wells have gone from 38% to 68% of all wells drilled. The overarching question is how many of those wells that were drilled have actually been turned on and are producing. Using DrillingInfo’s analytics platform well starts over time, colored by current status for each trajectory was mapped for the Permian. Figure 1.3 : Vertical Well Status by Month Drilled in Permian Basin Figure 1.4 : Horizontal Well Status by Month Drilled in Permian Basin Of the reported vertical wells drilled inside DrillingInfo’s analytics database for the Permian 87% have been either brought online or had existing production while horizontal wells report 85% with new or existing production. The drop off towards the end of 2015 is due to no status production reports on wells as they may be too new to have any production registered with the state. Driving through the fields of the Permian, SCOOP, and Utica over the past few months there are signs that the industry is still alive. With overall rig counts in the Permian alone at 152 active, which represents a downturn of nearly 50% over the last 12 months there is reason to be doubtful. However, we are able to see a shift in priorities in E&P’s to assets that they consider most economic. The Permian while showing signs of a slowdown is still growing overall with 63 horizontal and 20 vertical wells having a reported rig on site in March 2015. There is a backlog of DUCs but as the low price environment continues and completion costs come down we will see those wells begin to come online. Since many of those wells are economic currently, waiting for completion costs to lower will only raise their value to many E&Ps. The strategy might be risky as operators risk mineral owner issues if they do not produce the wells in a fair amount of time as we have seen in the Bakken and completion costs might not lower. The offset is that operators are allowing for pricing to hopefully rebound and are not having any real loss other than drilling costs. With a large backlog and slow decrease in status of these DUC’s, new well starts will continue to suffer as those older wells have to be brought online which will only continue to stifle some parts of the industry that are reliant on new well starts. http://everythingshale.com/news/2016/april/07/the-permian-basins-west-texas-oil-renaissance-continues/ http://everythingshale.com/news/2016/april/07/the-permian-basins-west-texas-oil-renaissance-continues/ Thu, 07 April 2016 13:00:40 http://everythingshale.com/news/2016/april/06/gasoline-futures-to-hit-seasonal-high-in-may/ Where’s crude oil headed? After a 61 percent surge in five weeks from a nearly 13-year low to more than $40 per barrel in March, will U.S. crude prices trend higher in spring? Take into account the following considerations: Will OPEC and Russia agree to a production freeze at their January production rates? Talk of the coordinated response to low prices and high supply underpinned March’s rally, but now an agreement is in doubt ahead of a proposed meeting on April 17. Will Iran production continue to increase in the wake of sanctions’ relief? Iran, with production at roughly 3.2 million bpd, said it would increase output to 4 million bpd. Will the U.S. dollar, which has an inverse relationship with U.S. crude oil prices, trend lower in spring after rallying earlier in the year? The U.S. Federal Reserve will be watched closely for a change in its dovish posture. In April, will crude prices slip below $30 per barrel? Crude prices are retracing the downside after failing to hold above $40 per barrel. Will U.S. crude production finally drop sharply after a precipitous decline in active rigs drilling for oil? The U.S. rig count is down 77 percent from its peak in October 2014. After a slow start in January, gasoline demand has trended above historical averages, and could reach a record high in 2016. Diesel demand, however, is very weak, due to sluggish manufacturing activity in the U.S. and abroad. Expecting more price volatility With so many bearish factors, such as strong production and high supply levels, uncertainty will continue to drive price volatility. Several factors will need to collaborate in order for crude prices to crack above $45 per barrel, including: Sustained drop in U.S. production Continued strong gasoline demand Drop in OPEC production Drawdown in oil and refined products stored supplies Strengthening of U.S. (GDP growth over 3 percent) and global economies While a dramatic swing in the short term in any one of these categories is unlikely, gradual alignment over the course of the year could push oil prices above $50per barrel late in 2016. Seasonal highs on the horizon Despite abundant oil supply, gasoline prices are expected to follow their traditional seasonal swing higher in the spring, but will remain low compared to recent pump prices which is great for drivers. On the futures market, the gasoline contract should reach a seasonal high in May at roughly $1.75 per gallon.  Strong driving demand over Memorial Day could cause extended price gains in the markets for oil and gasoline, but it’s important to note that abundant supply will limit upward price pressure. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market, click here . The post Gasoline futures to hit seasonal high in May appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/april/06/gasoline-futures-to-hit-seasonal-high-in-may/ http://everythingshale.com/news/2016/april/06/gasoline-futures-to-hit-seasonal-high-in-may/ Wed, 06 April 2016 06:30:41 http://everythingshale.com/news/2016/april/05/do-you-have-your-duc-s-in-a-row-drilled-but-uncompleted-wells-made-visible/ Many in the industry have considered pinning down the number for drilled but uncompleted wells (DUCs) elusive. Raymond James Equity Research firm has publicly said that “if anyone tells you they know the [DUC] number, they haven’t done the work” and “frankly, any definite answer regarding the DUC question is conveying a completely false sense of precision.” They described the task of figuring it out as “Sisyphean,” referring to the Greek mythological king Sisyphus who was punished by being forced to roll an immense boulder up a hill, only to watch it roll back down. Despite all the warnings Drillinginfo felt this number was too important to the oil and gas industry not to do something. I am happy to report the work has been done and that Sisyphus’s boulder is staying put. It could not have come at a better time. While in the past DUCs were not really an issue, today they could not be more relevant. Due to the fall in oil prices in 2014 a large inventory of US DUC’s has been building up, making them a market factor affecting future oil prices as they represent additional crude oil supply that could come back online quickly after prices rebound. Whether you are an operator, oilfield services company, or financial services firm having your “DUC’s in a row” by knowing who, what, and where the DUC’s are can be a huge competitive advantage in today’s market. As an operator you need to understand where all competitor DUCs are located to make tactical decisions about what assets to buy or sell, which company owned DUCs make sense to bring online, and how much leverage to use with vendors. For oilfield service companies looking to complete DUCs you need to get there before the competition by identifying which DUCs will most likely be completed based on assumed breakeven oil prices. Finally, for equity and debt analysts, you need to know the most accurate value for E&Ps DUCs inventory to make well informed equity and debt investments. A key part of the analysis and the reason Sisyphus’ boulder doesn’t roll back down the hill is that with DI Rig Analytics DUC counts update in real time. Any number published in the past was obsolete before the ink dried making all the hard work of figuring it out truly “Sisyphean.” Drillinginfo relies on a proprietary algorithm which uses GPS devices on over 95% of the US rig fleet ensuring the cleanest, and most reliable data set in the market. Drillinginfo DUCs Intelligence is available for the following states with sufficient data coverage and appropriate reporting requirements: Alabama, Arkansas, California, Colorado, Louisiana, Montana, North Dakota, New Mexico, Ohio, Oklahoma, Pennsylvania, Texas, Utah and Wyoming. http://everythingshale.com/news/2016/april/05/do-you-have-your-duc-s-in-a-row-drilled-but-uncompleted-wells-made-visible/ http://everythingshale.com/news/2016/april/05/do-you-have-your-duc-s-in-a-row-drilled-but-uncompleted-wells-made-visible/ Tue, 05 April 2016 13:00:19 http://everythingshale.com/news/2016/april/01/strong-run-rate-coincides-with-higher-gasoline-demand/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices A 10-year seasonal analysis of crude net inputs at US refineries using federal data finds the year-ended in late March was consistently the most robust, peaking in late July 2015 at 17.075 million bpd, which was more than 4% higher than the comparable year-ago period. The expanded throughput rate was due to three factors—abundant crude supply, strong products demand domestically and for exports, and greater refining capacity. Crude oil distillation capacity in the United States began 2016 at 18.044 million bpd, 409,000 bpd or 2.3% above the start of 2015, according to statistics from the Energy Information Administration. In 2015, US refiners averaged a run rate of 91.2%, up from 90.4% in 2014 and above the 88% five-year average and the highest utilization rate since 2004 when it reached 93%. This time last year West Texas Intermediate crude traded on the New York Mercantile Exchange was two weeks into a rally that pushed the futures contract closest to delivery to 2015’s high at $62.58 bbl reached on May 6. The nearest delivered WTI contract would hold above $55 bbl until early July, with the holders of bullish bets banking on steep declines in US crude output on the belief low market prices and high production costs would force shut-ins. The magic number was, and still is, for a break below 9.0 million bpd, with domestic production eclipsing the psychologically significant figure in the fourth quarter 2014 for the first time since 1986. Instead, domestic production would remain strong, peaking in April 2015 at nearly 9.7 million bpd, and beginning 2016 at roughly 9.3 million bpd. WTI futures are now trading below $40 bbl and domestic crude production is beginning April down 7.2% form a year ago near 9.0 million bpd, which is a significant decline. However, US shale oil producers have confounded the world with their resilience, and refiners have ramped up their output to process the bounty. The drop in procurement costs for refiners in securing crude have been passed onto the consumer in the form of lower prices for heating and transportation fuels, and have bolstered consumer sentiment despite sluggish economic growth. Pure-play refiners have also profited from the lower procurement costs, and for integrated oil companies it has been a bright spot in an otherwise gloomy market environment. This spring, the gasoline crack spread—the margin achieved in processing a barrel of crude into gasoline has declined to a six-year low when calculating WTI futures against the NYMEX gasoline contract (reformulated blendstock for oxygenate blending or RBOB). US gasoline inventory reached a 36-year high in the first quarter, and Econ 101 teaches us that supply abundance will pressure profits. Yet, crack spreads are quite healthy, beginning the second quarter just over $20 bbl, and when calculating the crack spread against Brent crude futures traded on the IntercontinentalExchange show a smaller decline against the year prior spring. This can be explained with the massive buildout in US crude infrastructure, especially in the Houston area, and the ending of restrictions on US crude exports put in place in the 1970s. WTI, which had lost value against the Brent contract beginning in late 2010 during the early days of the shale oil revolution, briefly erased its discount position against Brent earlier in 2016 as the US crude benchmark was no longer landlocked. US crude exports have been modest, slipping below 400,000 bpd in late January to now from 500,000 bpd, and are expected to remain limited in large part due to the prevailing global supply overhang. Yet, there is the psychological factor that the United States can now export crude that combined with this summer’s expansion of the Panama Canal effect world trade flows. EIA shows US gasoline exports 12.9% below the five-year average at 400,000 bpd in late March, and 41% below a year ago in early March as global competition intensifies and Brazil, now in its second year of recession, dials back imports. After a 3.1% year-on-year increase in 2015, domestic demand for gasoline remains strong. As we peer ahead, we should see the trend continue, with gasoline supplied to market running 3.6% higher in 2016 through March 25 than the same period in 2015, EIA data shows. Steady improvement in US employment , with the Labor Department reporting first quarter job gains have averaged 209,000 per month, bolsters the case for ongoing strength for gasoline demand in 2016 . To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market, click http://www.schneider-electric.us/en/services/cloud/oil-and-gas/ . The post Strong Run Rate Coincides with Higher Gasoline Demand appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/april/01/strong-run-rate-coincides-with-higher-gasoline-demand/ http://everythingshale.com/news/2016/april/01/strong-run-rate-coincides-with-higher-gasoline-demand/ Fri, 01 April 2016 10:42:24 http://everythingshale.com/news/2016/april/01/the-benefits-of-arbitrage/ No one knows better than you how difficult today’s market is — especially when it comes to your bottom line.  Chasing loads for an extra tenth of a penny is frustrating to say the least, yet that is what many do.  Finding ways to turn that tenth of a penny into real dollars takes foresight and planning.  It takes the Benefits of Arbitrage. Arbitrage Defined Arbitrage is defined as the practice of taking advantage of a price difference between two or more markets or options.  The term “ARB”, may be used to encompass the best buy at a single rack, geographic ARBs, ARBs, between indexes, PADDS or origin points, and market timing. Examples of ARBs Best buy at a single rack: This is an ARB that you deal with each day but you may not be asking all the questions to make the best decisions: Do you know all the suppliers in your market and surrounding ones? Do you have credit with all those suppliers or know what it takes to get credit? Do you actively engage in day deals with all your suppliers, and are you available to them when they want to move product? Geographic ARBs : They have many of the same rules as best buy, but finding geographic ARBs means knowing suppliers in your surrounding markets and having a relationship with them. In addition, how far are you looking, or are you casting your net wide enough?  In recent months, an ARB between cities two hundred miles apart fetched an ARB of $.55/gallon! To anticipating geographic ARBs, consider the ARB between PADDs or origin points. Watch for the spread to widen at spot markets and start considering the possibilities. If you are willing to move barrels when needed, the discounts will be there.  All you have to do is ask. Keys to Success None of this really matters if you don’t have the right pieces in place to find and execute ARBs. To ensure you have as many options as possible, stay up to date with the following: Maintain trusted relationships with suppliers so they know to call you when they have product to move Make sure your drivers and common carriers are carded everywhere you want to pull an ARB Stay ratable with your key carriers by maintaining consistent business relationships Communication between supply and logistics is fundamental to capturing ARBs.  Both departments must be on the same page and have shared goals, metrics, and rewards.  Of course, this takes communication. When it makes sense to avoid ARBs Of course, there are certainly times when even if you can capture an ARBs, it may not make good business sense, such as: The need to pull a contract The savings aren’t ideal Facing a customer run-out situation A lengthy delay at the rack Logistics costs outweigh the savings Reduced price at a closer location Whatever the reason, you may not be able to chase an ARB, but you can never chase an ARB if you aren’t prepared to do so. Crunch Time The best thing about ARBs is they prepare you for when it is “crunch time”.  Whether it is a seasonal outage, a weather event, a pipeline or refinery disruption, you know where to go, and you have the process in place. You have the supply options, allocations, supplier credit, truck time and carrier relationships. Perhaps, unlike your competitors, you have the ability to supply your customer, and the opportunity to make money in a difficult market. A Clear Financial Advantage Acting on ARBs will give your organization a clear financial advantage over your competitors. When you recognize an ARB as a valuable opportunity, act on it. Stop chasing after that tenth of a penny, and see real dollars in your pocket as your volume and footprint grows. Say “YES” to the Benefits of Arbitrage. To learn more about Schneider Electric solutions that can help you better take advantage of ARB’s, click here .   The post The Benefits of Arbitrage appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/april/01/the-benefits-of-arbitrage/ http://everythingshale.com/news/2016/april/01/the-benefits-of-arbitrage/ Fri, 01 April 2016 08:54:41 http://everythingshale.com/news/2016/march/29/enabling-business-through-safety-security/ Gregory Hale Editor and Founder Gregory Hale has over 30 years in the publishing industry covering manufacturing automation for 10 years as the Chief Editor of  InTech  magazine. Prior to starting at InTech  in 1999, Hale was the Editor in Chief at Post-Newsweek’s  Reseller Management  magazine. In addition, he is the co-author of the book, “ Automation Made Easy” “Everything You Wanted to Know About Automation – and Need to Ask ”. An oil platform stood silently awash in the Gulf of Mexico waves a short time ago and unbeknownst to workers on the rig and those offshore, malware was on board turning that facility into a potential floating time bomb. Malware, downloaded via satellite and through USB drives, incapacitated computer networks and left the rig lifeless, unable to perform any duties for a period of time. While the rig eventually came back on stream after workers furiously fixed the locked up system, it turned out a worm was flooding their network out in the middle of the ocean. Had this incident been a targeted attack, the rig could have sustained major problems. With enough knowledge of a facility like an oil platform, refinery, or pipeline network, a cyber attack that used distributed malware could lead to physical damage and serious losses of revenue. There is no explaining how many millions of dollars that unplanned downtime cost the oil company. In today’s tight economy, companies, big or small, cannot afford to lose that kind of money to any kind of safety or security incident. Uptime remains critical. Uptime Remains Critical The cost of unplanned downtime is just one case to show management there is a solid business proposition behind employing solid safety and security programs. The idea pushing forth in the industry today is safety and security are not just insurance policies to protect against an incident or bad guys, but rather a business enabler that keeps the network and system up and running, productive and profitable. “The insurance justification doesn’t always work,” said Farshad Hendi, industrial automation safety industry manager at Schneider Electric. “People will say I worked at this plant for the past 15 years and we have never had an incident. It is true you didn’t have an incident in 15 years, but that does not mean you will not have an incident tomorrow. Uptime and operational stability is something that resonates with people very quickly. If your plant is down for one week you can quickly determine the cost and you can quickly determine how much investment I need to put in and how much gain I will get.” Indeed, when talking about safety or security users need to consider metrics such as improving the efficiency of operations, reduction in time to detect incidents and return on prevention. But “wait a minute,” a senior manager could say, “we have never been hit before, so why should I pay for something that doesn’t generate revenue?” The simple answer is, safety and security can pay off big dividends. “It is an interesting conversation to have,” said Joshua Carlson, industrial automation manager for cyber security in North America at Schneider Electric. “The challenge is getting users to understand we are not just looking at the risk model and figuring out the probability. With cyber security, it is not a matter of if, but a matter of when. The challenge becomes at some point when are you going to have an incident and how much is it going to cost you?” more   Join us at CONNECT 2016 to learn more about process safety and cyber security! The post Enabling Business Through Safety, Security appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/march/29/enabling-business-through-safety-security/ http://everythingshale.com/news/2016/march/29/enabling-business-through-safety-security/ Tue, 29 March 2016 16:09:56 http://everythingshale.com/news/2016/march/24/hmi-and-alarm-standards-and-best-practices-impact-on-operator-performance-and-operations-excellence/ Bridget Fitzpatrick is an HMI, Abnormal Condition Management and Human Factors Practice Lead for Wood Group Mustang in Houston, TX. She has 25+ years of experience in process engineering, control engineering, management, consulting, and energy management in the process industry. Her experience includes the chemical, plastics, pharmaceuticals, refining, mining and power fields.  Prior to joining Wood Group Mustang, she was associated with Celanese Chemicals for 15 years. She is a member of ISA, AIChE, HFES, and ACS. She is active on both the ISA18 (Alarm Management) and ISA101 (HMI) standards and practices committees. She is a Managing Director (ISA 18 committee) on the ISA Standards and Practices Board. Bridget is a graduate of MIT with a Bachelor’s Degree in Chemical Engineering. She also holds a MBA in Technology Management from the University of Phoenix. She has made multiple presentations and has multiple publications in the areas of HMI and alarm management. It is funny how careers unfold. I have been pretty heavily involved in the development of standards over the last 10-15 years, dabbling at it a bit longer. I became interested in pure self-defense. As a young process engineer, I got involved in PHAs (Process Hazard Analysis) and the early start of functional safety in the chemical industry in the early 90s. Figuring out how to comply with ISA84 as it emerged without the wealth of software and guidance documents was a challenge. It was an interesting time and watching the technology mature is a privilege in many ways. For me, what emerged was a true interest in developing standards and guidance documents that capture the minimum acceptable and best practices and define both in a way that provided a tool to herd engineers into a consistent execution model. A good follow on to the PHA support that I had been doing was to provide input to the ASM Consortium when the operating company that I worked for became a member. My areas of research and support were heavily alarm management, HMI and technologies to support the operator of the future. I had solved a wide variety of technical problems, but even early on, I was more intrigued with solving the human element of the equation. So my passion became providing the best alarm and HMI design to support the operator experience. And to translate that to the bottom line with better decision making and better outcomes. The collaboration with the ASM Consortium was interesting, with some of the best and brightest trying on new theories and tools and evaluating successes and failures. We worked hard to shoehorn new ideas into old technologies and learned some key lessons about being early adopters and the folly of stupid engineering tricks that did not make sense or adequately support the operator. And we saw large gains across the board. When I heard of emerging ISA standards committees for alarm management and later for HMI, I was on board. I wanted to ensure that my company and later my consulting clients could live with and benefit from the standards under development. Working with ISA, I found again some of the best and brightest toiling to move the process industry forward. It sounds corny, but moving the technology forward is one of the most rewarding aspects of a career in automation. I think that it is an interesting story to tell, to highlight some of the emerging best practices, to link people to some of the people on the front lines of development, to show how to get involved, what is coming next and share some lessons from the journey. To learn more on this topic of HMI’s and Alarm Standards and best practices from Bridget Fitzpatrick, join us at the CONNECT 2016 Automation Conference in New Orleans.   Register here The post HMI and Alarm Standards and Best Practices – Impact on Operator Performance and Operations Excellence appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/march/24/hmi-and-alarm-standards-and-best-practices-impact-on-operator-performance-and-operations-excellence/ http://everythingshale.com/news/2016/march/24/hmi-and-alarm-standards-and-best-practices-impact-on-operator-performance-and-operations-excellence/ Thu, 24 March 2016 09:42:50 http://everythingshale.com/news/2016/march/21/what-is-operational-excellence/ Over the last few years, I have heard the term “ operational excellence ” become more frequently used. I always thought I knew exactly what it meant: “making your operations run at peak performance.” However, as I heard the term used more often it seemed to also be used to encompass a wider variety of applications and circumstances, so I thought I would do some research to find out exactly how “operational excellence” was defined. That turned out to be a huge undertaking since there are so many definitions. However, I was able to see some clear themes that would lead to my own definition. It is clear that results are important, as is consistency, efficiency & effectiveness. Taking Operational Excellence to the next level Since my experience has been shaped by the process industries, I will say that in my opinion, this is my best guess at the definition of “operational excellence” as it applies to the process industries. Operational Excellence is the attainment of efficient, effective & reliable operations to achieve optimal profitability for the process. However, operational excellence will only get you the results you desire if you are focused on the right business strategy.  Operational Excellence at producing product A is great, however, when product B is preferred, you are missing out. It is also important to understand that Operational Excellence isn’t achieved overnight. It is a methodology that takes a commitment to focusing on continually improving the process, and its operator, over the long term. Why is Operational Excellence important to you? One word: profitability. All business is centered around profitability; it is the revenue produced by the process that pays for your salary. Tools for Operational Excellence I feel that there are four ways that SimSci software from Schneider Electric can assist you in achieving operational excellence: Continuous Improvement Actionable Intelligence Workforce Optimization Managing & Lowering Risk. Don’t just take it from me – we surveyed our customers (using TechValidate ) asking them several questions about Operational Excellence. For instance 89% of our customers feel that SimSci software helps them achieve operational excellence ( TechFact ). Additionally, our customers provided details on how SimSci software helped them achieve Operational Excellence. You can see in the results below that SimSci helps customers in many ways. You can see all the Operational Excellence results, by Industry, here   In the coming months I am going to publish blog posts on all four of these topics, so stay tuned. But in the meantime, please use the comment section to tell me what “Operational Excellence” means to you? In September, SimSci will hold their annual event, Simulation for Business Excellence, in Pasadena, CA where the theme will be Operational Excellence. Please visit the conference website and consider registering today. The post What is Operational Excellence? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/march/21/what-is-operational-excellence/ http://everythingshale.com/news/2016/march/21/what-is-operational-excellence/ Mon, 21 March 2016 12:54:52 http://everythingshale.com/news/2016/march/2/doe-announces-80-million-in-funding-to-increase-supertruck-efficiency/ Sarkar also announced more than $12 million in selections for three new cost-shared projects focused on the research, development, and demonstration of plug-in electric powertrain technologies for medium- and heavy-duty vehicles. Improving the efficiency of commercial trucks is critical to reducing our petroleum consumption, strengthening our clean energy economy, and further reducing our contributions to climate change,†Deputy Assistant Secretary Sarkar said. This new funding will not only accelerate innovation but also foster rapid market adoption of new energy efficient vehicle technologies.†The Department of Energy launched its SuperTruck initiative in 2010. Vehicles developed under SuperTruck I are Class 8 combination trucks commonly known as 18-wheelers that dramatically increase tractor-trailer fuel, engine and drivetrain efficiency through the use of advanced technologies. As the backbone of domestic freight transportation, 18-wheelers haul 70 percent of all freight tonnage. SuperTruck II projects will research, develop, and demonstrate technologies to improve heavy-truck freight efficiency by more than 100 percent, relative to a manufacturer's best-in-class 2009 truck, with an emphasis on technology cost-effectiveness and performance. Achieving Class 8 truck efficiency increases will require an integrated systems approach to ensure that the various components of the vehicle work together. SuperTruck II projects will utilize a wide variety of truck and trailer technology approaches to achieve performance targets, such as improvements in engine efficiency, drivetrain efficiency, aerodynamic drag, tire rolling resistance, and vehicle weight. The recipients of the funding for plug-in electric powertrain technologies for medium and heavy-duty vehicles announced today are: Robert Bosch LLC (Farmington Hills, MI) will receive $5 million to develop and demonstrate a medium-duty plug in hybrid vehicle powertrain that reduces fuel consumption by 50 percent. Cummins Corporate Research and Technology (Columbus, IN) will receive $4.5 million to develop and demonstrate a Class 6 plug in hybrid delivery truck that reduces fuel consumption by 50 percent. McLaren Performance Technologies (Livonia, MI) will receive $2.6 million to develop a Class 6 delivery truck with a scalable, innovative, lightweight, low-cost, and commercially-viable plug-in electric drive system that improves fuel economy by 100 percent. http://everythingshale.com/news/2016/march/2/doe-announces-80-million-in-funding-to-increase-supertruck-efficiency/ http://everythingshale.com/news/2016/march/2/doe-announces-80-million-in-funding-to-increase-supertruck-efficiency/ Wed, 02 March 2016 16:00:43 http://everythingshale.com/news/2016/march/2/energy-news-roundup-chesapeake-ceo-indicted-transcanada-injunction-stalled-moniz-pushing-arpa-e/ Former Chesapeake Energy CEO Aubrey McClendon was indicted Tuesday on federal charges of conspiring to rig bids for oil and natural gas leases. [ CNBC ] Premier Rachel Notley says she’s holding her fire for now on Quebec’s plan to request an injunction related to TransCanada’s proposed Energy East pipeline. [ CBC News ] Energy Secretary Ernest Moniz yesterday laid out a case for stepping on the gas pedal for his department's signature innovation initiative, the Advanced Research Projects Agency-Energy. [ Scientific American ]   http://everythingshale.com/news/2016/march/2/energy-news-roundup-chesapeake-ceo-indicted-transcanada-injunction-stalled-moniz-pushing-arpa-e/ http://everythingshale.com/news/2016/march/2/energy-news-roundup-chesapeake-ceo-indicted-transcanada-injunction-stalled-moniz-pushing-arpa-e/ Wed, 02 March 2016 13:00:08 http://everythingshale.com/news/2016/march/2/top-us-official-says-adjustments-made-on-offshore-drilling-rule-following-alarmist-industry-response/ WASHINGTON A new federal rule designed to reduce the chance of another offshore drilling accident off the Gulf Coast like Deepwater Horizon has undergone some adjustments†in response to intense industry criticism, a top U.S. energy official told a House subcommittee Wednesday. Brian Salerno, director of the Bureau of Safety and Environmental Enforcement, said changes to the new offshore drilling standards had merely codified what was standard practice at his agency that inspectors did not rigidly follow the letter of the law but worked with operators on offshore drilling rigs to find safe and reasonable solutions. There's been a lot of alarmist language associated with this,†Salerno said, following a hearing before the House Subcommittee on Energy and Mineral Resources. To believe it you would have to ignore the way this agency has historically operated.†Salerno declined to go into specific changes, citing the fact what is known as the well control rule is still under review at the Office of Management and Budget. But operators have fixated on a provision within the rule that would fix what pressure wells must operate at during drilling, in the interest of preventing the sort of high-pressure gas blow back that caused BP to lose control of the Deepwater Horizon well in 2010. Critics, citing a recent report from the research firm Wood Mackenzie, have piled on the rule as overly prescriptive and likely to cause a severe pull back in oil and gas drilling in the Gulf of Mexico. On Wednesday some congressmen questioned whether the purpose of the rule was not to hurt the Gulf's oil and gas sector a nod to President Obama's plans to reduce the burning of fossil fuels to hopefully slow climate change. I am very concerned about the expertise within your agency to write this rule,†said U.S. Rep. Garret Graves, R-Louisiana. Deepwater Horizon was caused by gross negligence. It wasn't because the rules were flawed.†Salerno questioned that analysis, stating the rule had been written in response to hundreds of recommendations from various government committees and task forces that had studied the 2010 accident. And he took issue with criticism industry representatives had been locked out by BSEE. As far as engagement with the industry, we've met with them 60 times during the development of this rule,†Salerno said. Graves went on to demand the well control rule be put back out for public comment, to give companies a chance to review the adjustments†in language Salerno described. Following the hearing, Salerno said he thought the agency had sufficient testimony and was ready to move forward.  http://everythingshale.com/news/2016/march/2/top-us-official-says-adjustments-made-on-offshore-drilling-rule-following-alarmist-industry-response/ http://everythingshale.com/news/2016/march/2/top-us-official-says-adjustments-made-on-offshore-drilling-rule-following-alarmist-industry-response/ Wed, 02 March 2016 12:01:22 http://everythingshale.com/news/2016/march/2/iran-s-long-road-to-reintegrating-with-the-world-financial-system/ The recent warning by the Financial Action Task Force to banks about dealings with Iran shows that the end of nuclear sanctions was only the start of a long process. In its first public statement on Iran since sanctions relief went into effect following implementation of the nuclear deal last month, the Financial Action Task Force (FATF), whose thirty-seven members include Russia and China, in mid-February urged member states to warn their banks about the risks of doing business with Iran. Coming only a month after Iran received nuclear-related sanctions relief from the United Nations, United States, and European Union, the statement underscores the risks for European and Asian banks in renewing financial ties with Iran. BACKGROUND Established in 1989 by the G-7 (Canada, France, Germany, Italy, Japan, Britain, and the United States), the FATF is the international standard-setting body for anti-money laundering and countering the financing of terrorism (AML/CFT). Members submit to peer reviews or “mutual evaluations” of their implementation of FATF standards, and jurisdictions that fail to address strategic AML/CFT deficiencies — whether FATF members or not — are publicly identified by the FATF in statements released following the group’s plenary meetings in February, June, and October of each year. Iran has been the subject of such statements since 2008, when the FATF revised its processes for dealing with “high-risk and non-cooperative jurisdictions.” However, despite the January lifting of U.S. and EU nuclear-related sanctions on Iran, the consensus-driven intergovernmental organization did not revise the statement it has issued three times a year since calling for member states to impose countermeasures on Iran in February 2009. The statement again urged Iran to “immediately and effectively address its AML/CFT deficiencies,” noting that if Iran failed to do so, the FATF would consider calling on member states to strengthen countermeasures at its June 2016 meeting. IMPLICATIONS FOR BANKS For foreign financial institutions considering renewed ties with Iranian banks, the FATF’s continuing designation of Iran as a high-risk jurisdiction and repeated call for countermeasures have real implications in terms of both illicit finance and regulatory risk. Relevant FATF standards, now being followed by member states in their fourth round of mutual evaluations, call on regulators to require banks to engage in enhanced due diligence when dealing with high-risk jurisdictions. These are time- and resource-intensive measures against which banks can be examined for compliance. Such measures can include obtaining additional information on the customer, beneficial owner, nature of the business relationship, and source or use of funds. Although designed to mitigate the risk to financial institutions of unwittingly processing illicit transactions, even such measures may not be sufficient for financial institutions when it comes to Iranian banks, which, according to the U.S. Department of Treasury, “willingly engage in deceptive practices to disguise illicit conduct.” FATF standards also provide a range of risk-mitigating countermeasures regulators can pursue beyond enhanced due diligence, such as imposing additional reporting requirements for banks working with high-risk jurisdictions, prohibiting financial institutions from relying on third parties located in the concerned country to conduct elements of customer due diligence, and even limiting business relationships or financial transactions with an identified country. In fact, the FATF call for countermeasures on Iran is referenced in the “findings” of Section 104 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) — the statutory basis for U.S. secondary sanctions on Iran. Although more than four hundred Iranian actors received relief from secondary sanctions as part of the nuclear deal through removal from U.S. sanctions lists, more than two hundred, including significant Iranian economic entities such as the Islamic Revolutionary Guard Corps (IRGC), remain listed and subject to secondary sanctions. The legislation, which first called for foreign financial institutions engaging in significant transactions with designated Iranian actors to be cut off from the U.S. financial system, cites the February 2010 meeting, at which the FATF urged member states to apply countermeasures to “protect the international financial system from the ongoing and substantial money laundering and terrorist financing risks emanating from Iran.” That language remains in the current FATF statement, even after implementation of the Iran deal. The new FATF statement — which continued to press member states to “protect against correspondent relationships being used to bypass or evade counter-measures and risk-mitigation practices” — came only days after the Society for Worldwide Interbank Financial Telecommunication (SWIFT) confirmed Iranian banks had been reconnected to the secure financial-messaging platform after having been cut off by EU sanctions in March 2012. Even with messaging services restored, however, the FATF’s identification of Iran as a high-risk jurisdiction subject to FATF countermeasures will continue to complicate efforts by Iranian banks to reestablish ties upon which the majority of SWIFT messaging is predicated — those with correspondents. Although Iran has been given access to roughly $100 billion of its previously restricted funds held overseas, Iranian banks — in order to use these funds to make purchases and otherwise engage in international trade — will have to reestablish correspondent relationships with banks in countries that are key trading partners. Banks’ foreign correspondents hold deposits in foreign currencies and act as a nonresident bank’s agent confirming letters of credit and completing other financial transactions on the correspondent’s behalf. Beyond the enhanced due diligence discussed above, the FATF recommendation related to correspondent banking calls on regulators to require banks, at the least, to gather sufficient information to assess the quality of the correspondent institution’s AML/CFT controls and the quality of its supervision — an area where Iranian banks remain deficient. NEXT STEPS In its December 2015 Article IV report — part of a running assessment of a country’s economic and financial policies and developments — the International Monetary Fund recommended to Iran that “bolstering the AML/CFT framework would facilitate re-integration of the domestic financial system into the global economy, lower transaction costs, and reduce the size of the informal sector.” Iranian officials, including Central Bank administrators and the country’s executive director at the IMF, have acknowledged weaknesses in the Iranian banking system that could inhibit renewed foreign engagement and investment — saying that Iranian banks are “outdated” and face a legacy of “weak risk management and inadequate supervision.” Iranian regulators have taken limited steps over the past decade to improve their AML/CFT controls. In the FATF’s October 2008 statement, it credited Iran for adopting an Anti-Money Laundering Law, which was approved by the Majlis in January 2008, but noted the “lack of corresponding effort on CFT.” A 2012 draft CFT law that was approved by the parliament but remained pending with the Iranian judiciary did not meet international standards, according to the IMF. The IMF’s December report specifically urged Iranian authorities to adopt a law that properly criminalized terrorist financing and contained mechanisms for implementation of UN terrorism sanctions. Recent Iranian official statements have committed to bolstering the AML/CFT regime, including by joining the Eurasian Group, an effective FATF subentity based in Moscow, and requesting an IMF assessment of its AML/CFT regime against FATF standards. These are the correct first steps for Iran in working with the FATF to improve its AML/CFT status. But it will be a long process, and there is little indication real work has begun. Despite confirmation by the FATF’s executive secretary to Agence France-Presse following the February plenary that Iran has “shown a willingness” to start cooperating, the recent statement did not acknowledge Iranian efforts to engage with the group as it has done in the past (February 2010). What this all means is that sanctions relief and SWIFT readmission notwithstanding, significant impediments remain for those banks looking to reestablish financial ties with Iran. At a minimum, banks will continue to face illicit-finance and regulatory risks — both conditions of Iran’s own making. Katherine Bauer is a senior fellow at The Washington Institute and a former official at the U.S. Treasury Department. Originally Posted on February 29, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/march/2/iran-s-long-road-to-reintegrating-with-the-world-financial-system/ http://everythingshale.com/news/2016/march/2/iran-s-long-road-to-reintegrating-with-the-world-financial-system/ Wed, 02 March 2016 09:00:59 http://everythingshale.com/news/2016/march/2/market-currents-ten-points-to-consider-in-the-oil-market-today/ 1) The positive momentum seen in the oil market in recent days has been curbed by last night's API report, which showed the biggest build to crude stocks in 11 months. Not only were total inventories a growlingly bearish number (of +9.9 million barrels), but Cushing inventories were said to have increased by a mammoth 1.8 million barrels. If a similar number is seen from the EIA report, it will propel stocks at the pipeline crossroads of the world to over 90% full. 2) If you wanted to find a bullish lining to this bearish report, gasoline inventories drew by 2.2 mn bpd as the impending peak of refinery maintenance season in the coming weeks means falling gasoline production, while gasoline demand continues to look robust. We should see a similar stance from the EIA report today: decent builds for oil and distillates, a decent draw to gasoline stocks. 3) The crude build this week makes sense from a ClipperData perspective, as we saw PADD 3 imports tick higher last week. While we only saw 1 VLCC arrive from the Arab Gulf after a deluge seen earlier in February, there still remains a backlog of floating storage offshore in the US Gulf. As of yesterday, there is over 10 million barrels of Arab Gulf crude waiting to discharge which accounts for about a third of the total volume waiting. 4) While US oil inventories push north of 500 million barrels, oil inventories on a global basis are pushing to a new record high. As the chart below illustrates , global inventories are already at a record 3 billion barrels. The IEA still sees a net stock build this year and next, while the EIA is of a similar view . It expects global oil inventories to rise by ~1 mn bpd this year, and by an additional 0.3 mn bpd in 2017. 5) Just as the API report steals the thunder from the EIA data, the ADP employment report attempts to do a similar thing to Nonfarm Friday's official unemployment data. This morning's ADP report showed 214,000 jobs were created last month, more than the consensus of 190,000. Friday's report has a similar consensus of job creation, while the unemployment rate is expected to hold at the multi-year low of 4.9%. 6) The latest 8-to-14 day forecast from NOAA points a balmy end to a warm winter ( viva the woolly worm !), set to stymie late-winter heating demand. As storage levels sit nearly 30% above the five-year average, and as the latest monthly data show natural gas production at its highest level since records began in 1973, it is no surprise that natural gas is testing levels not seen since last century (March 1999 is so last century). 7) I remember writing a few years ago about how natural gas and retail gasoline prices had converged. The same thing has happened again, except this time around prices are about half of what they were back then. As natural gas plunders to new multi-decade lows, and retail gasoline prices begin their seasonal pre-driving season ascent, 1000 cubic feet of natural gas is cheaper than a gallon of gasoline. 8) We highlighted last week  that we are not seeing materially higher Iranian oil exports showing up in our ClipperData , and this point has been affirmed by Mohsen Ghamsari, who is the director of international affairs at the National Iranian Oil Company. He has said that crude exports have been complicated  by issues surrounding ship insurance, payments and financing, but that ‘ for March, definitely our volumes are going to be higher than February … but it depends on the logistics situation and the banking channels ‘. We shall avidly watch our data, and wait and see. 9) We mentioned on Monday how US oil and gas companies are issuing equity to raise cash. This number is now up to $9.2 billion so far this year, which is the most year-to-date since 1999 . 10) King Kong premiered in New York 83 years ago today. http://everythingshale.com/news/2016/march/2/market-currents-ten-points-to-consider-in-the-oil-market-today/ http://everythingshale.com/news/2016/march/2/market-currents-ten-points-to-consider-in-the-oil-market-today/ Wed, 02 March 2016 08:52:03 http://everythingshale.com/news/2016/march/2/rbob-futures-steps-on-the-gas-in-ushering-in-march/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices Bullish seasonal features are now the driving force in the US gasoline market, and speculators have already positioned for the price advance off February lows, with those lows likely to endure for several weeks. Considering the calendar, the lows plumbed in February might very well persist through 2016 and the futures contract might have established a long-term low on the spot continuous chart at $0.8975 gallon. March RBOB futures on the New York Mercantile Exchange expired at a $0.2985 gallon discount to April delivery, with the April contract gapping higher on the spot continuous chart on the first day of March and settling at $1.3035 gallon. The massive contango between March and April delivery that reached $0.3053 gallon on Feb. 26—the widest spread between first and second month delivery in 10 years, reflects the transition to lower Reid vapor pressure gasoline and expectations for greater driving demand as the weather warms. The steep discount by the now expired March contract also accentuates the still prevailing bearish fundamentals that have converged with the well-known trend for gasoline prices to move higher from winter to spring. In their Feb. 26 Commitment of Traders report, the Commodity Futures Trading Commission showed noncommercial market participants or speculators expanded a net-long stance—a position taken on expectations for prices to increase from current levels—to a 22-month high during the week-ended Feb. 23. The bullish stance came with record open interest which shows greater commitment by the market, with open interest for the RBOB contract increasing every week in 2016. The gasoline market is not immune to the bearish fundamentals of crude oil, with the global market still captured by massive oversupply that is expected to continue building through much of the year, although at a slower pace during the second half of 2016. A market rebalancing is not expected until 2017. West Texas Intermediate, the US benchmark for crude oil, edged higher at the front end of the forward curve through February in futures trading on NYMEX, and began March in a technical short-term uptrend with the monthly chart showing the long-term trend has turned up. WTI could again find itself under heavy selling pressure in April when seasonal turnarounds at US refineries dampen demand for crude oil that would also weigh on gasoline values. U.S. commercial crude oil inventory is over 500 million bbl, the most since 1930, and storage space has tightened globally. Gasoline inventory is high too, 6.9% above year ago in mid-February and 11.1% more than the five-year average, data from the Energy Information Administration shows. Low retail prices are again seen billowing demand, with year-on-year growth in US gasoline demand in 2015 at 236,250 bpd or 2.7%—the largest annual increase in domestic gasoline demand since 2002, monthly data released late February by the EIA shows. Preliminary data for 2016 from the EIA shows strong demand continued during the first several weeks of the year, up 222,000 bpd or 2.5% versus the comparable timeframe in 2015. During the week-ended Feb. 19, gasoline supplied to the primary wholesale market spiked to a 9.576 million bpd six-month high, placing the weekly demand rate at summertime highs. EIA’s national average for regular grade gasoline sold at retail outlets moved higher during the last couple of weeks in February after seven consecutive weeks with a decline, ending the month at $1.783 gallon. On Feb. 15, it fell to a $1.724 gallon seven-year low. Although retail gasoline prices are poised to snap higher, they will remain heavily discounted against pump prices for most of the past decade. A low gasoline price in and of itself will boost demand, although vehicle efficiency improvements will cap the upside, with EIA projecting a conservative 70,000 bpd boost in annual demand this year to 9.23 million bpd and no growth in 2017. If realized, that would be a near match with record US gasoline demand achieved in 2007 at 9.286 million bpd, which edged out the 2006 demand rate of 9.253 million bpd. To learn more about Schneider Electric’s Oil & Gas offerings for the downstream market, click here: http://www.schneider-electric.us/en/services/cloud/oil-and-gas/ The post RBOB Futures Steps on the Gas in Ushering in March appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/march/2/rbob-futures-steps-on-the-gas-in-ushering-in-march/ http://everythingshale.com/news/2016/march/2/rbob-futures-steps-on-the-gas-in-ushering-in-march/ Wed, 02 March 2016 07:59:28 http://everythingshale.com/news/2016/march/01/what-will-be-the-golden-ruling-on-london-s-bullion-market/ London’s streets were rumored to be paved with gold, once upon a time. Now they seem to be paved with chit-chat and hearsay regarding the future of the City’s bullion trade. Now, not to repeat myself, but the London bullion market is currently in a state of transition. To what, exactly, is anyone’s guess. Over-the-counter to exchange, maybe, if the London Metal Exchange can get its hands on it. Disclaimer: all of this is basis analysis of high-level conversations with senior market participants. Nothing is yet publicly known and no parties mentioned in this blog will comment. Paranoia, maybe. Non-disclosure agreements, most certainly. So, the London Bullion Market Association ‘request for proposal’ rattles on. Most have little time to give to the process, as they have businesses to run. The five parties rumored to be in the final beauty parade are: CME Group, the LME, IntercontinentalExchange, Autilla/Cinnobar and Markit/ABS. No comments all round. As such, chatter prevails. Here are the most recent musings: The LME is aggressively gunning for the London market. “At any cost,” according to one senior source. The LBMA needs to keep London relevant. A deal with the LME — which is owned by Hong Kong Exchanges and Clearing — would mean a direct link to the Chinese market, the world’s number one gold consumer. Then there’s CME. At the moment it faces a slight uphill battle, owing to some reputational damage linked to recent hiccups related to the LBMA Silver Price  (operated and administrated by CME and Thomson Reuters). However, CME operates the world’s largest gold exchange by volume. One source said the market will gravitate to where the largest pool of liquidity is, that being COMEX. However, a banker said he would see a CME win as a step backward, rather than forward. “The Chinese are buying the gold; why would London want the US to dominate the space?” he said. Still, it is worth noting that CME does have exposure to Asian markets. In late 2014 the Shanghai Gold Exchange and CME signed a memorandum of understanding to “positively explore possibilities of cooperation between the domestic and international markets.” Also, CME launched a physically delivered Gold Kilo futures contract in Hong Kong in early 2015. The result of the RFP should create a platform that creates future growth for the London market. “[The] LBMA intends for the new services to be able to support the introduction of future services — for example over-the-counter clearing — subject to the appropriate market regulatory conditions and LBMA membership demand,” the industry body said on its website. In a recent interview with Platts, LBMA CEO Ruth Crowell suggested any solution could come about from various partnerships of the entities involved. Still, one source shrugged that off entirely. “Do you really believe anyone in the rumored list would want to work with the next one?” he said. There still seems to be a strong belief that the LME’s determination to run the London gold market keeps it in the number one slot to win the bid. The LBMA would own the intellectual property of any successful RFP candidate’s technology platform. LME Clear is already set up and approved to clear precious metals. The exchange included precious metals in its requests for regulatory approvals when it set up the clearing house. One banker said that “LME are set up for their own thing. But we still want the LBMA to ask the members what we want before being lumped with a choice from the good, the bad and the ugly again.” ICE, ABS and Autilla also have support. But their voices seem to being washed aside by the banging of the LME drum. One trader thinks that of all the candidates, ABS has the best understanding of the market. There was also growing support for Autilla’s technology. “Autilla has the best platform as it was built by traders for traders who knew what the real needs are. ABS is not a bad shout, too, but I think [the fact they are] based in Asia may cause some issues,” said a banker. ABS and Autilla are both technology companies, and not exchanges like the other three candidates. Then there is the fear of fragmentation, possibly the worst signal London could send to the world. “I don’t really see the RFP leading to a cohesive solution unless they [the LBMA] give it all to one player,” said one source. Let us not forget, Dick Whittington found when he went to London that the streets were in fact grimy and poverty-stricken (according to Wikipedia at least). Let’s hope that’s not the case and the London bullion market continues to shine. To be continued. http://everythingshale.com/news/2016/march/01/what-will-be-the-golden-ruling-on-london-s-bullion-market/ http://everythingshale.com/news/2016/march/01/what-will-be-the-golden-ruling-on-london-s-bullion-market/ Tue, 01 March 2016 23:01:24 http://everythingshale.com/news/2016/march/01/energy-department-recognizes-orlando-better-buildings-challenge-partners-for-energy-efficiency-upgrades/ ORLANDO, Fla. As part of the Obama Administration's efforts to cut energy waste in the nation's buildings, the U.S. Department of Energy (DOE) today recognized the city of Orlando and Parkway Properties for their leadership in improving energy efficiency across a combined 20 million square feet of building space by 20 percent within 10 years. Through the department's Better Buildings Challenge, Orlando-based Parkway Properties' showcase project, office tower One Orlando Centre, is expected to save nearly 18 percent in energy costs and over 1.7 million gallons of water through energy and water efficiency efforts. The work being done in communities like Orlando is essential to our long-term goal of reducing the energy bills of our nation's commercial and industrial buildings,†said Maria T. Vargas, director of the Better Buildings Challenge. I am also impressed and energized by the level of commitment and collaboration among our private sector partners in Florida, such as Parkway Properties.†The department toured the extensive renovations of One Orlando Centre, a 19-story, 355,000 square foot office building in downtown Orlando originally built in 1987. After improving heating and cooling systems and reducing energy and water consumption, the newly refurbished building has quickly saved Parkway Properties over $75,000 in energy and water costs annually. One Orlando Centre has seen significant annual energy and water savings of close to 18 percent, with projections for even deeper energy and water performance improvements in 2016. Its efficiency measures included replacing aging chillers with high-efficiency ones, adding window glazing to reduce heat loads and installing new state-of-the-art cooling towers that have generated over 1.7 million gallons of water savings within the first year of operation. Taking on the extensive renovations at One Orlando Centre has not only resulted in high-quality improvements for our tenants in a top-tier market, it helps us meet our own aggressive sustainability targets,†said Bruce Hall, director of engineering for Parkway Properties. Our commitment to the sustainability has motivated our teams to tap into the Department of Energy's incredible resources, on everything from plug loads to education and outreach programs.†The city of Orlando has made a commitment to reduce its energy intensity by 20 percent within 10 years, with a total commitment of 6.8 million square feet. As part of the Better Buildings Challenge, Orlando is undergoing $17.5 million of energy efficiency upgrades to 56 municipal facilities, including lighting upgrades, heating and cooling renovations, building automation and controls and other cost-effective energy conservation measures. In partnership with the local municipal utility, the city will also work to replace streetlights with new LED technologies. “The energy efficiency upgrades we are planning for our city will transform Orlando into one of the most environmentally, economically and socially vibrant communities in the nation,” said Orlando Mayor Buddy Dyer. “Through this work and our partnership in the Better Buildings Challenge, we are realizing significant energy bill savings, improved maintenance costs and more local jobs, all while using revolving cost savings to fund future projects.” As a cornerstone of the President’s Climate Action Plan, the Better Buildings Challenge is aimed at achieving the goal of doubling American energy productivity by 2030 while motivating corporate and public-sector leaders across the country to save energy through commitments and investments. More than 285 organizations are partnering with the department to achieve 20 percent portfolio-wide energy savings and share successful strategies that maximize efficiency over the next decade. Across the country, partners have shared energy data for more than 32,000 properties and are reporting energy savings of 20 percent or more at 4,500 properties, and 10 percent or more at 12,000 properties. Learn more about Better Buildings Challenge partner results, showcase projects and innovative solutions being shared with others at  http://betterbuildingssolutioncenter.energy.gov . http://everythingshale.com/news/2016/march/01/energy-department-recognizes-orlando-better-buildings-challenge-partners-for-energy-efficiency-upgrades/ http://everythingshale.com/news/2016/march/01/energy-department-recognizes-orlando-better-buildings-challenge-partners-for-energy-efficiency-upgrades/ Tue, 01 March 2016 16:00:17 http://everythingshale.com/news/2016/march/01/ruffalo-and-dicaprio-host-anti-fracking-field-trip-for-the-one-percent-vanity-fair-swoons/ Vanity Fair magazine has built its reputation covering celebrity culture, with recent trending articles featuring topics like Jennifer Garner and Ben Affleck’s divorce and Kanye West’s debt. It shouldn’t come as a surprise, therefore, that a new article by the magazine’s Senior Hollywood writer Julie Miller – entitled “Mark Ruffalo Calls Out Governor Jerry Brown Over L.A.’s Urban Fracking” – doesn’t meet the highest standards of scientific rigor. However, even celebrity culture magazines should scrupulously adhere to journalistic standards, meaning they  should, as the Society of Professional Journalists Code of Ethics admonishes , “take responsibility for the accuracy of their work.” The current Vanity Fair article fawns over two Academy Award nominees (and one winner) who brought other famous actors and reporters on a tour Los Angeles’s oil fields to pontificate, on the record, about “urban fracking.” As Vanity Fair wrote: “There are two Oscar-nominated actors this year who have worked tirelessly as environmental activists offscreen— Mark Ruffalo and Leonardo DiCaprio. And on Thursday, four days before the Academy Awards, the brothers-in-eco-arms pulled focus to L.A.’s dangerous practice of urban fracking by embarking on a ‘toxic tour’ of all of the drilling sites in Los Angeles proper.” The excessive use of adjectives is troubling from a magazine that should strive for a minimum standard of objectivity. Our heroes work “tirelessly”! Fracking is “dangerous”! One might suggest that the author wrote “breathlessly.” Unfortunately, Mr. Ruffalo and Mr. DiCaprio have as much scientific credibility as the Incredible Hulk himself. The claims of these “brothers in eco-arms,” which Vanity Fair didn’t think to question, are blatantly false. (This is not the first time DiCaprio has been found to have a casual relationship with the truth this week .) First, the headline of the article contains a factual error: there is no fracking happening in Los Angeles at all. Second, there is an overwhelming scientific consensus that fracking is fundamentally safe with manageable risks. Source: Mark Ruffalo in Vanity Fair   Ruffalo, in one of his “greener” moments   Leonardo DiCaprio. Source: PopSugar.com   DiCaprio, practicing what he preaches on his 450-ft. yacht   The author could have easily fact-checked these celebrities’ claims with a few calls to environmental regulators, scientists or even experts in the industry responsible for complying with the strictest environmental regulations in the country. Even a Google search would have turned up more facts than the misinformation that Vanity Fair was given and which it repeated uncritically. It is as if this celebrity culture magazine – when listening to major movie stars! – decided to forgo the formalities of journalism and instead took a page from the new movie Zoolander 2. When male models Derek Zoolander and Hansel (Ben Stiller and Owen Wilson, respectively) are debating whether to collaborate with Interpol agent Valentina, played by Penelope Cruz, Hansel says: “She’s hot, I trust her.” Mr. Ruffalo and Mr. DiCaprio are handsome fellows to be sure, and they deserve their accolades for acting, but this doesn’t mean that Vanity Fair should abdicate its responsibility to verify the actors’ claims in an area far removed from their professional expertise. Fact: Climate Leaders Frack Among the risible claims that the celebrity activists fed to Vanity Fair , the most incredible may be that Governor Jerry Brown – one of the nation’s most celebrated environmentalists and climate change champions – is insufficiently committed to his goals. According to Mr. Ruffalo : “This governor is adding 300 new wells a month to California’s drilling. He is the most drilling-friendly governor in the United States at this moment. . . . If Governor Brown is going to walk around saying that he is a climate-change hero, then by God, we are going to hold him to his word.” As we will explain below, it is actually Mr. Ruffalo’s recommendation that would lead to higher greenhouse gas emissions: it is precisely because of fracking and the shale revolution that the world – led by the United States – is experiencing sharp declines in these emissions. Is it just possible that the Governor, a passionate environmentalist, knows this? After all, even the Vanity Fair article notes : “In December, the governor joined world leaders at the U.N.’s Paris climate-change summit, where he was heralded as an eco advocate, at one point telling French graduate students , “We have to be able to imagine the horrors that might unfold, and then take steps to prevent it.” The summer before, Brown called upon Republicans to detail their plans to address climate change .” This sounds like climate leadership to us. To apply Occam’s Razor and common sense: is it more likely that the Governor has ceased being the environmental activist he has been since Mr. Ruffalo was in Elementary School, or that Mr. Ruffalo, who admits to first hearing of the 60-plus year-old process of fracking only six years ago, is the one getting bad information from documentary filmmakers and thoroughly   discredited academics? (Recently, one of Mr. Ruffalo’s favorite academic/activists, Anthony Ingraffea, admitted under oath that he is not an objective scientist and that he has no direct experience with fracking or related processes.) No fracking in Los Angeles Putting aside the claim that Governor Brown is somehow in bed with the energy industry, the simple fact is that there is no fracking happening in Los Angeles . None. So much for the story’s reason for existing. The last time a well in Los Angeles was fractured was in 2012, and that was not for oil production but for a court-ordered study on the safety fracking at the Inglewood Oil Field, the same oil field Miller and her celebrity “guides” visited. The study was peer reviewed by an independent third party selected by Los Angeles County. Two wells were fractured to comply with this study, and across 13 different potential areas of impact – air pollution, water contamination, seismicity, subsidence, etc. – not one was found to be problematic for the citizens living in proximity to the oil field. (It should be noted, as the article may have confused some readers, according to Baker Hughes, there are only six wells being drilled in the entire state of California – the nation’s third largest energy producing state – and none of those are in Los Angeles.) So, no fracking, no story. Fundamentally safe, highly regulated This brings us to the anti-industry claim, dutifully repeated by Vanity Fair , that fracking is “dangerous.” “The intense means of extraction, known as fracking, is believed to induce earthquakes, compound global warming , pollute the environment, and to have wasted water during California’s most recent drought, the worst in 1,200 years .” “Intense.” Earthquakes. Global warming. Pollution. Water waste/drought. There is a great deal of misinformation packed into this single sentence. Let’s examine each claim: “Dangerous” and “intense”: While pumping water at high pressure may sound “intense” to Vanity Fair , fracking is a routine well-completion technique, which only takes a day or two and can allow a well to produce oil or gas for many decades. It has been such an ordinary and unremarkable part of the energy development process that many jurisdictions like California regulated fracking as part of its mandate to regulate oil and gas but did not single-it out for special punitive treatment. That occurred only after an activist misinformation campaign led to the passage of SB 4 , which, according to the Los Angeles Times are the nation’s toughest fracking regulations. The claim that fracking is “dangerous” is contradicted by more than 60 years of experience in which more than 1.2 million wells have been hydraulically fractured without the adverse impacts claimed by activists like Ruffalo and DiCaprio and their enablers in the media. Scientists including those at the independent California Council on Science and Technology (CCST), environmental regulators , as well as elected officials – many of them Democrats — and the Obama Administration all confirm the fundamental safety of the hydraulic fracturing process. Earthquakes: Scientists and regulators – including John Parrish, California’s State Geologist —  have have confirmed that fracking has not been linked to earthquakes in California nor, except in extremely rare instances, elsewhere in the country. The injection of produced water into Class II injection wells has been linked to some seismic activity, but water is produced and injected in the energy development process regardless of whether fracking occurs. The reason was made clear by leading geophysicist and Obama Administration advisor Mark Zoback of Stanford University in testimony before the Unites States Senate: “[E]xtremely small microseismic events occur during hydraulic fracturing operations. These microseismic events affect a very small volume of rock and release, on average, about the same amount of energy as a gallon of milk falling off a kitchen counter .” [emphasis added] Global Warming: As EID has highlighted before , activists like Ruffalo and DiCaprio claim to be fighting climate change when they are opposing fracking.  Meanwhile, EPA Administrator Gina McCarthy – who, unlike our Oscar-nominated/winning friends, has scientific credentials —   called fracking for natural gas a “game changer” and “enormously beneficial” in the fight to combat climate change. The sharp reductions in both CO2 and methane emissions as shale development has expanded are extraordinary: The fact is, then, that domestic production lowers emissions. Not only would producing less oil in Los Angeles, and in California generally, hurt everyday consumers of petroleum products, but it would have negative environmental consequences as well. As previously noted, California, and Los Angeles in particular, has the strictest regulations on oil and gas production anywhere in the United States and perhaps the world. As Governor Brown has noted : “California imports 70 percent of our petroleum products; our cars drive over 330 billion miles mostly on petroleum.  If we reduce our oil drilling on California, which a ban on fracking would do, we’ll import more oil by train or by boat, that doesn’t make a lot of sense.” That’s right: even as the third largest energy producing state, California uses so much petroleum that we import – by ship and rail — more than half of what we use from countries with laxer environmental regulations. This increases the carbon footprint of our energy economy. The fight against fracking, then, is a fight against a technology that has allowed the U.S. to be a global leader in the reduction greenhouse gas emissions, something environmentalists truly concerned about climate change should cheer and not oppose as a matter of anti-industry ideology. Pollution: Again, the scientific studies on this issue directly refute the activists’ talking points. Studies that have directly examined the impact of oil production on air pollution in Los Angeles have confirmed that oil production does not pose a significant threat to air quality for those living near oil production operations. Most recently, a July 2015 study by the CCST found that less than one percent of pollutants and contaminants in relevant areas stem from oil exploration or production activity. From the report: “In the South Coast air district (including all of Orange County, the non-desert regions of Los Angeles and Los Angeles County, San Bernardino County, and Riverside County), upstream oil and gas sources represent small proportions (<1%) of criteria air pollutant and toxic air contaminant emissions due to large quantities of emissions from other sources in a highly urbanized area.” Energy development is regulated by a tapestry of agencies (nearly 20 in Los Angeles), including the South Coast Air Quality Management District (AQMD). Urban oilfields are regularly inspected by the AQMD. One of the sites visited by the celebrity activists was inspected close to 20 times in one year with no significant issues found. The Environmental Protection Agency (EPA) also did a multi-day inspection on another of the sites they visited and confirmed no pollution issues existed. The County of Los Angeles routinely does health assessments at the Inglewood Oil Field, and regularly confirms that there are no elevated illness rates, contrary to celebrity claims. Not only are oil production facilities in Los Angeles are well within regional air quality standards, but ground-level ozone is decreasing, which is something all of us who live in Los Angeles (unlike some of the celebrity activists featured by Vanity Fair) should celebrate. From an EPA air monitoring station in Los Angeles: Oil production in Los Angeles, then, is not a significant source of air pollutants (though of course the ideal amount of pollution is zero). Because it serves their anti-fracking agenda, the celebrity activists simply ignore the 99+ percent of pollutants and contaminants from sources other than energy development. It is a shame Vanity Fair let them get away with it. It is interesting that in her adjective-laden introduction, the author of the Vanity Fair article described the soccer field across from the Inglewood Oil Field as “poignant,” as if to evoke a dystopian wasteland. It is actually quite bucolic in and of itself and, more relevantly, trails and parks around the oilfield serve as training sites for Olympic-level athletes. This is not something that would happen if there were air quality concerns. Baldwin Hills Scenic Overlook. Source: http://art-chitecturelosangeles.blogspot.com/   Kenneth Hahn State Recreation Area. Source: County of Los Angeles   Water Use: Vanity Fair repeats the activist claim that oil production “wastes” water when in fact oil production is a major water  producer. This is why flowback water used in production – conventional and unconventional – is called “produced water.” It is water that is new to the water cycle. According to the California Department of Conversation ( DOC ), the production of a barrel of oil results in the production of an average of 15 barrels of water. This water is salty or brackish and has been buried for millions of years along with oil or gas. After the oil or gas is extracted from the water, it can then be put to a variety of productive uses, including reinjection (of this treated, cleaner water) to stabilize pressure, or to help in advanced oil recovery operations in the form of steam. It is important to highlight a special use of this water given the historic drought that we are experiencing: produced water can sometimes be made clean enough that it can be used by California’s agriculture industry for crop irrigation, helping farmers though the drought and helping the industry to produce food and fiber that feeds the world and keeps another important California industry afloat. This successful program has existed for more than 20 years, but the drought makes it even more critical. Last year, Kern County energy producers provided more than 10 billion gallons of water (31,658 acre feet) to their agriculture industry neighbors.   This is a beneficial use of “produced” water – water that does not impact the drought negatively because it was never in the water supply. This is a win-win for everyone, right? Yes, except for certain New York-based celebrities. It turns out that one of the most vocal critics of Kern County’s long-standing and successful irrigation program is none other than Mark Ruffalo . Water use in Fracking: It should be quickly noted that while there is no fracking in Los Angeles, activists frequently cite fracking as a water-intensive process. In fact, according to the California Department of Conservation’s Division of Oil, Gas and Geothermal Resources ( DOGGR ), all of the hydraulic fracturing in the state last year used 214-acre feet of water, equivalent to the amount of water that just one of California’s 1,100 golf courses uses in a year. (Remember that industry in Kern County also produces 3 1,000 acre-feet that is put to productive use by the agriculture industry.) As environmental reporter Chris Clarke  wrote : “The water used for fracking in 2014 is just .00069 percent of California’s total water consumption . Or put another way: If all the water used by California society in 2014 was represented by a bank account totaling $10,000, the amount we spent on fracking last year was just under seven cents. Puts those 214 acre-feet in perspective, no?” Conclusion: The consequences of misinformation If this were simply a matter of professional entertainers taking time away from private planes and their mega-yachts to lecture their fans – and the magazines that sell to them – about a process they don’t really understand, nobody would care.  However, the impact of shutting down oil production — one of the backbones of the Los Angeles economy for a century – would be to increase gasoline prices on hardworking Angelinos (something even billionaire anti-industry activist Tom Steyer doesn’t want to see happen) and, as noted above, make greenhouse gas emissions higher, not lower. It takes a special kind of audacity to use bad information to mislead fellow one-percenters, thousands of fans and Hollywood journalists when the outcome of this misinformation campaign is to exacerbate climate change. Celebrity activists should encourage domestic production, especially in California, as a means to reduce greenhouse gas emissions even as they promote renewable energy and additional climate solutions. And, of course, when we buy oil from other, often unfriendly regimes, all of the jobs, government revenue and economic activity that could be putting Californians to work and funding our school and building our roads goes to line the pockets of governments that often fund activity that puts Americans in harms way. Everybody in the Southland would be hit hard by rising gas prices (prices that are already among the highest in the country because of uniquely stringent state regulation) and it is important to remember that the industry is also a major employer, with most jobs, which afford excellent wages and benefits, held my ethnic minorities.  The spectacle of  actors actively trying to take away these high-quality jobs from those who need them is not a good look. Unfortunately for the well-meaning one-percenters who attended Ruffalo and DiCaprio’s field trip, and for the readers of Vanity Fair who were misinformed by the magazine’s gushing coverage, Governor Brown (D-CA) remains correct : anti-fracking activists “don’t know what they hell they’re talking about.” And this is good news for both our economy and our environment. http://everythingshale.com/news/2016/march/01/ruffalo-and-dicaprio-host-anti-fracking-field-trip-for-the-one-percent-vanity-fair-swoons/ http://everythingshale.com/news/2016/march/01/ruffalo-and-dicaprio-host-anti-fracking-field-trip-for-the-one-percent-vanity-fair-swoons/ Tue, 01 March 2016 13:40:32 http://everythingshale.com/news/2016/march/01/drillinginfo-ceo-allen-gilmer-tapped-to-lead-tipro/ Drillinginfo CEO Allen Gilmer has been elected Chairman of the Board of the Texas Independent Producers & Royalty Owners Association (TIPRO). The TIPRO membership selected Gilmer on Tuesday, February 23, 2016 during its annual convention in San Antonio. Gilmer’s two-year term formally begins on June 30, 2016. He will chair TIPRO as it celebrates its 70th anniversary as the leading voice of independent producers and royalty owners in Texas. He succeeds Raymond J. Welder, III, who is President & CEO of Welder Exploration & Production, Inc. Gilmer noted the importance of TIPRO as the global oil & gas industry rebalances supply and demand. “In these kinds of times, people are trying to figure out how to stay alive with very little money available across the board,” Gilmer said. “I can’t tell you how many people that I know from multi-generational oil companies that are saying that they’re right at the limits of what their lease operating expenses are. These are people who have dedicated generations of their family’s time to the oil and gas industry, and we have to make sure that they can survive for the next generation.” TIPRO was founded in 1946 to preserve the ability of independent oil and gas companies to explore for and produce oil and natural gas. Independent oil and gas companies generally receive most of its revenues from production at the oil and gas wellhead. These companies are often exclusively in the exploration and production segment of the hydrocarbon industry and do not own mid-stream pipeline companies or downstream refineries. TIPRO currently has more than 3,000 member companies and individuals. Members join at the individual, executive and explorer levels and receive benefits such as regular updates on critical oil & gas issues, access to exclusive association meetings, and business networking opportunities. TIPRO successfully advocates for effective public policy at the state and federal level that encourages responsible hydrocarbon exploration and production. TIPRO is credited with helping Texas create among the most balanced and efficient oil & gas regulatory systems in the world. TIPRO anticipates significant activity at the federal level during the next several years. Specifically, TIPRO will vigorously defend access to capital & tax provisions such as proper treatment of Intangible Drilling Costs (IDCs), Depletion Allowance, Geologic and Geophysical Deduction, Section 199 Tax Deduction, Marginal Well Tax Credits, and the Enhanced Oil Recovery (EOR) Tax Credit. http://everythingshale.com/news/2016/march/01/drillinginfo-ceo-allen-gilmer-tapped-to-lead-tipro/ http://everythingshale.com/news/2016/march/01/drillinginfo-ceo-allen-gilmer-tapped-to-lead-tipro/ Tue, 01 March 2016 13:00:38 http://everythingshale.com/news/2016/march/01/time-for-action-on-the-broken-rfs/ When Congress and the president acted late last year to end the decades-old ban on domestic crude oil exports , Washington showed it could generate the consensus to update energy policy so it matches America's new energy reality, a reality of abundance created by surging domestic oil production. The same kind of change is needed on the broken Renewable Fuel Standard (RFS). We saw how the crude oil exports ban buckled under the weight of economic research and reason, both of which argued that allowing U.S. oil to reach global markets would be good for America and American consumers. In the case of the RFS, there's a compelling opportunity to protect U.S. consumers from potential harm wrought by a bad public policy. Step No. 1 is a scheduled hearing this week on the RFS by the Senate Environment and Public Works Committee. Witnesses include EPA and U.S. Energy Information Administration officials. Frank Macchiarola, API group director of downstream and industry operations, discussed the stakes in the RFS debate during a conference call with reporters . The main point: The RFS is mismatched for the new era of U.S. energy abundance. Macchiarola: We continue to seek the repeal of or significant reforms to the RFS. Since the inception of the ethanol mandate a decade ago, the United States has undergone an energy transformation from a nation of energy dependence and scarcity to one of energy security and abundance. It is well past time to reform outdated energy policies to reflect the energy realities of today and tomorrow.†Macchiarola listed some of the strikes against the RFS, which Congress created during a time of U.S. energy scarcity: The impending ethanol blend wall†the point where RFS mandates for ethanol use force more of it into the national fuel supply than can be safely blended as E10 gasoline that is standard across the country. Breaching the blend wall could have impacts on consumers and the broader economy. A 2014 report by the nonpartisan Congressional Budget Office found the price of gasoline could increase by up to 26 cents per gallon, while a NERA study warned of a possible 30 percent reduction to the fuel supply, resulting in significant economic harm. Tests that showed higher ethanol-blend fuels like E15 could damage engines and fuel systems in millions of vehicles on U.S. roads today. Warnings from automakers that higher ethanol-blend fuels could void new car warranties. Concerns that corn ethanol mandates lead to higher greenhouse gas emissions . Macchiarola said despite all of the above, EPA continues to press ahead with implementing RFS ethanol mandates . The policy is outdated and broken, and Congress should take corrective action. Macchiarola: Simply stated, this is bad public policy that creates a potential harm to the American consumer.  And, it must be fixed. The American people agree.  U.S. consumers have already spoken with their wallets. They do not want these fuels.†The time for action on the RFS is now. In ending the crude oil export ban, Congress came to grips with the lack of policy justification for continuing it. Lawmakers should do the same with the RFS. Macchiarola: We have a situation where we've gone from (being) an importer of oil to the world's leading producer of oil and natural gas. We've gone from being an afterthought, frankly, a consumer of energy, to a mover of energy in the world. So our global strength in energy means that we really need to re-examine the public policies that are attached to that. And this is one of them. This is a big one.†By Mark Green Originally posted February 23 , 2016  Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/march/01/time-for-action-on-the-broken-rfs/ http://everythingshale.com/news/2016/march/01/time-for-action-on-the-broken-rfs/ Tue, 01 March 2016 13:00:29 http://everythingshale.com/news/2016/march/01/flex-a-new-approach-to-delivering-top-quality-automation-projects-on-time-and-on-budget/ When a company is building any kind of process plant they must respect three aspects: schedule, cost and quality. These elements form a sort of three-legged stool from the customer’s perspective and should any one of them fall short, the whole project is out of balance, perhaps dramatically so. Yet maintaining that delicate balance is no mean feat given all the various players and moving parts involved. You have engineers that each have their own piece of the puzzle to contend with, be it electrical, process, instrumentation or automation. Each has to follow a plan and a schedule while providing their respective design, devices or configurations that must work well together. What’s more, none of these folks really talk the same language, literally and figuratively. The speeds and feeds that may be of concern to the automation expert are likely quite different from the issues that concern the process engineers, and so on. On top of that, it’s quite likely these days that plant designs are coming from teams around the globe, so there’s also a traditional best practices barrier to contend with. This is the environment into which Schneider Electric has for years been implementing its control and safety solutions, which function as the brain and nervous system of a plant. To be successful at that job, accurate process data is required. It must be defined which equipment and devices are going into the plant and what they are expected to do. If it’s a valve, we need to know when it’s supposed to be open, for how long and what to do if anything should go wrong. If it’s a safety switch, we need to know what it refers to, what exactly should cause it to trip, and so on. To accomplish this, we essentially need to get inside the head of the process experts and translate what they tell us into language that can be understood by the process and safety system that will run the plant. Historically, it’s when it comes to assembling the different process parts that things tend to go awry and get off plan. If the data we need isn’t available on time, it could cause delays and, potentially, cost over-runs. The schedule gets squeezed, as the automation team will be trying to play catch-up at some point down the line. That is sure to have an affect on quality. Now that three-legged stool is starting to get off balance. To combat this all-too-common occurrence, the key is to turn to a flexible, lean execution program (FLEX) providing a framework to help automate control and safety configuration and testing processes, and ultimately take the automation off the project critical path. With FLEX, you can get started on projects with far less detailed information up front – basically just which equipment and type of devices will be used. You can link the data, even if incomplete, with templates and rules to get started on designing various parts of of the automation system.  Later on, once it’s available, FLEX automatically puts in the detailed parameters of the systems we’ll be controlling. Once the configuration is complete and validated, data can be returned to the design team, usually an Engineering, Procurement and Construction (EPC) firm, to produce the detailed documentation required to commission the plant. This is done automatically, with no need of any human supervision. Using FLEX, during a recent refinery project, we backfilled the data to generate 5,000 instrument loop drawings without a single error. With that kind of accuracy, and the ability to deal with data that we get late in the game, we think FLEX is something of a game-changer for process projects, one that will help companies deliver them on time, on budget and with expected quality. To learn more about this project execution program, download this available whitepaper today.   The post FLEX: A New Approach to Delivering Top Quality Automation Projects on Time and on Budget appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/march/01/flex-a-new-approach-to-delivering-top-quality-automation-projects-on-time-and-on-budget/ http://everythingshale.com/news/2016/march/01/flex-a-new-approach-to-delivering-top-quality-automation-projects-on-time-and-on-budget/ Tue, 01 March 2016 10:40:09 http://everythingshale.com/news/2016/march/01/who-funded-the-university-of-cincinnati-study-finding-no-water-contamination-from-fracking/ Ever since the results of a new University of Cincinnati’s groundwater study finding no contamination from hydraulic fracturing were announced at a town meeting several weeks ago, (see EID’s video of the results here ) many questions have been raised about the funding of the study. Here are the myths and the facts: Claim: UC says the study was not funded by taxpayers. The Times Reporter stated last week that UC said state and federal funding “did not fund the water sampling campaign.” Fact:   The study actually could not have been conducted without the taxpayer funded tools to determine the findings. According to UC’s own press release : “Funding for the UC study was supported in coordination with …the Ohio Board of Regents… were also awarded a $400,000, 3-year grant from the National Science Foundation (EAR-1229114)  for an isotope ratio mass spectrometer. The instrument measures the stable isotope composition of methane, which can indicate whether it is derived from biological activity or natural gas.” (emphasis added) Moreover, according to the terms of the National Science Foundation grant, UC is required to produce the results of this study. As the National Science Foundation’s grant award for the projects states : “Results from research projects using this instrumentation will be disseminated through student and faculty presentations at national and international scientific meetings, publications in peer-reviewed journals, and online data repositories.” As the US Chamber has correctly pointed out , neglecting to produce a formal report of their findings, “looks to be in violation of the grant the University of Cincinnati used to fund its research.”  The Ohio Chamber of Commerce has also  weighed in  explaining, “Taxpayers also helped fund the U.C. study. State law, and common sense, says that if tax dollars were used to conduct this type of research, the results must be made public. As Rep. Andy Thompson said , “It is unacceptable that taxpayers have funded this important groundwater study and the findings are now being kept from the public.” Claim: UC says the study was not funded by activists . The university claims that it did not receive any money from industry or activists.  Directly from the UC’s own Frequently Asked Questions of the study: “We are not funded in any way by energy or fracking companies or by anti-fracking groups. Our funding comes from two non-profit, philanthropic organizations, the Deer Creek Foundation and the Alice Weston Foundation. We also receive private donations from individuals.” Fact: That’s not exactly accurate. The study received over 18 percent of its funding from the Deer Creek Foundation . As the Chamber of Commerce uncovered this week, Deer Creek Foundation gave  $25,000 to the Media Alliance in Oakland, Calif. for a documentary on the “rise of ‘extreme’ oil and gas extraction – fracking, tar sands development, and oil drilling in the Arctic” as well as  $20,000  to the Northern Plains Resource Council, a Montana activist group that states on its website , “Fracking damages water, land and wildlife.” EID also uncovered that Deer Creek Foundation donated at least $20,000 to WildEarth Guardians , which is a key player in the “Keep-it-in-the-Ground” anti-fossil fuel movement that has been especially active in Ohio lately. Furthermore, the lead researcher for the UC Groundwater Study, Dr. Townsend-Small, said at a recent public meeting hosted by the anti-fracking Carroll County Concerned Citizens (CCCC) : “I’m really sad to say this but some of our funders, the groups that had given us funding in the past, were a little disappointed in our results . They feel that fracking is scary and so they were hoping our data could point to a reason to ban it.” (emphasis added) In other words, taxpayers funded the tools to analyze the water samples while the funding for taking the samples themselves came from anti-fracking activists. http://everythingshale.com/news/2016/march/01/who-funded-the-university-of-cincinnati-study-finding-no-water-contamination-from-fracking/ http://everythingshale.com/news/2016/march/01/who-funded-the-university-of-cincinnati-study-finding-no-water-contamination-from-fracking/ Tue, 01 March 2016 10:07:22 http://everythingshale.com/news/2016/march/01/re-sellers-protect-your-bottom-line/ With traders, suppliers and traditional petroleum marketers filling the supply chain, re-sellers are carving out their space. Providing a convenient and cost-effective alternative for customers, they are often the most attractive option for buying fuel. Re-sellers provide the customer with the options they deserve, and what customer doesn’t enjoy options? The best alternative Re-sellers can drive a profitable and sustainable business but they also face a slate of unique challenges to remain a customer’s top choice while protecting razor thin margins. In order to remain relevant, re-sellers must meet their expanding customer base with the most innovative industry tools and strategies, all while maintaining a strong supply and profit and keeping customer relations at the center of the operation.   Getting digital Customers want hassle-free transactions that allow them to quickly and confidently complete transactions with ease. They require their pricing and bills of lading (BOLs) be received electronically – as they do from major oil companies. This expedites everyone’s process, improves accuracy and enhances the overall customer experience. Buyers won’t buy if you don’t supply! While price is the biggest factor in the buying decision, having readily available product is key. Quite simply, buyers won’t buy if you don’t have supply!  Protecting volume for those customers is possible using product allocations which allow re-sellers to reserve gallons needed for their own deliveries, gallons for contract customers and a balance for uncommitted buyers. Real-time action Since re-sellers sell product directly at the terminal to customers lifting on their accounts (most often with other suppliers), re-sellers have a significantly higher risk for buyers to exceed their credit limits. Utilizing the same tools as suppliers, they should impose credit allocations along with pre-arranged controls to manage that risk in real-time across all terminals regardless of the terminal operator. First class customer service In order to maintain strong business relationships with suppliers and customers, re-sellers should always openly communicate and have a pulse on available inventory, so as not to miss an opportunity. Customer bonus: Prioritizing volume for top customers is another great way to strengthen customer relations and create customer loyalty. You can do this, and do it well! From creating seamless communication and transactions, to the improvement in product and credit management, re-sellers reduce their risks with the use of industry tools and strategies. These added benefits will not only make re-sellers more marketable to consumers, but also will help manage workloads, profit and keep business moving forward. To learn more about how Schneider Electric solutions can help with the art of re-selling, visit our website today. The post Re-sellers: protect your bottom line appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/march/01/re-sellers-protect-your-bottom-line/ http://everythingshale.com/news/2016/march/01/re-sellers-protect-your-bottom-line/ Tue, 01 March 2016 09:40:18 http://everythingshale.com/news/2016/march/01/regulators-take-first-step-to-ensure-new-york-s-distributed-energy-future-is-clean/ New York's environmental and utility regulators are moving closer to a unified approach to building a cleaner, more robust, and affordable energy system. The Public Service Commission (PSC), New York's utility regulator, has been working to rethink how New York makes, moves, and uses electricity through its innovative  Reforming the Energy Vision (REV) initiative. Specifically, it has been steering utilities toward a more decentralized electric grid, one that relies more heavily on distributed energy resources. These resources may be clean (such as energy efficiency or solar rooftops) but they may also be dirty (such as older diesel generators). While REV aims to encourage carbon emissions reductions, there is a risk that the initiative could cause environmental harm by driving adoption of dirty distributed energy resources. Getting environmental rules in place before REV becomes a driver of these types of emissions is a matter of real urgency. In December 2015, the New York State Department of Environmental Conservation (DEC) moved to assist the PSC with this dilemma by proposing Part 222 , a new set of regulatory standards that aim to address emissions from generators that burn fossil fuels. (EDF recently submitted comments in response to the proposal.) Federal regulations exist for some distributed generation emissions, but they are limited and not tailored to the needs of New York's increasingly decentralized electric grid. With these newly proposed regulatory standards, we can begin to address the issue that while some distributed energy resources can be expected to bring great environmental benefits, others may be very damaging to public health and the environment. Regulators Take First Step to Ensure New York's Distributed Energy Future is Clean CLICK TO TWEET Making sure increased reliance on distributed energy resources is environmentally beneficial overall is critical to REV's success. While the proposed rule is a step in the right direction, the DEC could do more to lay the groundwork for a clean, distributed future. Some opportunities include: Close the information gap Currently, there is no comprehensive information on fossil-fueled distributed generation, which is a problem for regulators or other parties responsible for managing emissions system-wide. We know these generators are numerous, but we simply don't know exactly what they are, where they are, and how much pollution they are emitting. Closing this information gap is of paramount importance given the likelihood that a decentralized system will mean new incentives that could encourage even more usage of fossil-fueled distributed generation. Regulating emissions from today's distributed generation is complex and it will become more challenging if we are not prepared to consider more numerous sources. In the future, the New York electric marketplace will likely have the infrastructure to support the gathering and analysis of energy consumption and system data. The DEC can use this infrastructure to track the operation of distributed generation and make reasonable emissions estimates, allowing New Yorkers to get more value from that infrastructure. Beware of loopholes There's a real fear that the damage caused by emissions from distributed generation could grow as the electric marketplace transforms. I recently co-authored a paper expanding on this concept, which includes some of these examples: Older diesel generators can emit Nitrogen Oxide (NO x ) at rates ten times greater than coal-fired power plants. Their lack of smokestacks and proximity to people can exacerbate their harmful health effects. Demand response , the practice of rewarding electric customers who modify their consumption of power from centralized power plants in order to relieve stress on the grid, is an important tool for managing the electric system. However, a large share of today's demand response is made possible by customers shifting some of their demand away from centralized generation and over to on-site fossil-fueled generators. New price signals in the electric marketplace that enable participants to reap the value of distributed energy resources are likely to provide economic reasons to operate generators of all sizes that, in the past, may have been useful only for emergencies. Increasingly tight emissions restrictions placed on central generating stations may increase the cost of power from those resources, potentially to the advantage of smaller pollution-emitting resources that are not subject to such restrictions. Part 222 would regulate the emissions from some distributed generation, but would create numerous loopholes based on technology (only internal combustion is covered), engine size (minimum 200 horsepower in NYC and 400 horsepower elsewhere), and manner of use (emergency generators are excluded). Some owners of distributed generation have already asked for this special treatment to be expanded by giving some generators that do not meet the current definition of emergency generator†the benefit of that exemption. The DEC should close as many of these loopholes as possible, and soon. Tighten the testing regime Under the proposal, distributed generation sources that are subject to emissions rules will be tested every ten years. This timeframe is a cause for concern since pollution control devices can deteriorate over time. Owners of distributed generation need to take emissions seriously at all times, not just every ten years. The DEC can make sure this happens either by conducting spot checks of some fossil-fueled, distributed generation between mandatory tests, or by requiring tests more frequently. Manage greenhouse gas emissions The proposed rule does not address carbon pollution the single largest contributor to climate change. This omission is highly significant since carbon dioxide emissions from larger, centralized facilities are managed under the Regional Greenhouse Gas Initiative (RGGI) , a program through which nine states work together to reduce greenhouse gas emissions. Any generation source below 25 megawatts is exempt from participating in RGGI, no matter what kind of fuel it uses or how efficiently it operates. The New York State Energy Plan calls for a 40 percent reduction in all carbon emissions by 2030 yet we have reason to believe fossil-fueled distributed generation is already on the rise. Adopting a policy framework that allows carbon emissions from this class of resources to increase and maybe even go undetected could be a misstep. Key takeaways This proposal was many years in the making. It is a strong beginning, but can be improved to prepare for a future electric marketplace that is radically different from today's. Ideally, the DEC will make sure the current rule positions it and its sister agencies to protect our health and our environment now and in the future. It may be many more years before we have another chance to get this right, and making choices now that fail to anticipate the future could cost us greatly. The DEC can and should act on this proposal soon, but in a manner that is fully in step with the REV transformation. By Elizabeth Brooke Stein Originally Published on February 25, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/march/01/regulators-take-first-step-to-ensure-new-york-s-distributed-energy-future-is-clean/ http://everythingshale.com/news/2016/march/01/regulators-take-first-step-to-ensure-new-york-s-distributed-energy-future-is-clean/ Tue, 01 March 2016 09:00:14 http://everythingshale.com/news/2016/february/29/ethylene-projects-in-the-ethane-heavy-northeast-us/ The US has experienced a renaissance in petrochemicals due to the abundance of ethane from shale gas. As a result of the increasing NGL production from various shale plays, there have been a total of 17 announced greenfield steam crackers in the US. Since much of the NGL production boom has come from the Northeast US, we wanted to take a look at ethane cracker projects in that area and assess their progress. Ethane supply from the Marcellus and Utica Shale has grown strongly in the last few years but regional demand and pipeline takeaway capacity is still limited. US ethane supply from gas plants (before rejection) in the Marcellus and Utica has grown from 5,000 b/d in 2013 to about 276,000 b/d in 2015, according to Platts Bentek. Ethane production is estimated to grow to 387,000 b/d in 2017 and 443,000 b/d in 2018, according to Platts Bentek Market Call: North American NGLs, 1Q 2016 . Due to limited transportation infrastructure and unfavorable economics, a large volume of ethane is rejected in the natural gas stream. Ethane rejection averaged about 176,000 b/d in 2015 in the Marcellus/Utica. However, Platts Bentek estimates ethane rejection to decrease to 120,000 b/d in 2017 and to about 75,000 b/d in 2018, due to increased demand from exports and new ethane-only crackers coming online on the US Gulf Coast. With the declines in rejection and increase in production, ethane recovery in the Northeast will reach 443,000 b/d in 2018, up from 276,000 b/d in 2015. Subsequently, increased ethane volumes will need to flow on ATEX to the Gulf Coast, utilizing near full capacity on an expanded ATEX by 2018. Additional takeaway capacity and demand will be required to balance the oversupplied Northeast ethane market. In the US there have been a total of 17 announced greenfield projects. During the next five years, we will see several of these crackers start up, mostly along the US Gulf Coast. In the Marcellus and Utica shale formations, there are four crackers that can possibly be built within the next five years. These include the 275,000 mt/year cracker in Monroe County, Ohio; the 1 million mt/year PTTGC America in Belmont County, Ohio; the 1 million mt/year Ascent cracker in Parkersburg, West Virginia; and the 1.5 million mt/year Shell Appalachia cracker in Monaca, Pennsylvania. Will these projects come to fruition by 2021? Of all the projects outside the US Gulf Coast, the Shell cracker is the most likely to be built. Though the world-scale cracker has yet to be given the green light, Shell can afford to build considering certain risks, unlike proposed projects run by startups. The Appalachian Resins cracker has been put on hold due to the difficulties in finding engineering services and workers in the area at the same time when the world scale PTTGC cracker in Belmont County is being constructed. In late October 2015, Technip signed an agreement to provide its ethylene technology and process design package to PTTGC. Many people in the industry have wondered how the Appalachian Resins cracker, with its relatively small capacity, was viable. According to AR CEO James Cutler during the NGL Feedstocks and Derivatives conference in Houston last week, it is viable if the plant is integrated with a gas plant and polymer plant where the gas plant will send just enough feedstock to the cracker, and the cracker will send just enough feedstock to the polymer plant. However, since oil prices have fallen significantly, and pulled down most prices of products in the supply chain, the project is no longer feasible, but has been put on hold as opposed to being shelved. During the first half of 2015, Braskem and Obedrecht announced that the companies were reconsidering and reevaluating the Ascent project in Parkersburg, West Virginia. There were no announcements indicating that this project was cancelled, and there have been some reports that this project may still move forward. Regarding the Aither Chemical small cracker proposed in West Virginia, there haven’t been any announcements indicating that this has been delayed or shelved. However, with its relatively small capacity, it would be difficult to achieve economies of scale. Therefore, we believe that financing this project would be very difficult. Of all the announced projects, the most aggressive plan has been the proposed Badlands cracker project in North Dakota. According to Badlands CEO William Gilliam during the NGL Feedstocks and Derivatives conference, “Badlands has been working since 2012 to build a plant close to the wellhead.” Initially, plans were to build a large-scale ethane cracker in North Dakota and a polyethylene plant, with the idea that it is much easier to transport plastic resin than ethane gas or ethylene. Therefore, building a cracker in the Bakken where a lot of ethane is rejected would make sense. Right? But North Dakota lacks the infrastructure to transport ethane to the East Coast or the Gulf Coast, and may be extremely difficult to accommodate a world-scale cracker and integrated polymer plant. At the conference, Gilliam announced that Badlands is planning two world-scale crackers, the first to be built “on the water” (location was not disclosed), and the second to be built in North Dakota afterwards. Gilliam also points out that producers in the region are selling condensate at a premium to WTI. Therefore, producers aren’t that concerned with NGLs since they are getting paid well for condensate. Additionally, Badlands is in serious talks with an ethane supplier in Canada, according to Gilliam. As a result, the company will have easy access to ethane. http://everythingshale.com/news/2016/february/29/ethylene-projects-in-the-ethane-heavy-northeast-us/ http://everythingshale.com/news/2016/february/29/ethylene-projects-in-the-ethane-heavy-northeast-us/ Mon, 29 February 2016 23:01:11 http://everythingshale.com/news/2016/february/29/starupdatestar-us-chamber-and-elected-officials-call-for-release-of-uc-study-finding-no-water-contamination-from-fracking/ UPDATE (7:00 pm ET, 2/29/2016): Following calls by the US Chamber of Commerce and Ohio State Rep. Andy Thompson for the University of Cincinnati (UC) to release its full findings from its groundwater study finding no water contamination from fracking, the Ohio Chamber of Commerce has now weighed in explaining, “Taxpayers also helped fund the U.C. study. State law, and common sense, says that if tax dollars were used to conduct this type of research, the results must be made public. Several  legislators , businesses, and groups that support safe and economic oil and gas drilling are calling out U.C. to release the full report. We hope they listen. This way residents in these areas of Ohio can feel safe knowing their water is not being harmed and can continue to freely enjoy the benefits of shale development in their communities.” — Original post, February 26, 2016 — This week, the US Chamber of Commerce and Ohio State Representative Andy Thompson called on the University of Cincinnati (UC) Department of Geology to release the full findings of its groundwater study, which found no contamination from hydraulic fracturing. This call comes after EID published a video , which highlights comments by the lead author of the study explaining, “There was no significant change in methane concentration over time, even as more and more natural gas wells were drilled in the area.” The study was funded by taxpayers as well as activists groups, who were left “ disappointed” that the researchers found – after three years and 191 water samples – that the water contamination in Ohio wells “clearly did not have a natural gas source.” To date, the study’s findings have only been made available at a public meeting hosted by an anti-fracking group, Carroll County Concerned Citizens , despite the fact that UC has been very forthcoming with the public about the fact that they’ve been studying fracking over the past few years. As the US Chamber said this week, “The University of Cincinnati should hold up its end and add to the public’s knowledge of hydraulic fracturing’s safety. With so much misinformation being pushed by hydraulic fracturing opponents, a short presentation in front of a few people in southeast of Canton, Ohio doesn’t cut it. ” (emphasis added) State Representative Any Thompson pointed out in a recent interview: “It is unacceptable that taxpayers have funded this important groundwater study and the findings are now being kept from the public. UC has still not produced a full report of their findings, nor has the university issued a press release of their results. Yet, during the course of the past few years, the university has released countless advisories on the multi-year Groundwater Research of Ohio study . I am calling on the University of Cincinnati Department of Geology to release their full findings surrounding this study immediately. The people of Ohio have funded and deserve to know that private water wells in shale counties have not been impacted.” (emphasis added) Elected officials and the US Chamber are not the only ones calling for its release.  Since EID published its video of the findings, some articles have produced headlines like this: “ Shame on the University of Cincinnati.” The public deserves to know the positive results of the study so why aren’t the researchers making their findings available? http://everythingshale.com/news/2016/february/29/starupdatestar-us-chamber-and-elected-officials-call-for-release-of-uc-study-finding-no-water-contamination-from-fracking/ http://everythingshale.com/news/2016/february/29/starupdatestar-us-chamber-and-elected-officials-call-for-release-of-uc-study-finding-no-water-contamination-from-fracking/ Mon, 29 February 2016 16:00:13 http://everythingshale.com/news/2016/february/29/factsheet-seismic-exploration-safe-for-florida/ With plans for seismic exploration in the Big Cypress Preserve underway, many Floridians have questions about this technology and what its use means for their local environment. Thankfully, and as the below factsheet depicts, seismic exploration is a non-invasive and safe technology with minimal environmental impact.  In fact, 3-D seismic exploration allows exploration and production companies to quickly pin point where resources are located without having to drill exploratory wells . Here is how it works.  A “vibroseis truck” creates a seismic wave on the surface of the ground, which then travels into the earth and is reflected by subsurface formations.  The image of these formations is collected by receivers called “geophones.”  Geophysicists are then able to create a map of the underground formations by analyzing the amount of time it takes for the seismic waves to reflect off of these formations and return to the surface.  All of this helps predict where oil and gas reserves are located. The “vibroseis trucks” used in this process are a key part of reducing the environmental impact of exploration activity because they abrogate the need for dynamite, and instead use very small vibrations.  As previously noted by EID, scientists with state and federal agencies, experts in academia, oil and gas industry geologists and engineers have repeatedly reaffirmed the safety of vibroseis trucks. “In an urban environment, vibroseis-generated waves are less than background noise generated by buses, trucks, and trains… At its source you can feel a vibroseis shake the ground but as you move away your ears will hear the airborne sound waves much longer than your feet can feel those in the ground.”                                                 – Utah Geological Survey “Residents standing near a vibroseis truck… may be able to detect it, but this process will not cause any interruptions of daily life or cause damage to structures.” – U.S. National Energy Technology Laboratory   “The seismic imaging process does not damage the street or negatively impact the earth below ground.”                 – Long Beach Post (Long Beach, CA) Below is a video of the vibroseis truck in action. Due to 3-D Seismic Imaging’s accuracy and light environmental footprint this technology has become standard throughout the oil and gas industry, and will be perfectly safe for use in Florida. http://everythingshale.com/news/2016/february/29/factsheet-seismic-exploration-safe-for-florida/ http://everythingshale.com/news/2016/february/29/factsheet-seismic-exploration-safe-for-florida/ Mon, 29 February 2016 13:55:25 http://everythingshale.com/news/2016/february/29/epa-chief-pushes-methane-rule-admits-epa-still-just-learning-this-industry-right-now/ Just as the Environmental Protection Agency (EPA) gets ready to finalize costly methane regulations on the oil and gas industry, EPA Administrator Gina McCarthy admitted at the CERA Week conference in Houston last week that EPA doesn’t actually understand the industry it means to regulate. As Administrator McCarthy put it , “My caveat is that EPA’s learning this industry right now because it’s not an industry we regulate. We’ve just gotten into regulation of this so there’s a lot of hundreds of thousands of small sources and EPA doesn’t generally have a relationship with this industry as we do other sectors that we’ve regulated for frankly decades. But we’re learning .” (emphasis added) To watch Administrator McCarthy’s full remarks, click here . As EPA just begins to learn about the issue, we’d like to point out that the most recent peer-reviewed studies and some of the best data available – including data from the Environmental Defense Fund and EPA’s most recent draft Greenhouse Gas Inventory – show that methane emissions from natural gas development are already well below the threshold ( 3.2 percent “leakage” rate) at which scientists believe natural gas may lose its greenhouse gas advantage. EPA may also wish to consult the Intergovernmental Panel on Climate Change (IPCC), which has said that even accounting for methane emissions, natural gas, brought about by fracking, is an “ important reason ” for the United States’ significant decline in emissions. EPA claims that it is regulating methane to mitigate climate change, yet natural gas is the reason the United States has achieved dramatic reductions in greenhouse gases – and EPA’s regulations could end up stifling that climate progress. Looks like EPA’s got a lot of learning to do . http://everythingshale.com/news/2016/february/29/epa-chief-pushes-methane-rule-admits-epa-still-just-learning-this-industry-right-now/ http://everythingshale.com/news/2016/february/29/epa-chief-pushes-methane-rule-admits-epa-still-just-learning-this-industry-right-now/ Mon, 29 February 2016 10:35:29 http://everythingshale.com/news/2016/february/29/opec-boxes-itself-into-a-corner-fuel-for-thought/ Heavyweight oil producer group OPEC stepped into the ring with young upstart US shale back in November 2014 and delivered its best shot. Led by prizefighter Saudi Arabia, it decided not to cut output in hopes of arresting the slide in prices, but, in an attempt to floor the relatively high-cost producer, declared it would defend its ground. Fast forward 13 months and unconventional crude supply is down but not out. And OPEC, whose membership has been split down the middle by a policy aimed at clawing back market share from what has proved to be a resilient opponent, must be wondering whether it has all been worth it — especially after having read the International Energy Agency’s latest medium-term forecasts. The IEA expects US light tight oil output to start recovering in 2018 after a 600,000 b/d decline in 2016 and a further 200,000 b/d drop next year. It sees US light tight oil reaching 5 million b/d by 2021, up from 4.23 million b/d in 2015 as oil prices recover and technology continues to improve. Indeed, OPEC is now in a predicament of its own making. It and Saudi Arabia have regularly stipulated over the past 13 months that OPEC will not cut output unilaterally but is willing to work with independent producers towards a stable market. But no one has shown willing to cut production and the talk now is of an output freeze, as proposed by non-OPEC Russia, Saudi Arabia and two other OPEC members, Venezuela and Qatar. OPEC Secretary General Abdalla el-Badri suggested in Houston last week that the proposed freeze could be a first step in the effort to deal with a global supply glut. But Saudi Arabian oil minister Ali Naimi pretty much dismissed any potential for future output cuts, telling the same conference audience that a coordinated production cut would be essentially pointless. “There is no sense in wasting our time seeking production cuts,” Naimi said, adding that OPEC and non-OPEC producers would likely “not deliver” if asked to cut production. Naimi was confident that major producers would join a pact to freeze production at January levels. US shale producers having their “Rocky” moment But, understandably, there is some disgruntlement within OPEC’s ranks about the mechanics of a freeze, which would see producers hold output at the January level. This would mean Saudi Arabia continuing to pump in excess of 10 million b/d and Russia at the all-time high of 10.88 million b/d. Not surprisingly, Iran is unwilling to play ball, with oil minister Bijan Zanganeh last week saying it was “a joke” that countries pumping more than10 million b/d should expect Iran to freeze its production at the low level imposed by the sanctions. But OPEC’s challenges don’t just lie in breaking the impasse and getting its own members and non-OPEC producers on board. They lie with the fact that any agreement — whether a freeze or an output cut — may not have the desired longer-term outcome, because restraining supply could allow shale producers to ramp up production and offset any supply cap. This risk was highlighted by the IEA: “While oil prices should start to rise gradually once the market begins rebalancing, the availability of resources that can be easily and quickly tapped will limit the scope of rallies – at least in the near term.” Oil companies have become far more efficient in fracking unconventional wells over the last decade and should continue to raise productivity, but probably need prices quite a bit higher than $30 a barrel to boost activity, shale experts have said. The IEA sees the supply glut continuing into 2017, heaping more pain onto crude producers on both sides of this battle. There is unlikely to be any clear winner from ongoing low prices, which have been bobbing along close to 12-year lows. But did OPEC have a real alternative to its market share policy? Possibly not. And with no sign of a coordinated pact among producers to reduce production, leaving the business of supply management to market may still be the only realistic option — even if that means continuing and deepening pain for the oil producing community as a whole. Also, does OPEC have the resolve? For OPEC, read Saudi Arabia, and, to judge from Naimi’s remarks in Houston last week, there is no sign that the kingdom is for turning. Indeed, Naimi said Riyadh could survive $20/barrel oil. In December 2014, he said OPEC would not cut, even if prices went to $20/b. As the great US baseball player Yogi Berra once said, it’s déjà vu all over again. — Paul Hickin in London http://everythingshale.com/news/2016/february/29/opec-boxes-itself-into-a-corner-fuel-for-thought/ http://everythingshale.com/news/2016/february/29/opec-boxes-itself-into-a-corner-fuel-for-thought/ Mon, 29 February 2016 05:00:36 http://everythingshale.com/news/2016/february/28/bp-to-face-senate-over-australian-bight-oil-and-gas-drilling-plans/ Offshore oil exploration in Australia’s most prospective frontier basin could be heading the way of onshore gas development in the country’s southeast: straight into an environmental roadblock. Plans by UK major BP to drill for oil and gas in the Great Australian Bight were knocked back by the federal regulator last November, and now the Senate is going to take a look at the proposal, in a move that activists have said means politicians will be doing the work of the government’s environment department. Australia’s National Offshore Petroleum Safety and Environmental Management Authority last year ruled that BP’s plans to drill four wells in the Bight’s Ceduna Sub-basin did “not yet meet the criteria for acceptance under the environment regulations.” Oversight of the offshore drilling plans was moved from the environment department to NOPSEMA in 2013. BP has played down the significance of the rejection, saying it was a normal part of the process of scrutiny and that it had expected to have to work hard to get its environmental clearances. The company will now have to persuade the politicians, including members of the Australian Greens party, after the upper house of federal parliament referred the drilling plans, and any future oil and gas production in the Bight, to its Senate Standing Committees on Environment and Communications. The committee will be open for submissions until April 1 and will report back by May 12. The Bight, a vast tract of ocean off Australia’s southern coast, is home to an array of marine life, including humpback, blue and southern right whales, southern bluefin tuna, sea lions and great white sharks. It is regarded as one of the world’s prime frontier basins, with potential for big reserves of oil and gas. That promise has seen it attract the attention of a number of other industry heavyweights, including Chevron and Murphy Oil. BP is yet to submit a modified environmental plan to NOPSEMA, but is still aiming to get its $600 million drilling campaign underway toward the end of 2016. The company holds its acreage in a joint venture with Norway’s Statoil. BP’s plans to drill in the remote region have come under particular scrutiny due to the company’s role as operator of the Macondo well in the Gulf of Mexico, which blew out in April 2010, spewing 3.19 million barrels of oil into the sea over 87 days. The well failure caused an explosion on the Deepwater Horizon drilling rig in which 11 lives were lost. The Wilderness Society, an Australian environmental lobby group, has led the charge against BP’s plans, claiming that any oil spill in the Bight could be even worse than in the Gulf of Mexico because of the region’s remoteness, rough seas and strong wind and water currents. According to the Wilderness Society, independent modeling has shown that a spill there could result in the closure of fisheries in the Bight, the Bass Strait and even the Tasman Sea. It claims even a “low-flow oil spill” could impact all of southern Australia’s coast, from Western Australia to Victoria, through Bass Strait and around Tasmania. “BP should not resubmit its application [to NOPSEMA] to drill in the Great Australian Bight until the Senate committee has reported back, unless it wants to treat the Senate and the Australian people with contempt,” Wilderness Society South Australia Director Peter Owen said last week. “It’s time for BP to properly listen to the deep concerns many stakeholders and affected communities have about this risky project.” So far, offshore oil and gas exploration activity in Australia has been largely unimpeded by concerns raised by environmental activists. The same can’t be said of the onshore sector, where state governments have jurisdiction and have shown themselves to be highly sensitive to protestors. In the southeastern state of Victoria, both the government and the opposition have backed a moratorium on all new onshore gas exploration, both conventional and unconventional. Victoria, which largely depends on conventional gas from Bass Strait for its domestic consumption, has also banned hydraulic fracturing. In neighboring New South Wales, exploration and development of the state’s extensive and badly needed coalseam gas reserves has all but ground to a halt in the face of ongoing protest by lobbyists led by the “Lock the Gate” movement. The NSW government last year instituted a licence buyback which reduced the coverage of petroleum titles from 60% to around 8.5% of the state. NSW, which produces only 2% of the gas it consumes, has now put in place a framework under which an advisory body is responsible for recommending to the energy minister any new areas to be released for exploration. According to the framework, the body will only consider an area for release after undertaking an assessment of environmental, social and economic factors, as well consulting with the local community. For BP in the Bight, however, the company will be hoping it is just a matter of getting all its ducks in a row, a process it says is still ongoing. If it does, it will be hoping for more luck with the drillbit than Woodside Petroleum struck with the region’s first and only well, the unsuccessful Gnarlyknots-1, in 2003. http://everythingshale.com/news/2016/february/28/bp-to-face-senate-over-australian-bight-oil-and-gas-drilling-plans/ http://everythingshale.com/news/2016/february/28/bp-to-face-senate-over-australian-bight-oil-and-gas-drilling-plans/ Sun, 28 February 2016 23:01:24 http://everythingshale.com/news/2016/february/26/the-challenges-and-opportunities-around-us-ngl-and-petrochemical-exports/ Earlier this week we attended the NGL Feedstocks and Derivatives: Global Supply & Demand Dynamics 2016 conference in Houston,  hosted by the American Business Conferences. During the presentations, Q&A sessions, round-table discussions, and our conversations with the industry during networking breaks, we debated the questions around exporting NGLs and petrochemicals out of the US. The best response when asking tough market questions was, “Well, it depends.” The US NGL market is gaining an increasing share of global demand as the shale boom has made it the world’s largest oil and gas producer and the largest LPG exporter since 2014. In 2015, the US produced 1.395 million b/d of propane and exported about 43% of the total (604,000 b/d), according to the US Energy Information Administration.  It also produced 481,000 b/d of butane and exported about 24% (117,000 b/d), as of November 2015. With the recently completed Enterprise’s terminal expansion, total US LPG export capacity is at 1.045 million b/d. With strong production growth in the US and flat demand in Europe and the Americas, US LPG is increasingly reaching distant markets like Asia. Additionally, US ethane will also fulfill global demand as the first cargo of US ethane is set to leave this March from Sunoco’s Marcus Hook export facility in Pennsylvania. Sunoco’s 70,000 b/d Marcus Hook terminal in Pennsylvania and Enterprise’s 200,000 b/d Morgan’s Point terminal in Texas will serve to satisfy export demand, currently contracted to Europe and India. Following the startup of Enterprise’s terminal in 3Q 2016, US ethane exports are expected to ramp up to 150,000 b/d in 2016 and 283,000 b/d in 2017 from 69,000 b/d in 2015, according to Platts Bentek Market Call: North American NGLs, 1Q 2016. During roundtable discussions, conference participants discussed which country — China, Brazil, or India — was the best market for US ethane, propane, butane, and naphtha. And, of course, the answer was, “Well, it depends.” For US ethane exports, the consensus was that India is the best market. As of 2016, India has a capacity of 5.7 million mt of ethylene capacity. Most of the ethylene capacity in the country is naphtha based, and therefore all the naphtha crackers are integrated with refineries. “North India has a population of 800 million with an average of 25 years old; a percentage growth GDP equates to a lot of plastic demand in India,” according to Mathew George, chief manager of petrochemicals exports at IOCL. India has a lot of potential but is short of ethane at the moment. Currently, Reliance Industries is the only Indian operator with contracts to import US ethane. Platts Bentek estimates that Reliance will import 72,500 b/d of ethane for three crackers on the west coast of India: Dahej, Hazira in Gujarat and Nagothane in Maharashtra. The company is also building a world-scale shipping terminal and storage facility at Dahej. Additionally, two-other state run oil companies, GAIL and BPCL, have announced plans of importing US ethane. GAIL plans to start a 1.3 million mt/year ethane-based petrochemical plant on the east coast of India but has not announced any contracts yet, according to The Economic Times . This would result in an additional 63,000 b/d of ethane demand. BPCL is also considering importing US ethane for its expanding refinery operations, according to the Business Standard . While there are opportunities for the US to export ethane to India, there are still challenges. Currently the west coast of India is equipped to import ethane, while the east coast is “decades behind,” according to George. George further explains that the only way it would make sense for producers to import ethane is if they are running an ethane cracker. Comparing to flex crackers, George says, “We don’t have a menu like the US; we open the fridge, and we eat what we have.” George adds that it makes more sense to crack the feedstock, polymerize the product and send to India. For US LPG and naphtha export markets, people were divided. Half the room said that it makes more sense to export propane to China, while the other half said that it made more sense to export propane along with naphtha to Brazil. The latter was based on the slides presented by Hardi Schuck, director of supply chain at Braskem. According to Schuck, Brazil is short in naphtha and NGLs. In order to understand the naphtha shortage, it is important to understand the relationship between ethanol and gasoline in the Brazilian fuel market. After 2003 and with the availability of fuel flex cars, vehicles in Brazil were able to use gasoline and ethanol. If the price of ethanol was 70% less than gasoline, then people shifted to ethanol for fuel. Since then, Brazil has turned from an exporter to a net importer of gasoline. Gasoline production has increased and, in turn, increased demand for naphtha in gasoline blending. Brazil is also an importer of propane, and the US accounts for 70% of all imported LPG. On the other hand, China is interested in increasing the flexibility of their crackers as well. One producer in the conference mentioned that they have had multiple inquiries from Chinese companies to import US LPG. China accounted for the largest share of US LPG exports at a national level, averaging 110,000 b/d as of November 2015, according to the EIA. The Asian share of US LPG exports grew to 31.3% in 2015 from 12.6% in 2013, with Asia being the biggest market for US LPG in 2015 followed by the Americas. Global LPG demand is being driven by growth in Asia, which is set to grow further, according to the Feb. 10 Bentek Weekly NGL Market Monitor. One interesting point that was raised during the round-table discussions was if the US will be able to sustain exports of NGLs when the shale plays begin to dry out and decline in production. While this may not be an issue in the near future, it is a legitimate concern long term. In regards to US petrochemical exports, the answer is pretty apparent. Can the US export more petrochemicals? Well, it depends. There are huge arbitrage opportunities between the US and other regions like Europe and Asia regarding ethylene trade. However, the issue with exporting ethylene is that it is expensive. There is currently one terminal exporting US ethylene on the US Gulf Coast, with a capacity of 200,000-300,000 mt/year, which presents a major challenge. As a percentage of US capacity, which is expected to be approximately 29 million mt in 2016, the amount that is available is relatively small. So while arbitrage opportunities remain open on paper, exports are limited. It’s also important to note that when a company constructs a steam cracker, they are doing so with the intention to export the end product, like polyethylene or polypropylene, as plastic resin is easier to transport. And with the startup of many PE units in 2017, the US is expected to export PE resin to areas of the world experiencing tightness or areas that are short. And finally, in regards to polypropylene, because the US will be in a tight to short position, it is likely that we will not see any PP exports within the next several years unless we see new announced PP projects. http://everythingshale.com/news/2016/february/26/the-challenges-and-opportunities-around-us-ngl-and-petrochemical-exports/ http://everythingshale.com/news/2016/february/26/the-challenges-and-opportunities-around-us-ngl-and-petrochemical-exports/ Fri, 26 February 2016 11:19:31 http://everythingshale.com/news/2016/february/25/rough-seas-for-dry-bulk-shipbrokers-as-commissions-tank/ It’s carnage out there for the dry bulk shipping market. Anyone and everyone connected to this market are bleeding profusely with freight for moving dry commodities offering negative returns for over a decent period of time now. While it’s a matter of life and death for the dry bulk shipowners, who are struggling to cover even their operational expenses, the current crisis is pushing shipbrokers to the edge. Almost gone are the days when shipbrokers used to pride themselves as “CEOs,” a pun-intended acronym in the shipping world for “chief entertainment officer.”  With incomes from commissions drying up due to rock-bottom freight levels, which is just three digits in some cases, shipbrokers are now asking for a lump sum amount as commission, instead of a percentage-based brokerage rate from shipowners. So is the entertainment spree by the shipbrokers for their clients, that’s almost non-existent these days. Shipbrokers are a vital cog in the commercial shipping market. They not only help match a shipowner’s vessel with a charterer’s cargo, but also provide their clients a wide range of market intelligence and constructive advice. The massive slowdown in the dry bulk market has brought in a do-or-die situation for the shipbrokers. They are earning a pittance from commissions received for fixing ships. The practice of asking a lump sum amount as commission has been prevalent for a few months now with a broker commission based on 1.25% of the total freight bill offering a paltry sum as brokerage, according to a few shipowners and ship-operators. While this is not a shipping industry norm yet, it is practiced on a case-by-case basis and depends largely on the relationship between the shipbrokers and the shipowner as well as the trade route. “Sometimes when we fix a short voyage, we offer to pay on a lump sum basis. So far, only seeing it on voluntary basis, but wouldn’t be a surprised if brokers start insisting for a minimum lump sum going forward,” said a shipowner source. The fact is that the volume of business that brokers are doing is shrinking. “Owners are mostly looking to place their own vessels for own cargoes,” said a shipowner, adding that there was very little margin to pass on to anyone in this market. A shipbroker summed up the current situation by saying that the dry bulk shipping industry will change after the present crisis not because of ship charterers or the shipowners, but due to the slim chances of shipbrokers surviving the depressed market conditions. http://everythingshale.com/news/2016/february/25/rough-seas-for-dry-bulk-shipbrokers-as-commissions-tank/ http://everythingshale.com/news/2016/february/25/rough-seas-for-dry-bulk-shipbrokers-as-commissions-tank/ Thu, 25 February 2016 23:01:26 http://everythingshale.com/news/2016/february/25/iea-us-oil-production-will-reach-all-time-high-in-the-next-five-years/ A new report from the International Energy Agency (IEA) predicts that despite low oil prices, domestic shale gas and tight oil production are on the upswing due to innovative technologies.  Furthermore, this production will allow the U.S. to remain a leading global producer . In the IEA’s annual Medium-Tem Oil Market Report , the agency predicts that US oil production will reach record highs over the next five years due to this continued innovation in the hydraulic fracturing (fracking) process. While the report does concede that US tight oil production still faces challenges from the global supply glut, IEA predicts the markets will re-balance over the next two years, after which the US will lead global oil production gains. As the press release states: “US production is seen reaching an all-time high of 14.2 [million barrels per day] by the end of the forecast period, but only after falling in the short term.” These predictions reaffirm the findings of several other recent government and industry reports, such as BP’s Global Energy Outlook and the U.S. Energy Information Administration’s Short Term Energy Outlook (EIA). In its Global Energy Outlook, BP notes that economists and industry enthusiasts have a long history of underestimating the outlook for U.S. shale, and have to consistently revise up their forecasts. As BP Economist Spencer Dale described : “We have been repeatedly surprised by the strength of U.S. shale, technological innovations and productivity gains have unlocked vast resources of tight oil and shale gas, causing us to revise our projections successively higher.  This year is no exception, with sizeable up revisions for both tight oil and shale gas .” (Emphasis added) While gains will be made for both tight oil and shale gas the U.S. has more shale gas resources and shale gas is not expected to plateau any time in the near future.  Due to this reality, BP’s Dale predicts that: “By 2035 U.S. shale gas [will] account for ¾ of total U.S. production and almost 20% of global output ” (Emphasis added) The EIA’s Short Term Energy Outlook , published this month, echoes the importance of tight oil to the overall U.S. energy picture, stating: “The focus of drilling and production activities will be on the core areas of major tight oil plays.  Despite the significant decline in total rig counts in 2015, rig counts have largely stabilized in the core counties of the Bakken, Eagle Ford, Niobrara, and Permian.  In these areas, falling costs and ongoing technological and process improvements in rig, labor, and well productivity are anticipated to lead to faster rates of well completions and less-rapid production declines relative to other Lower 48 onshore areas .”  (Emphasis added) As we’ve mentioned before , the continued decline in the global oil market has been spurred on by the Saudi Arabia led Organization of Petroleum Exporting Countries (OPEC). In an attempt to push out rivals such as the United States and maintain the cartel’s large market share, OPEC flooded the market with record amounts of supply, pushing down oil prices and forcing producers out of the market. OPEC however, failed to account for US technological innovation, as ever increasing fracking efficiency has allowed US oil production to withstand the current market weakness (not to mention allowed the US to record its first ever trade surplus with OPEC last year ). This efficiency will ultimately position the US as a global leader in terms of supply growth, as the IEA’s press release mentions: “[Light, tight oil] output declines by 0.6 mb/d this year and by a further 0.2 mb/d in 2017 before a gradual recovery in oil prices, combined with further improvements in operation efficiencies and cost cutting, allows production to resume its upward climb. The United States remains the largest contributor to supply growth during the forecast period, accounting for more than two-thirds of the net non-OPEC increase.” The strength of domestically produced shale vis-à-vis OPEC was also noted in an article published in The Telegraph , which neatly summarized IEA’s findings: “The current crash in oil prices is sowing the seeds of a powerful rebound and a potential supply crunch by the end of the decade, but the prize may go to the US shale industry rather [than] OPEC, the world’s energy watchdog has predicted.” This prediction is based upon the fact that once prices hit $60 , shale operations would be able to come back to life in a few short months, which is far quicker than the more conventional operations that account for OPEC’ supply. The IEA further touted US shale oil production (referred to in the report as “light, tight oil”, or LTO) in a statement to Reuters, as the agency said : “Anybody who believes that we have seen the last of rising LTO production in the United States should think again; by the end of our forecast in 2021, total U.S. liquids production will have increased by a net 1.3 million bpd compared to 2015.” This is great news for American shale operations and the jobs this industry supports. http://everythingshale.com/news/2016/february/25/iea-us-oil-production-will-reach-all-time-high-in-the-next-five-years/ http://everythingshale.com/news/2016/february/25/iea-us-oil-production-will-reach-all-time-high-in-the-next-five-years/ Thu, 25 February 2016 13:38:33 http://everythingshale.com/news/2016/february/25/federal-oil-and-gas-subsidies-fact-vs-fiction/ In any presidential election year it is inevitable that candidates on both sides of the political spectrum will begin hailing or bashing tax breaks, subsidies, and regulations throughout the US business landscape. No business is more susceptible to these discussions than the Oil & Gas industry. Depending on the date and audience a candidate is speaking to, an observer will hear that the oil & gas industry is subsidized between $10 billion to $52 billion. Before we break down the numbers behind the claims, let’s first define subsidy. According to Dictionary.com subsidy can be defined four ways: a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like. a sum paid, often in accordance with a treaty, by one government to another to secure some service in return. a grant or contribution of money. money formerly granted by the English Parliament to the crown for special needs. The definition does not claim that a subsidy is defined as not paying a certain amount in taxes. Now let’s break down the so-called subsidies. You will see these numbers inflated or deflated depending upon the source. In order to arrive at the $52 billion amount we have to analyze estimates at the higher end of the spectrum. The top six “subsidies” included in the $10-$18.5 billion estimates are as follows: Master Limited Partnerships ($3.9 billion “subsidy”) – Ending the MLP “subsidy” would result in MLP’s being considered corporations that must be taxed before their distributions are passed along to shareholders. Therefore, any MLP income would be taxed at the corporate level and then again at the dividend level. Distributions to shareholders would be impacted substantially. Preventing double taxation is not a subsidy. MLPs also exist for [entity display=”Real Estate” type=”section” active=”true” key=”/real-estate” natural_id=”channel_2section_63″]Real Estate[/entity] and other industries. Furthermore, the “subsidy” affects people across the spectrum from Pensioners, 401ks holders, to widows and orphans – hardly a “subsidy” for the oil and gas industry. Intangible Drilling Costs ($3.5 billion “subsidy” – low estimate is $780 million) – Intangible Drilling Costs are essentially the cost of drilling a new well that have no salvageable value. Currently, most exploration companies are allowed to deduct 100% of the costs in the year they are incurred with the majors able to deduct 70% of the costs immediately with the remaining 30% amortized over 5 years. In what world would money spent that may or may not be recovered be capitalized as an asset? Royalty Payment Reductions on Federal Lands ($2.2 billion “subsidy”) While paying no royalties on some offshore plots and reduced royalties in some regions might be considered a break by many. The incomes derived from operations are taxed at the same levels as any other income – hardly a “subsidy”. Embed from Getty Images Depletion Allowance ($1 billion subsidy – low estimate is $900 million) The depletion allowance allows companies to treat reserves in the ground as a capitalized asset that may be written down by 15% per year. The government only allows the “subsidy” for independent producers. Integrated oil companies such as Exxon, BP etc. are not allowed the exemption. Companies across the US are allowed a depreciation deduction for taxation purposes. The oil & gas industry should not be an exception. Domestic Manufacturing Deduction ($1.7 billion per year – low estimate is $574 million) – Congress passed the tax break in 2004 to encourage manufacturing companies to maintain their operations in the US. The tax break has been extended to oil & gas companies and allows them to deduct 9% of their income from operations. Critics charge that companies would not leave for a lower tax rate. Ever looked at how much cheaper it would be to operate a refinery in another country? Furthermore, the tax break extends to companies across multiple business segments – not just the oil & gas sector. Foreign Tax Credit ($900 million) The tax break allows US companies to deduct taxes paid in foreign countries from profits when the money is returned to the US. Of all the tax breaks, calling the Foreign Tax Credit a subsidy for the oil & gas industry has to be the most egregious. The US Federal Government allows any corporation doing business outside of the US the same exception. Several “subsidies” totaling an additional $3 billion combine to complete the $18.5 billion estimate. In addition to the $18.5 billion in “subsidies” states also grant an additional $3 billion in tax breaks to the oil & gas sector that can be considered subsides. Politicians and political pundits tend to lump state and federal subsidies together. Shockingly, nobody holds them accountable for their misstatements. In addition to the “subsidies” given to oil & gas company operations, politicians attempt to lump in an additional $16 billion in consumption incentives to the oil & gas industry. Consumption incentives range from direct subsidies to low income households for heating oil to tax breaks for farmers, and the US military. It seems that these should be classified as breaks for farmers and the military rather than to oil & gas industry. To somehow get to the $52 billion total, activists then lump in the military costs to defend shipping lanes and pipelines in the Middle East. Now let’s analyze what the oil & gas sector pays in taxes. In 2012 the top two corporations paying federal taxes in the US were ExxonMobil and Chevron paying a combined total of $45.2 billion. On average, the industry pays a 45% tax rate when all state, federal, and foreign taxes are totaled up. By comparison the Healthcare Industry pays a total rate of 35% and the Pharmaceuticals pay an estimated rate of 21%. Based upon these numbers it’s hard to believe which business sector is criticized the most for “subsidies”. http://everythingshale.com/news/2016/february/25/federal-oil-and-gas-subsidies-fact-vs-fiction/ http://everythingshale.com/news/2016/february/25/federal-oil-and-gas-subsidies-fact-vs-fiction/ Thu, 25 February 2016 13:00:07 http://everythingshale.com/news/2016/february/25/so-demanding-us-gasoline-marketers-zero-in-on-potential-future-growth-areas/ You can’t take a practice swing with a 6-iron here at the BPAMA gasoline marketers’ convention in Doral, Florida, without nearly hitting someone who is optimistic about gasoline. Not crude, mind you. There is plenty of sour feeling about that. But about 450 regional fuel executives have gathered this week at the Trump National golf resort at Doral, with Platts as one of the sponsors of the event. (The attendees will miss the really big show, which happens in a few days when resort namesake Donald Trump is expected as part of his campaign tour.) Things are funny at the far end of the supply chain. Cheap gasoline has its champions. Sure, profit margins are smaller. But pump prices south of $1.50/gal are seen as a lure to get the folks out to the gasoline station on the way to far-flung adventures. Who knows, maybe it’s even time to take the family to that new Harry Potter thing in California. And if you buy a frozen-ice slush creation for 99 cents on the way, more power to you. Just keep it off the upholstery, Rusty. “It’s funny how lower crude is a good thing for us,” BP Fuels Chief Operating Officer Doug Sparkman told about 400 regional “jobbers,” the execs who buy fuel from the majors on the way to getting it into your tank. “There is a good story on the demand side. We don’t see $100/b oil in the near future, but we are bullish on demand.” Sparkman said growth in US gasoline demand will offset losses to stout fuel economy that will be required in US vehicles in the 2020s and 2030s. Also boosting demand: a shift to bigger cars. “The US is switching back to SUVs, and drivers are putting their hybrids up for sale, and you can count me as among the people who are happy about that,” Sparkman said. I thought that statement might need a reality check. Edmunds.com , which tracks vehicle sales, backed Sparkman up. (Edmunds is not at the conference in Doral.) “The data is very conclusive,” Edmunds analyst Jeremy Acevedo said. “SUV market share is at its highest ever level and our nation’s preference for utilities continues to grow. Hybrids and plug-ins have seen their market share tumble to the lowest levels since 2011. It’s important to note that in this SUV renaissance, the soaring popularity of more efficient compact SUVs are powering the segment to these record levels.” The one segment of the gasoline market where few are optimistic is premium product: the fuel at 91 octane and up. Many I am talking to here are saying the grade is dead or dying, with a few exceptions. In northern Florida and southern Georgia, I am told that many stations are eliminating premium gasoline. That also means 89 octane is gone at those stations, too, because you can’t have the 89 without the 93. At most fuel pumps, 87 and 93 are mixed just seconds before they reach your car to make 89. We’ll be preparing a story on this for Platts soon, as well as another story on what I like to call “the unicorn”: the ethanol-free gasoline at 93 octane about which we are hearing of pockets of strong retail demand. Meanwhile, BP is telling the people who buy its fuel to be ready to hold out longer in an era of cheaper crude, and to keep looking for positives. “Our view has been ‘lower and longer’ for oil, and now we have revised that to ‘lower and even longer,'” Dan Filo, BP’s Midwest US fuel supply manager, told attendees. http://everythingshale.com/news/2016/february/25/so-demanding-us-gasoline-marketers-zero-in-on-potential-future-growth-areas/ http://everythingshale.com/news/2016/february/25/so-demanding-us-gasoline-marketers-zero-in-on-potential-future-growth-areas/ Thu, 25 February 2016 07:00:14 http://everythingshale.com/news/2016/february/25/despite-dropping-more-initiatives-activists-haven-t-given-up-on-full-fledged-ban-on-fracking/ After abandoning a ballot initiative for a statewide ban on fracking in Colorado, activists have gone on to drop seven other proposals out of their original eleven anti-energy ballot measures. But despite dropping eight initiatives in total, a conference call hosted by the coalition of activists pushing these initiatives shows that their agenda hasn’t changed at all. They still want to ban oil and gas development across Colorado and see their remaining three ballot measures as the way forward. Kicking off the conference call was Karen Dyke, spokesperson for Coloradans Against Fracking (CAF), who recounted a series of recent anti-energy demonstrations organized by the group before she told participants: “None of these actions, as important as they are, is enough to halt this toxic industry .” (4:49 -4:58) From there, Dyke turned the call over to Tricia Olson, executive director of Coloradans Resisting Extreme Energy Development (CREED), who discussed the so-called local control initiative the group is backing. And in a sign that CREED is interested in more than just a fight for local control, Olson told activists that the wording of this newest measure is akin to a “full-fledged” fracking ban: “This version however has one significant difference, what we would call a floor, not a ceiling language. To lift its points, it authorizes local governments to pass regulations — prohibit, limit or impose moratoriums on oil and gas development. Of course the word prohibit means ban. This allows for a broad range of local government options within their jurisdictions from local actions to a full-fledged ban. ” (23:14-23:44) One of the initiatives CREED is pushing is another veiled measure to ban fracking by dramatically increasing oil and gas setback requirements. Not only has a recent economic analysis found that this proposal could cost the state up to $11 billion in lost GDP a year and 62,000 jobs, but as CREED knows, it would effectively impose a fracking ban across large areas of Colorado’s energy producing regions, many of which now welcome energy development. While CREED shifts its focus to ballot initiatives that may sound more appealing to voters than an outright ban, the fact remains that they have the backing of national activist organizations like Food &Water Watch, 350.org and the Sierra Club. These organizations are demanding national and statewide fracking bans, including here in Colorado . In fact, according to The Colorado Statesman , F&WW is one of the “ major players behind the anti-fracking movement ” and “ played a key role in supporting initiatives to ban or delay fracking in local communities ” at the ballot box in November 2013. Expect more of the same as the campaign progresses – local-sounding talking points that mask a fringe national agenda to completely shut down oil and gas development across Colorado and the rest of the country. http://everythingshale.com/news/2016/february/25/despite-dropping-more-initiatives-activists-haven-t-given-up-on-full-fledged-ban-on-fracking/ http://everythingshale.com/news/2016/february/25/despite-dropping-more-initiatives-activists-haven-t-given-up-on-full-fledged-ban-on-fracking/ Thu, 25 February 2016 06:31:34 http://everythingshale.com/news/2016/february/24/the-next-stage-in-america-s-evolving-ethanol-landscape-targets-five-countries/ 2015 was a difficult one for US ethanol producers, prices came down from an eight year high in 2014 to a near-eleven year low in January of 2016. As with any market, when times are hard, it’s essential that players can adapt and evolve to keep business alive. So, eyes turn to export opportunities and to five countries in particular. Traditionally, once supplies reach around 20 million gallons, cargoes start getting booked. Supplies are currently at around 23 million gallons. With sustained record high production levels putting downwards pressure on domestic prices, at the most recent National Ethanol Conference in New Orleans, US ethanol industry participants were readily eyeing export opportunities to provide the market with a much-needed boost in the form of buyers, and ultimately, revenue. For both ethanol and biodiesel, rhetoric around the industry has shifted from a nearly one-sided focus on the Environmental Protection Agency (EPA) and Renewable Fuel Standard (RFS) to now touting the benefits of other biofuels. For biodiesel, it was touting its ability to reduce carbon emissions; for ethanol, it’s the benefits for octane-boosting. The change is due, partly, to the fact that the new blending mandates are in place now, giving some stability and allowing both industries to focus on other aspects. However, the change in sentiment is also due to the fact that both fuels are at a disadvantage economically compared to fossil fuels. So, as a way to address this evolving landscape, the industry is lining up five countries as key to the US export market: Brazil, the Philippines, China, India and Mexico. As the largest buyer of US product, Canada is already a well-established market, requiring less business development. Blog entry continues below: Request a free trial of: Biofuelscan   Would you like to get a closer look at Platts Biofuelscan? Use the request a free trial link and we will send you 5 issues free for your review. Biofuelscan covers the latest worldwide biofuel news and prices and provides a daily summary of market events. Also included are price assessments for ethanol, ETBE, renewal identification number (RIN) biofuels and closing market price assessments from the Americas, Europe, and Asia. The big five Brazil : Conveniently located, Brazil offers the US an export market that can be accessed with relative ease. In 2015, Platts-Kingsman estimated that the US exported around 440.4 million liters of fuel ethanol to Brazil, second in imports of US product behind Canada and a 4% uptick compared with exports to the region in 2014. Participants have described the Brazilian ethanol market as being in a constant state of either “feast or famine.”  This supply uncertainty offers the US an opportunity to be the reliable constant supply of fuel into the country and it is one that US producers are looking to capitalize on. The Philippines : In 2015, the Philippines were the third-largest importer of US fuel ethanol, increasing their buying power by 6% from 2014 and importing around 270.3 million liters. The cost of shipping, easy logistics and good demand in the region make the Philippines an ideal destination for US product. The low cost of shipping to the area is key for sellers; one US producer said that it costs as much to take ethanol from Iowa to Seattle as is does to take product from the West Coast to the Philippines. With such a strongly established trade route, market participants were keen for this to continue over the coming years. China : Weighing in at No. 4 on the biggest importers of US fuel ethanol in 2015, China was the biggest mover on the list, increasing its imports by an astounding 1994% from 2014. As a country with a rapidly growing population, clamor is building from the widening band of middle classes to lessen the reliance on fossil fuels and improve air quality. Ethanol is seen as an answer to these calls, a positive sign for US exports. But the relationship is not an easy one. Most recently, China launched an anti-dumping probe into US DDGS imports, a by-product of ethanol, which saw imports fall by 9.6% month-on-month in December. The risk-reward premium of sending product all the way to China to potentially have it sit in a dock for an indefinite period of time is high. But when the going’s good, China is a veritable cash-cow of a market for US ethanol. India : Following his election in 2014, Prime Minister Narendra Modi increased the blending mandate for ethanol in India, moving from E10 in 2015 to E20 by 2017. But in 2015, India’s effective blend rate fell far below the E10 mandate, reaching just 4.34%, and the country lacks the capability to produce sufficient ethanol domestically to meet the requirement. Alongside the blending mandate, at the 2015 COP21 summit, India also announced plans to cut its CO2 emissions per unit of GDP by as much as 35% from 2005 levels by 2035. To do this, India will need external support, and imports, and the US will be a main contributor on both fronts. Mexico : At only ninth place on the list of importers, Mexico may not come across as an obvious country to focus energies on. But from 2014 to 2015, Mexico increased its buying of US ethanol by 14%, up to 116.2 million liters. The country, much like India, is going through energy reform and will need help to hit its mandates. They too lack the infrastructure to meet ethanol targets and the US is perfectly positioned, both geographically and logistically, to step up to the plate. http://everythingshale.com/news/2016/february/24/the-next-stage-in-america-s-evolving-ethanol-landscape-targets-five-countries/ http://everythingshale.com/news/2016/february/24/the-next-stage-in-america-s-evolving-ethanol-landscape-targets-five-countries/ Wed, 24 February 2016 23:01:00 http://everythingshale.com/news/2016/february/24/dimock-revisited-top-four-things-to-know-about-the-trial-underway/ Dimock, Pennsylvania, is back in the news this week as a federal trial, involving two families that have claimed Cabot Oil and Gas is responsible for water problems since 2008, gets underway. But as EID has noted on many occasions, the case in Dimock has long been put to rest as it was determined that fracking was not to blame and the Environmental Protection Agency’s (EPA) found in 2012 that the water there was safe. With the trial beginning this week, it’s worth re-visiting what’s occurred in Dimock over the last six years to make sure that folks have the facts. This will be the first post in a series on Dimock that EID will be producing as the trial continues over the next few weeks. Fact #1: The families suing Cabot apparently had water problems before drilling ever occurred According to the Scranton Times-Tribune , during opening remarks Tuesday, Cabot’s attorney, Stephen Dillard, said, “…evidence will show Mr. Ely reported problems with the water started in August of 2008 — one or two months before Cabot began drilling the wells in question . Equally important, he said, is that the contamination of the Elys and Huberts wells continues today, despite the fact Cabot shut down the gas wells in 2010.” (emphasis added) If this is in fact accurate, then the plaintiffs’ issues would pre-date any natural gas development from Cabot. This wouldn’t be surprising given the historic water conditions in Susquehanna County , where Dimock is located, in part due to there being “ no statewide construction or siting standards for private water wells .” In fact, just last year, a new study from Syracuse University looked at over 21,000 water well samples prior to drilling and found that , “…exceedance of at least one water-quality standard occurs in 63% of water well samples in NE Pennsylvania and 87% in the Western area.” Fact #2: The original Consent Order was based on Pennsylvania’s ‘presumption of liability’ As Reuters reported earlier this week, “According to court documents, the trial will bring to light a state law that assumes that a gas driller is responsible for water well contamination within 1,000 feet of a drilling site that develops within six months of drilling.” In other words, Pennsylvania law requires that a company be held accountable for any contamination within a certain number of feet from a well regardless of whether the company had anything to do with it. Therefore, because complaints were made following the drilling of its gas wells, and there were no baseline tests to compare water standards prior to that drilling, state law deemed that by default Cabot was accountable. As such, the Department of Environmental Protection (DEP) reached an agreement, or Consent Order, with Cabot that included settlements in some cases, water deliveries and/or treatment systems for the families involved, and an agreement to shut in wells and halt operations in a 9-square mile area in Dimock. In 2012, DEP determined Cabot had met the terms of the Consent Order and no longer had to deliver water. This is especially important in this specific court hearing considering that the families apparently had water problems before drilling ever occurred and would technically not have even qualified to be included in the original consent order, let alone to be able to hold Cabot responsible for their water issues. Fact #3: EPA declared the water in Dimock safe back in 2012 EID has a detailed factsheet on the EPA’s involvement in Dimock, but to summarize, following a request from Gasland director, Josh Fox, the EPA stepped into Dimock and tested the water at 60 homes. The agency concluded: On March 15, 2012, the EPA released its first round of water testing from 11 homes in Dimock, which “ did not show levels of contamination that could present a health concern .” On April 6, 2012, the EPA released more water sampling data from Dimock, indicating that the water does not pose a threat to resident’s health. All contaminates found are also naturally occurring. On April 20, 2012, EPA released yet another round of water testing data from Dimock. EPA concludes: “ This set of sampling did not show levels of contaminants that would give EPA reason to take further action .” The EPA released its final findings from Dimock on July 25, 2012, concluding: “ Overall during the sampling in Dimock, EPA found hazardous substances, specifically arsenic, barium or manganese, all of which are also naturally occurring substances, in well water at five homes at levels that could present a health concern. In all cases the residents have now or will have their own treatment systems that can reduce concentrations of those hazardous substances to acceptable levels at the tap. EPA has provided the residents with all of their sampling results and has no further plans to conduct additional drinking water sampling in Dimock .” The plaintiffs were included in the EPA’s testing. As State Impact reported , “Cabot’s attorney Stephen Dillard told the jury the contents of the Ely and Hubert water was naturally occurring and existed before the company began drilling. He said aside from the presence of bacteria, which no one links to gas drilling, the water is safe to drink, and that the scientific evidence will back this up . “The dots do not connect between the gas wells and the water wells,” he said in his opening statement to the jury.” (emphasis added) So, to recap: the plaintiffs water issue may have begun prior even to development, but regardless EPA testing back in 2012 deemed the water in the region safe. Fact #4: Water treatment systems were given to families that wanted them What’s interesting here is that the plaintiffs actually refused to accept the water treatment that was offered by the company and are the only two families that have yet to reach a settlement on the issue. When asked on the stand why treatment had been refused, according to State Impact, one plaintiff, Scott Ely, said , “ he didn’t accept the filtration system because he didn’t believe it would work .” Back in 2011, EID got a first-hand look at the water treatment systems that Cabot bought for families that were included in the original Consent Order issued by the DEP. In fact, EID even drank the water at one of the properties prior to it going through the treatment system Cabot had installed for the family in 2009, because, as the homeowner, Loren Salsman, indicated in a guest post for EID , the water issues had been resolved: “Obviously, I am happy with the treatment system, but ultimately I wanted the aquifer that feeds my well fixed. After a three month battle with DEP over their proposed water line from Montrose to Dimock to serve 18 of us with what DEP felt were methane impacted wells, Cabot and DEP came to an agreement that Cabot would take various actions (including specific well improvements) and providing all 18 families with treatment systems and a financial settlement worth twice our property values. My last two sample results show the methane in my well is back down to 7 mg/l, right back where I started and proving that issues can be successfully resolved .” Here’s Mr. Salsman explaining the situation and how the water treatment system works. Conclusion Regardless of this latest media attention the facts are unchanged. When a decision is rendered in this trial, perhaps the book will finally be closed on the Dimock saga. For those of us from Northeastern Pennsylvania, it will be a welcome relief to see such a beautiful community finally able to move on from the unwanted attention that has followed them for nearly a decade. Stay tuned to EID for more facts surrounding the last six years in Dimock as the trial continues. http://everythingshale.com/news/2016/february/24/dimock-revisited-top-four-things-to-know-about-the-trial-underway/ http://everythingshale.com/news/2016/february/24/dimock-revisited-top-four-things-to-know-about-the-trial-underway/ Wed, 24 February 2016 18:20:12 http://everythingshale.com/news/2016/february/24/epa-flip-flops-on-methane-pushes-costly-new-rule/ At the proceedings of the CERA Week conference today in Houston, Environmental Protection Agency (EPA) Administrator Gina McCarthy completely flip-flopped on EPA’s position on the success of voluntary measures by oil and gas producers to reduce methane emissions. As Wall Street Journal reporter Amy Harder tweeted, . @GinaEPA on oil, gas voluntary efforts to cut emissions: “Those efforts have not been as successful as w/ other industry sectors” #CERAWeek — Amy Harder (@AmyAHarder) February 24, 2016   EPA’s own data show otherwise – they show a dramatic reduction in methane emissions as shale gas production has soared: Let’s also not forget that in EPA’s last Greenhouse Gas Inventory, released in April 2015, the agency specifically credited a 38 percent drop in methane emissions since 2005 to voluntary efforts by producers.  From the  inventory : “The decrease in production emissions is due to increased use of plunger lifts for liquids unloading, from regulatory reductions such as reductions from hydraulically fractured gas well completions and workovers resulting from the 2012 New Source Performance Standards (NSPS) for oil and gas, and from a variety of voluntary reduction activities. The decrease in distribution emissions is due to a decrease in unprotected steel and cast iron pipelines and their replacement with plastic pipelines.” (emphasis added; ES-14) EPA also noted methane emissions from crude oil production fell largely through voluntary efforts  as well : “Since 1990, CH4 emissions from production of crude oil have decreased by 21 percent. This net decrease is due mainly to increasing voluntary reductions through Natural Gas STAR in the production segment. ” (emphasis added; 3-58) Voluntary efforts were also highlighted in EPA’s 2014 Inventory, which found methane emissions fell  16.9 percent  since 1990, with field production emissions falling more than 40 percent since 2006.  As EPA explained then about the drop in emissions , “The decrease in production emissions is due to increased voluntary reductions ,  from activities such as replacing high bleed pneumatic devices, regulatory reductions, and the increased use of plunger lifts for liquids unloading.  The decrease in distribution emissions is due to a decrease in cast iron and unprotected steel pipelines. Emissions from field production accounted for 30.7 percent of CH4 emissions from natural gas systems in 2012. CH4 emissions from field production decreased by 25.6 percent from 1990 through 2012; however, the trend was not stable over the time series-emissions from this source increased by 24.9 percent from 1990 through 2006 due primarily to increases in hydraulically fractured well completions and workovers, and then declined by 40.4 percent from 2006 to 2012.  Reasons for the 2006-2012 trend include an increase in plunger lift use for  liquids unloading, increased voluntary reductions over that time period (including those associated with pneumatic devices), and RECs use for well completions and workovers with hydraulic fracturing.”  (ES-14) Administrator McCarthy also claimed today that EPA’s 2016 Draft Inventory shows methane emissions are “ substantially higher ” than its previous estimates, strongly echoing the misleading work of the Environmental Defense Fund (EDF). What matters is not some arbitrary benchmark that’s higher or lower than a previous estimate.  What matters is the actual emissions rate and whether it is well below what is required for natural gas to provide climate benefits. Scientists – and indeed EDF itself – have long noted that natural gas has significant climate benefits as long as methane emissions are kept under  3.2 percent . The best available science, including EPA’s Inventory and numerous studies by EDF, clearly show this climate advantage: Further, even with slightly increased numbers in EPA’s 2016 Draft Inventory, natural gas systems still dropped from second to third place, behind landfills and enteric fermentation, on EPA’s list of largest methane emitters, as this chart shows: If anything, natural gas production, through fracking – and the voluntary measures put in place by producers – have done more to reduce greenhouse gas emissions than any other government scheme or regulation.  That’s why the Intergovernmental Panel on Climate Change (IPCC) has said that even taking into account methane emissions, natural gas, brought about by fracking, is an “ important reason ” for the United States’ significant decline in emissions. Considering EPA’s flip flop on voluntary efforts; the fact that methane emissions from oil and gas production have dramatically declined; and that other sources are quickly outpacing natural gas systems for emissions, the question becomes: is this push for new regulations about reducing methane emissions or about attacking the natural gas industry? http://everythingshale.com/news/2016/february/24/epa-flip-flops-on-methane-pushes-costly-new-rule/ http://everythingshale.com/news/2016/february/24/epa-flip-flops-on-methane-pushes-costly-new-rule/ Wed, 24 February 2016 14:31:27 http://everythingshale.com/news/2016/february/24/ihs-ceraweek-by-dismissing-opec-cut-did-saudi-minister-naimi-outline-the-path-to-one/ Saudi Oil Minister Ali Al-Naimi this week told a massive Houston crowd that the oil-rich kingdom wasn’t interested in solving the global market’s problems, telling them he saw no point in a coordinated production cut. While he said no cut, is that what he really meant? Maybe not. Many attendees at the IHS CERAWeek conference pointed out that while Naimi said he sees a coordinated cut as an entirely useless endeavor, he didn’t rule it out. “Perhaps he meant no cut … for now,” said Mohammed bin Hamad Al Rumhi, the oil minister of Oman, a non-OPEC country which has pledged to cut production by as much as 10%, or roughly 100,000 b/d, as long as OPEC members commit to the same in order to rebalance the market. Echoing the sentiments of several others at CERAWeek, Rumhi said Naimi’s comments leave open the possibility of a production cut at June’s OPEC meeting. “If circumstances change, this will change,” Jamie Webster, a senior director with IHS Energy, told Platts. “It’s not like this is done and there’s no more discussion.” In his comments, Naimi dismissed the use of a production cut since there was “less trust” that member countries would comply. “There is no sense in wasting our time seeking production cuts,” he said. Webster said this was a reference to compliance issues with a 2008 OPEC production cut. As he seemingly dismissed the purpose of a cut, Naimi backed an agreement to freeze production at January levels, which he called “the beginning of a process.” Naimi’s comments echo those made Monday by OPEC Secretary General Abdalla Salem El-Badri who called a proposal to freeze production a first step to attempt to counter a global supply glut and low prices and said more steps were likely if the freeze was successful. “This is a first step to see what we can achieve,” El-Badri said during a CERAWeek press conference. “Maybe if this is successful we can take other steps in the future, I don’t know.” Analysts said the most likely next step after a coordinated freeze would be a coordinated cut. Dave Pursell, managing director with Tudor, Pickering, Holt & Co., told Platts that Naimi may have been subtly, but publicly, offering OPEC members a deal: join the agreement to freeze production and Saudi Arabia can talk about a coordinated cut at the June meeting to counter $30/b oil. “You’ve got to quit adding before you can start subtracting,” Pursell said. “So part of that is [Naimi saying]: ‘You show me you’re not adding, then we can talk about subtracting.'” Matt Reed, vice president of Foreign Reports, a firm analyzing oil markets and Mideast politics, said Naimi’s comments show that Saudi Arabia is still willing to cut, they just do not want to pursue that path alone. “Naimi said a cut won’t happen but he was speaking generally, not specifically about Saudi Arabia,” Reed said in an email. “He has good reason to be skeptical about any cuts when the Iranians are promising to make today’s glut worse.” Iran, which is looking to ramp up production with the end of sanctions, has criticized the pact reached by Russia and Saudi Arabia, the world’s top two oil exporters, and OPEC members Venezuela and Qatar to freeze production at January levels if other key producers did the same. Reed said the freeze agreement represents an important first step since it shows that the world’s top producers are, at a minimum, focused on solutions to the oil price collapse and global supply glut. http://everythingshale.com/news/2016/february/24/ihs-ceraweek-by-dismissing-opec-cut-did-saudi-minister-naimi-outline-the-path-to-one/ http://everythingshale.com/news/2016/february/24/ihs-ceraweek-by-dismissing-opec-cut-did-saudi-minister-naimi-outline-the-path-to-one/ Wed, 24 February 2016 12:39:30 http://everythingshale.com/news/2016/february/23/pemex-s-balance-sheet-calls-out-for-investors-in-oil-gas-and-power-sectors/ Pemex, Mexico’s state oil company, is hoping that an infusion of capital from private equity firms and other foreign investors will help it stave off a pressing liquidity crunch. Pemex, which is going through a number of key reforms, is suffering from not only lower oil and natural gas prices, but also has had to increase its debt to fund outflows for taxes, duties and capital spending, all while seeing a roughly 6.7% year-over-year oil production decline. The company, which has a new director general and is responsible for providing close to 25% of the Mexican government’s annual budget from its operating cash flow, posted a $10 billion loss in the third quarter 2015, making it the 12th consecutive quarter in which losses were reported. In the first nine months of 2015 the company reported a loss of approximately $19.4 billion. In a late 2015 ratings action, Moody’s Investors Service said Pemex’s liquidity was “tight.” It said that in 2014 Pemex’s $9.1 billion of cash flow from operating activities “fell well short of covering $15.1 billion in capital spending outlays.” After noting that Pemex has or will have $11.8 billion of debt come due from the latter part of 2015 into and throughout 2016, while having an estimated $4.5 billion of cash at the end of 2015, Moody’s on Dec. 16 cut Pemex’s global scale senior unsecured rating one notch from A3 to Baa1. Said Moody’s, “The actions were prompted by Moody’s view that the company’s current weak credit metrics will deteriorate further in the near to medium term.” Down, but not out In early January, the Mexico City-based Pemex announced the layoff of as many as 10,000 oil service workers from its total work force of approximately 142,000, a rare thing in heavily unionized Mexico. The move was a cost-cutting measure, and more layoffs could follow. On Feb. 17, the Mexican Finance Ministry said the government would reduce spending this year by approximately $7.2 billion, or 0.7% of gross domestic product. Pemex, whose new Director General José Antonio González Anaya holds a Ph.D. in economics from Harvard and served until Feb. 8 as director general of the Mexican Institute of Social Security, is committed to cutting spending by $5.5 billion. The Pemex investment budget for 2016 is expected to be $17 billion, down from $22.5 billion in 2015 and $26 billion in 2014. For its 2016 budget, Pemex has reportedly used an average Brent crude price of $50/b. For the month of February, Brent has been trading in the $33/b range, while Mexico’s Mayan crude has been trading in the low-$20/b range. Pemex, which saw its average production fall to 2.266 million b/d in in the third quarter of 2015 compared to 2.429 million b/d in Q3 2014, will thus be more reliant than ever on partnerships with and investments by the foreign private sector as it tries to keep its opening of its oil, natural gas and power sectors on track. On Monday, President of Mexico Enrique Peña Nieto opened the IHS CERAWeek conference in Houston by assuring the energy-heavy audience that Mexico “will maintain the rhythm of contracts for hydrocarbon extraction” that it started two years ago. Peña Nieto said he came to Houston to announce that “the fourth call for bids of Round 1 will be issued in the first days of December, which corresponds to deep-water deposits.” On Tuesday, the Pemex chief González Anaya said at the same meeting in Houston that “two years ago there was just one oil company operating in Mexico. Now there are 30 contracts with 30 companies.” González Anaya said he was headed to New York to further discuss Pemex’s investment needs with Wall Street bankers. Active private equity and foreign investors Pemex, which was formed in 1938, has stayed clear of foreign investors for more than 70 years. Over the past 12 months, though, a number of transactions have been announced that reflect a significant break from the past. One deal announced originally in May 2015 took shape last week. Bankers for the private equity firm KKR launched a $1.35 billion package of three loans and a credit revolver that would fund a sale lease-back agreement that involves an assortment of energy infrastructure assets owned by Pemex. While KKR declined Monday to identify the assets, it did not dispute earlier press reports that 11 pipelines in Mexico, a set of subsea cables, two non-drilling platforms and one gas compression facility are to be bought by KKR from Pemex and then leased back to the oil company for a 15-year period. At the end of that time, Pemex will buy back the assets from KKR. Analysts have described the lease-back deal as a way for Pemex to monetize assets and use the proceeds to either pay down debt or reduce its borrowing needs. Almost a year ago, in March 2015, private equity firm First Reserve and investment management firm BlackRock partnered with a Pemex subsidiary and eventually took a $900 million, 45% stake in the north and south sections of the 446-mile Los Ramones Phase II natural gas pipeline. Sempra Energy’s Mexico-based subsidiary IEnova offered in July to pay $1.325 billion for Pemex’s 50% stake in the natural gas pipeline joint venture Gasoductos de Chihuahua. In December, Mexico’s newly configured anti-trust unit, the Federal Economic Competition Commission, delayed the deal after determining that Pemex had not sold a stake in a liquefied petroleum gas pipeline as it had been required by the previous anti-trust agency. Some who have followed the recent Pemex moves have wondered, however, if the Mexican government’s ultimate intent is to break the company apart and privatize its parts. Given the long anti-foreign bias, that just feels like a step too far. http://everythingshale.com/news/2016/february/23/pemex-s-balance-sheet-calls-out-for-investors-in-oil-gas-and-power-sectors/ http://everythingshale.com/news/2016/february/23/pemex-s-balance-sheet-calls-out-for-investors-in-oil-gas-and-power-sectors/ Tue, 23 February 2016 23:01:04 http://everythingshale.com/news/2016/february/23/powering-the-post-cop21-world/ At COP21 in Paris last year, 196 countries agreed to take action to limit the world’s average rise in temperature to “well below 2 degrees Celsius above pre-industrial levels” while pursuing “efforts to limit the temperature to 1.5 degrees Celsius.” This global agreement is a major step in addressing climate change. It provides a clear and necessary framework to deal with the challenge. Yet, the transformation to clean energy production cannot be achieved overnight. It will take increased R&D, innovation and an alignment of incentives to deploy existing technologies more rapidly and accelerate the transition to the New Energy World. Fossil fuel producers need to play a key role in this industry transition and in the New Energy World . By increasing their efficiency and optimizing their resource and asset management, they can significantly reduce their carbon emissions and increase their revenues. Through digitization our modeling shows that a refinery can increase revenue by 1% just by optimizing its generation assets. The bridge to a low carbon world will be facilitated by the increase in natural gas use. The International Energy Agency (IEA) has designated natural gas as the “least carbon-intensive fossil fuel” and recommends gas to play a foundational role in reaching global climate goals.  The Oil & Gas industry has taken note as natural gas has already become the fastest growing major fuel in industrialized nations and rapidly gaining market share in the all-important developing world, rising to 22% from 16% since 2000 of energy consumed in poor nations. Staying ahead of the competition is important in every industry, so forward thinking energy producers will remain leaders by investing more in asset management optimization. Focusing on process automation, digitization of their industry as well as renewables and the emerging technologies needed to speed their availability and integration into the grid will also result in a better bottom line. As countries around the world move forward with realizing their COP21 goals for a low carbon future, every industry has the opportunity to play a leadership role. Energy producers can apply efficiencies in their own operations and systems which can see them become role models to their customers. Leading by example results in the ability to influence and encourage stakeholders who can promote energy efficiency measures at their customers’ premises, whether in industry, commercial buildings or residential.   The post Powering the Post COP21 World appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/february/23/powering-the-post-cop21-world/ http://everythingshale.com/news/2016/february/23/powering-the-post-cop21-world/ Tue, 23 February 2016 19:36:30 http://everythingshale.com/news/2016/february/23/university-of-texas-energy-poll-finds-increasing-support-for-fracking/ According to a new poll from the University of Texas (UT), American support for hydraulic fracturing (fracking) is increasing while opposition to the process has declined. Surveying 2,043 Americans on a wide range of energy issues, the latest UT Energy Poll shows support for fracking is greater than opposition by a 10 point margin. As the press release states: “Of those who say they are familiar with the technology [hydraulic fracturing], 47 percent approve of its use, compared to 41 percent last fall; 37 percent oppose fracking, compared with 43 percent in September.” In addition to finding more Americans are in favor of fracking, the UT poll shows U.S. energy independence and energy security are among the nation’s top concerns. According to the survey, dependence on the Middle East oil and gas ranks second only to terrorism in terms of Americans’ top energy concerns. With almost half of those polled listing energy security as a main concern, it’s no wonder fracking is gaining support. Thanks to technologies like fracking and horizontal drilling, the United States became the top combined producer of oil and natural gas globally in 2014, greatly lessening our dependence on foreign oil. Continued innovation in fracking has helped the US record a trade surplus with the Organization for Petroleum Exporting Countries (OPEC) for the first time ever . Additionally, with these technologies increasing the amount of oil produced from each well, domestic oil output has only dipped slightly, even as rig counts have fallen from their record highs. Even the OPEC secretary-general recently conceded the cartel doesn’t know how to handle the flood of US crude unlocked by fracking. The impact of hydraulic fracturing on the environment is the topic of least concern in terms of consumption for Americans, the survey finds, with the cost electricity ranking as the greatest concern. This could further explain the increasing support for fracking, as cheap natural gas from fracking decreased wholesale electricity prices 27-37 percent across the country in 2015, compared to 2014. Finally, the poll shows American still associate oil and natural gas production with jobs. When asked about the benefits of domestic natural gas production, 68 percent put job creation as the top benefit, with lower costs and providing energy security ranking second and third at 66 and 65 percent, respectively. Moreover, of all energy sources considered in the poll – oil, renewables, natural gas, coal, and nuclear – oil was mentioned as the resource that most contributes to U.S. jobs. As this UT Energy Poll shows, with all of the benefits the technology provides, the facts about fracking are becoming harder to deny. http://everythingshale.com/news/2016/february/23/university-of-texas-energy-poll-finds-increasing-support-for-fracking/ http://everythingshale.com/news/2016/february/23/university-of-texas-energy-poll-finds-increasing-support-for-fracking/ Tue, 23 February 2016 17:01:36 http://everythingshale.com/news/2016/february/23/uncovering-hidden-value-in-the-oil-patch-with-graded-acreage-infographic/ E&P companies spend millions of dollars scouting locations for, engineering, and drilling new wells. The hope is that those millions of dollars’ worth of planning and analysis result in high returns. Of course, that doesn’t always happen. In low price markets, the stakes are higher than ever. The same high-price wells that used to bring in 50% returns might lose money if they were drilled in the current environment. It’s not enough to be “close enough” to a sweet spot. Perfectly engineering a well doesn’t guarantee good returns either. You need to start with high quality acreage if you want to make money. How can you be confident that you’re drilling in the best possible acreage? Many subsurface maps provide only rough estimates of acreage quality. Building your own map would take an enormous amount of time and resources and wouldn’t be scalable anyway. This is where Graded Acreage comes in. The proprietary Drillinginfo Graded Acreage system maps subsurface quality down to the single square mile. By isolating the impact of reservoir quality on production, regardless of how a well was drilled or completed, Graded Acreage provides an accurate look at the subsurface. Visualize where the sweet spots differentiate from the fringe areas. Acreage is rated on a scale of A-J so you can easily compare the relative quality of land across a play. So what if you find open acreage in “high quality” land. What does that mean? How can you be sure that your expected production will offset your costs, even if you’re in an area that’s deemed high producing? With Graded Acreage, you can also predict expected production for a given grade of acreage. Benchmark other operators in the area to identify median production and how far above and below average some outliers are performing. Develop drill plans specific for each grade of rock to reduce risk and uncertainty around your expected ROI. Take a look at how we can help you uncover hidden value when you drill your next well. http://everythingshale.com/news/2016/february/23/uncovering-hidden-value-in-the-oil-patch-with-graded-acreage-infographic/ http://everythingshale.com/news/2016/february/23/uncovering-hidden-value-in-the-oil-patch-with-graded-acreage-infographic/ Tue, 23 February 2016 13:00:40 http://everythingshale.com/news/2016/february/18/better-oilfield-roi-using-advanced-statistical-analytics/ In a battle of the balance sheets, the black and white language of ROI is moving business forward. According to Bain & Company, forward thinking oil and gas teams that explore new and more advanced statistical analysis methods find themselves twice as likely to be in the top 25% of the industry’s financial performance metrics. They cite new statistical analysis of well optimization and geology for an uptick of 6-8% in production for these teams. To put that into perspective, that results in a net of about $200,000 in total revenue for the first six months of each well. This current climate demands companies to do more with less and the prescription has been to turn to big data to make better decisions, faster. With collateral used to secure 2013-2014 funding now valued at 30% of what it was, new venture deal flow will be way up as companies sell off assets to shore up their debt covenants around the April redetermination dates. Better data allows these evaluation teams to do the following: Reduce data prep time Increase internal efficiency in evaluation and presenting action plans Improve ROI by high grading not only acquisition asset values upfront but how to optimize them Each of these identified on most companies’ wish lists spills over into the next one. The challenge is getting deeper first looks on more deals or areas while at the same time taking minutes to come to a ‘vet or pass’ decision that could have taken months to arrive at in the past. Find Top Producers All Oil and Gas Exploration and Production (E&P) companies face the initial challenge of how to quickly benchmark existing production in the area as a proxy for what a new well or a recompletion of an existing well might produce. Let’s say you are part of a small, growing company looking to acquire a position in one of the unconventional plays. A quick look at average 2015 well performance in each play will get you started. Next, factor in well costs: in the top 2 plays, the average Eagle Ford well will run you $5 million to drill and complete, whereas its neighbor in the north, the Bakken, will cost a little over $7 million per well. With a small, lean company’s balance sheet in mind, the combination of higher average production and lower well costs lead to searching for acreage and prospects in the Eagle Ford. Perform Break-Even Analysis Looking at ROI analysis, you can highlight areas that match your company’s objectives within the play. At $30 oil, if you take the average 2015 Eagle Ford well and contrast that with the top quartile of operators in the area: The Oil EURs jumped 80,000 barrels ROI flipped from -11% to a 10% return You now have a list of wells that you can look at the geologic, geophysical, and completion designs to de-risk and optimize your company’s acquisition. Subsurface Taking the acreage along the La Salle and Dimmit County border, a new ventures shop can pull in ready-made geologic projects to identify what subsurface factors might be driving production in the tight cluster of top producing wells. This area is high-resistivity, has an API gravity of mid 40s, and enjoys a good lower Eagle Ford thickness of about 130 feet. This is all good news for our little shop. Tweaking Engineering Factors Top performing companies are turning to Multivariate statistics to incorporate and prioritize all the potential factors across their geologic, geophysical, and engineering models.  In our example, we have geologic variables and engineering variables from how the surrounding wells were completed. In a multivariate model of the area, the amount of proppant used sticks out as one with the most statistically significant effect on production. Companies are now able to ask what if? What if I pump 500 lbs per foot more proppant? What if I pump 500 lbs per foot less? With 5500 foot laterals and $0.15 per pound, that’s an additional cash outlay of $412,000 upfront, will it be worth it? Using the example area, statistically there is not enough of a return to pump more proppant but at the same time it doesn’t make sense pump less, as production would fall off dramatically. Results in optimization of any given factor, backed in black and white by statistics. Analytics make the Difference Big Takeaway: Savvy teams are finding the highest ROI by being able to break out of their traditional geographic areas and evaluate deals faster, with less prep time, with more certainty, and with a statistical approach that can soften the hearts of boardrooms and investors alike! Better, faster decisions! http://everythingshale.com/news/2016/february/18/better-oilfield-roi-using-advanced-statistical-analytics/ http://everythingshale.com/news/2016/february/18/better-oilfield-roi-using-advanced-statistical-analytics/ Thu, 18 February 2016 13:00:18 http://everythingshale.com/news/2016/february/16/why-texas-needs-lng-guest-post-by-ron-kirk/ The shale gas revolution has allowed the State of Texas – and our nation – to achieve a level of unprecedented energy independence. With the expansion of liquefied natural gas (LNG) exports – an abundant and clean energy resource, our country stands to achieve substantial economic opportunities, while more than meeting our need for energy both at home and abroad. LNG, the same natural gas used by more than 65 million Americans to heat their homes this winter, is natural gas converted to a liquid state in order to be safely and efficiently transported. LNG facilities, have been operated safely for more than 50 years, with an environmentally- and economically-sound record that remains the envy of other transporters of petroleum products. In the early months of 2013, ICF International, a global professional services firm, conducted a nonpartisan study to determine the economic impact of LNG on our nation’s economy and its effect in driving economic development in exporting communities. ICF’s study revealed that the LNG export industry could bring up to 155,000 jobs to the State of Texas by 2035, injecting tens of billions of dollars into our economy while enhancing the local tax base that funds schools, parks and other valuable public works and services in our communities. But LNG export terminals are long-term ventures requiring significant capital investments. In recent years, only five LNG export facilities have been approved or commenced the pre-filing process with the Federal Energy Regulatory Commission (FERC), representing a combined capital investment that could exceed $40 billion. Clearly, this is a great opportunity for Texas. Embed from Getty Images Not only are LNG export facilities poised to drive economic development in Texas communities, they will also advance U.S. national security interests by providing clean, safe energy to our allies abroad. Throughout the world, many of America’s allies are at the mercy of countries hostile to our interests to provide the energy needed to drive their economies. Exporting a small percentage of America’s vast supply of natural gas will not only narrow our trade deficit by billions of dollars and help our allies meet their need for clean energy and reduce their dependence on nations that do not share our values. Because of technological and industrial advances in the energy sector, the United States, with the help of the State of Texas, possesses enough natural gas to meet domestic demands in addition to the needs of the global market. Exporting a portion of our excess supply in the form of LNG will help U.S. allies combat energy challenges and diversify their energy resources, yielding a positive impact on our nation’s economy, international relationships and trade balance. By exporting LNG, the State of Texas has the opportunity to become the global hub for providing a source of clean, safe and reliable energy. Ultimately, LNG exports will yield significant economic benefits for Texas while also helping our friends abroad. Oil and gas exploration is one of Texas’ most established and valued industries, and the Lone Star State still stands to benefit from further diversifying its energy production. While LNG export is a new industry in the State of Texas, it represents a clean, safe energy resource for future generations. Expanding LNG exports will not only significantly increase energy output; it will bring billions of dollars of capital investment to our state, create thousands of jobs and yield millions of dollars in tax revenue while advancing our national security interests and providing opportunity and to Texas communities. Embed from Getty Images There is much to be gained from expanding LNG exports in the State of Texas. We have a unique opportunity to positively contribute to the economic development of our state, and it’s an opportunity we simply don’t want to miss. http://everythingshale.com/news/2016/february/16/why-texas-needs-lng-guest-post-by-ron-kirk/ http://everythingshale.com/news/2016/february/16/why-texas-needs-lng-guest-post-by-ron-kirk/ Tue, 16 February 2016 13:00:20 http://everythingshale.com/news/2016/february/11/can-conventional-ep-bring-the-next-generation-of-oil-fortunes/ Age demographics do not care about the price of oil. Whether oil is at $100/barrel or at $30/barrel, babies get born, people age and pass away, and when they do, their assets get passed on to their families, dear friends, favorite charities, or alma maters. This could be the great, untold story of the Great Crew Change – the massive transfer of mineral wealth that is happening each and every day. However, this article is not about that. Instead, we’re going to look at how the next generation of mineral wealth might be identified. The Current Unconventional Wisdom In the midst of the economic pain that all sectors of the fossil fuel are enduring, virtually all discussion has centered on how a price recovery will be shaped by the massive portfolio of unconventional wells that we have drilled. But, how will DUCS (drilled, uncompleted wells) moderate price appreciation as independent operators gauge their margins and IRRs and model when and where to complete and bring production into a precariously balanced market? Who has the available cash, or the access to financing, to engage in targeted acquisitions of seemingly attractive unconventional assets? Given the volatility in prices, how will they be allowed to book their assets, especially if much of their acquired acreage is in that never-never land between proved producing and proved undeveloped. How will banks that continue to finance energy clients set their loan covenants with their borrowers? How has the pace of innovation to best practices been slowed by the downturn in activity—since each well is an experiment that delivers and amplifies the knowledge base of the industry? And, most importantly, how do you model the price of oil—or at least constrain your price risks—given the huge numbers of independent variables that affect both demand and supply? If it’s that difficult to model, how do corporate risk officers control for the financial risk to their enterprises? The Conventional Option Maybe you don’t. Maybe you target your acquisitions toward conventional assets by focusing on economic drivers that require less financial engineering and which are more predictable. The universe of players is almost infinite in its complexity, ranging from financially responsible large companies to salvage buyers who may be looking for pre-plugging behind pipe potential. Therefore, the number of economic models will be dizzyingly varied, but some of the analysis processes used to identify opportunity can be constrained. Let’s set the following problem in terms of a very modest acquisition budget: I want to identify all producing leases in Texas that are producing between 20-50 barrels a day and which will have operating expenses below $10,000/month. I choose these constraints because operators with these metrics may be more likely to sell their producing asset base. Since cost information is notoriously hard to compile, we’re going to use the number of active wells as a proxy for operating costs, and so we have limited the query to currently producing leases with 1-4 active wells that are producing 20-50 BOPD. Here’s my map, courtesy of DI Desktop allocation option invoked)— In order to get a sense of where the best opportunities are, we’ve put them in a scatter plot and plotted, by Texas county with the EURS for each operated property. The scatterplot quickly illuminates the population of operated properties for each EUR level ( EUR=300,000BBL highlighted in turquoise), and which counties have rich spectra of EUR values (example in vertical pink box). If a prospector is interested in KS operated properties making between 100-500 BOPD with 5 or less wells and with TD’s less than 6000’, here’s the opportunity space: And to constrain my apparent opportunity set, I can see how thoroughly the areas that I’m interest in have been leased. These are but two examples of the kind of opportunity identification that acquisition minded operators or private equity interests could consider. There are many advantages to acquiring maturing conventional properties. The cost structure is known Any development drilling is cheap relative to horizontal drilling and completion operations The reserves are proved producing and therefore are immediately bookable They can be more nimbly managed in a time of price volatility A final point. The decline profile of unconventional wells is severe. This set of type curves by year in the Bakken shows the behavior Compare the Bakken decline behavior above to the performance of this well in the Utah hinge line play: Well-chosen conventional production has a longer producing lifetime, and will deplete the reserve base more slowly than unconventional properties will. And although it’s not as exciting on the front end of $100 oil, it’s way less painful than producing 50% of your reserve base when prices are massively depressed. http://everythingshale.com/news/2016/february/11/can-conventional-ep-bring-the-next-generation-of-oil-fortunes/ http://everythingshale.com/news/2016/february/11/can-conventional-ep-bring-the-next-generation-of-oil-fortunes/ Thu, 11 February 2016 13:00:32 http://everythingshale.com/news/2016/february/10/embracing-iiot-one-step-at-a-time/ What stands in the way of progress is not technology – it’s us. It’s our desire to stay inside our comfort zone where we happily repeat familiar behaviors. If you remember my last blog , I challenged each of us to do something digital – something outside the comfort zone of our analog upbringing. This morning I boarded a plane with an electronic boarding pass on my smartphone. A small step for a digital native, but a huge one for me! So, the technology is a given, which means it’s all about our attitudes and willingness to accept change. We’ve talked before about the evolution of IIoT – this includes evolving not only behaviors and attitudes but also business processes. IIoT invites us, requires us – dare I say demands us – to be more agile and more entrepreneurial. It’s classic market disruption – where barriers to entry are broken down and new entrants will eat your lunch if you don’t respond quickly enough. When it comes to IIoT I believe that often companies in our industries already have the required skills in place. What’s needed is a new approach – perhaps a “startup” mentality. But I don’t think you have to be a start up sized company to do this. A recent article on Automation.com by Editor Bill Lydon explored the use of Amazon cloud in the process industry. Amazon and “process industry” in the same sentence – who would have believed that a few years ago? And yet, it demonstrates my point – new start ups and also big players that have the discipline to command the agility needed for this evolution are heading our way. So what to do? First, accept that IIoT is here, and here to stay. If you don’t make best use of the technology then your competitors will, and it will not be pleasant for you. Second, break down the “not invented here” mentality – embrace new technologies, implement change management programs to adapt work practices and start capitalizing on the advantages technology can deliver. Don’t be afraid to invest in IIoT. Yes, there’s a lot of hype surrounding IIoT and you have to filter to find what’s right for your business. And yes, for many companies, in particular those in hard hit sectors such as Oil & Gas and Mining Metals & Minerals and those in struggling geographies like China, investing in anything is a difficult sell right now. But one of the promises of IIoT is the ability to get more out of your assets and your people. If we focus our investments in asset performance management and in the augmented operator I believe many of these investments will have relatively short payback periods. There’s a lot of slideware and noise attached to IIoT right now. For many companies it will be about starting small and building reference cases that demonstrate real value. I really believe this is the right path for many conservative industries. The other points I would make are these:  find your first projects on less than mission critical processes, institute a change management process and give it the time and attention it deserves. A good project will justify kicking off another project or two, and eventually you may find yourself with a whole IIoT-based project management office. And, if possible, bring along an accountant from the finance department to quantify the savings and benefits – verifiable payback on a proven test case speaks far, far louder than any PPT! Read more about how we’re embracing IIoT innovation here .   The post Embracing IIoT One Step at a Time appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/february/10/embracing-iiot-one-step-at-a-time/ http://everythingshale.com/news/2016/february/10/embracing-iiot-one-step-at-a-time/ Wed, 10 February 2016 13:13:00 http://everythingshale.com/news/2016/february/09/opening-the-door-to-innovation-the-api-era/ Over the last several years the tech industry has seen the emergence of the API economy resulting in an explosion of innovation. Every notable tech company from Microsoft, to Apple, to Google uses API’s to enrich their products and spur innovation. So what are APIs, and why should the Oil & Gas industry care about them? API stands for application programming interface. To put it simply it is the modern day Rosetta Stone which allows for applications like the ones you run on your smart phone to easily communicate or “interface” with a pool of data or another application. If you have ever used Yelp reviews in Apple Maps or have been rerouted by Google Maps due to an accident reported by Waze then you have benefited from the power of API’s. The Oil & Gas industry should care because this innovation engine is now available to them with Drillinginfo’s release of its new API: Direct Access. DI Plus subscribers can now tap into constantly updated proprietary intelligence faster and easier than ever before. This window into Drillinginfo’s intelligence will start with 1.5 million permits spanning 32 states and daily updates on 95% of the U.S. rig fleet. This will grow in 2016 to include wells, completions, production, directionals, and leases. WHAT WILL YOU BUILD The real power of Direct Access really comes alive with your creativity. Imagine the opportunities for fast and unique analysis of merged Drillinginfo proprietary data and your internal datasets. Imagine the mobile apps that you will build to make your team more productive and make decisions faster. With each update the possibilities grow and are limited only by your imagination. While competitors waste time seeking updated datasets and spend hours exporting and importing them into their internal warehouse you will be on your way to real business outcomes. With the fall of oil prices margins are getting thinner and everyone is feeling the pinch, but companies that see this as an opportunity to become more efficient and drive innovation further will be the future leaders of the industry. Direct Access is a new engine for innovation that will transform workflows and empower companies to compete in any priced environment. What will you do with it? As Thomas Edison said, “There is a way to do it better – find it.” Learn more about getting started by checking out this demo:   http://everythingshale.com/news/2016/february/09/opening-the-door-to-innovation-the-api-era/ http://everythingshale.com/news/2016/february/09/opening-the-door-to-innovation-the-api-era/ Tue, 09 February 2016 13:00:20 http://everythingshale.com/news/2016/february/05/falling-prices-increases-importance-of-secure-and-continuous-oil-and-gas-production/ The effects of crude oil prices can be felt around the world. The price of oil is near to an eleven-year low, and analysis by data trader Daryl Guppy, who writes for CNBC , predicts that the current trends might mean “prices have further to fall.” This current period of falling oil prices is challenging for everyone involved. In our complex industry, which has continuous improvement in its DNA, there’s no single problem and therefore no silver bullet solution. Besides meeting the challenges presented by the geopolitics of oil production, companies must still address matters including the safety and productivity of its people, the protection of the environment as well as process and facility equipment, production availability and increasingly today, information and data. Technology has long been seen as the way to improve the economics of production and help the industry weather lower oil values. Technology developments that are focused on improving efficiency and productivity have therefore drawn significant attention. Enhancing productivity and efficiency is a pervasive requirement that affects upstream, midstream and downstream operations. It’s no surprise that new themes like the Internet of Things (IoT) and edge computing are anticipated to make a major impact on oil producing companies and their service providers. Increased intelligence throughout the process workflow, more accurate and granular data collection and analytics, and higher levels of automated decision making and control, will help companies establish new benchmarks in efficiency and productivity. In the search to optimize production costs, increasing dependence on data and analytics puts a fresh emphasis on power reliability and continuity throughout the processing supply chain. Without power, all operations, safety and the environment are compromised. And while downtime is expensive (a single hour’s outage at a large production or transmission facility in the Oil & Gas space is said to cost at least $1.5M in lost revenue), damage to a company’s reputation can be even more costly. One must always consider that in this business, there’s no such thing as a minor ecological incident. At the same time, ensuring safety while enhancing productivity and efficiency is no small feat. It becomes even more significant when attempting to do so with falling product prices. The new reality is that we must all search for ways to achieve more while using less of our planet resources. Technology and information is making a difference in the oil and gas industry. And today’s UPS solutions for onshore and offshore operations, transportation and storage, and processing, refining and distribution are helping to power this change. As a company which has enjoyed a close association with the Oil & Gas industry, Schneider Electric has worked hard to establish collaborative working relations and partnerships with companies in the sector. To provide the right technology for facilities and to service and upgrade these applications over the lifespan of the installation, our experts establish an upstream analysis of customer needs. This forms the basis for a UPS solution including auxiliary equipment that is sized, designed and delivered according to customer specifications, including fully customer-specific requirements. To learn more about Schneider Electric’s Oil & Gas offerings, please click here .   The post Falling Prices Increases Importance of Secure and Continuous Oil and Gas Production appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/february/05/falling-prices-increases-importance-of-secure-and-continuous-oil-and-gas-production/ http://everythingshale.com/news/2016/february/05/falling-prices-increases-importance-of-secure-and-continuous-oil-and-gas-production/ Fri, 05 February 2016 13:00:14 http://everythingshale.com/news/2016/february/4/remember-when-ban-fracking-groups-touted-the-climate-benefits-of-natural-gas/ Anti-fracking groups like 350.org and the Sierra Club may now fly across the country to appear at “ local ” rallies in Ohio and Colorado shouting “keep it in the ground” and “ban-fracking now,” but it wasn’t that long ago that these same activists were fighting for more power plants to switch to natural gas because of the substantial climate benefits . Perhaps the best example of this is the 2009 rally at the Capitol Power Plant when environmental groups from around the country descended on Washington, D.C. “ demanding that the plant switch from coal to natural gas power .” Among the 100+ groups who joined the march include 350.org, Center for Biological Diversity, Clean Water Action, Earth Friends Wildlife Foundation, Greenpeace, Ohio State Environmental Coalition, and the Ohio Valley Environmental Coalition. According to  TIME  magazine, anti-fossil fuel activist and former director of 350.org Bill McKibben was even willing to get himself arrested in efforts to get the power plant switched to natural gas.  As he said in the build up to the protest:  “There are moments in a nation’s—and a planet’s—history when it may be necessary for some to break the law … We will cross the legal boundary of the power plant, and we expect to be arrested.”  http://goo.gl/B8EDc “[I]t would be easy enough to fix. In fact, the facility can already burn some natural gas instead, and a modest retrofit would let it convert away from coal entirely. … It would even stimulate the local economy.”  http://goo.gl/K8TVT Not long after that, in 2010, McKibben published his book “ Eaarth ” in which he claimed he supported natural gas: “Sometimes the news is a little better … the last year has seen new discoveries of natural gas that could help wean us off dirtier coal.” “And lately, at least in the United States, we’ve found some new supplies of natural gas, which is a good “bridge fuel” between dirty coal and clean sun.” Of the groups that marched in the rally, the Sierra Club especially stands out for its spectacular about-face on natural gas. In 2009 the group joined the rally at the Capitol Power Plant and proclaimed , “The Architect of the Capitol could easily — and instantly — convert the Plant back to ‘natural gas only’ power production.” As one Wall Street Journal story explained in 2009, “The national Sierra Club is one of natural gas’s biggest boosters. Carl Pope, the Sierra Club’s executive director, has traveled the country promoting natural gas’s environmental benefits, sometimes alongside Aubrey McClendon, chief executive of  Chesapeake Energy  Corp., one of the biggest U.S. gas companies by production.” Of course only a few years later the group launched its “ Beyond Natural Gas ” campaign, which describes fracking as “dirty, dangerous, and run amok.” The Sierra Club is also the organization that hired Al Armendariz, the former Region 6 EPA Administrator who became famous for declaring that his “general philosophy” was to “crucify” oil and gas producers and “hit them as hard as you can.” In other words, in 2009, Bill McKibben, the Sierra Club and many other groups were standing on the steps of the Capitol demanding that the power plant switch to clean-burning natural gas. Fast forward a few years to 2015 when Bill McKibben and his anti-fossil fuel coalition returned to the Capitol, this time to endorse U.S. Senator Bernie Sander’s “Keep-It-In-The-Ground” anti-fracking, anti-fossil fuel bill . Now, natural gas fired power plants, once a cause “worth going to prison for” is among the laundry list of infrastructure which supports of hydraulic fracturing, and is therefore, according to McKibben, no longer acceptable.  As he recently explained : “[N]o new fossil fuel infrastructure. None. The climate math is just too obvious.” Significant emission reductions from Capitol Power Plant, thanks to natural gas The climate math is just “too obvious”? Let’s take a look at the math for the Capitol Power Plant as just one example. In discussing the switch to using more natural gas, the Architect of the Capitol (AOC) explained , [T]he benefit of installing the cogeneration plant over the current practice of importing electricity from a coal-fired power plant could be equivalent to reducing the amount of greenhouse gas emissions associated with the operation of 15,000 vehicles each year.” (emphasis added) In the four years since 93 percent of the Capitol Power Plant transitioned to natural gas , there has been an 80 percent reduction in criteria pollutants .  The AOC also notes that a 100 percent transition to natural gas would “ limit NOx emissions by 78 percent ” and would “ have a much more dramatic impact on emissions regionally in the District of Columbia, Maryland, and Virginia. ” As Stephen T. Ayers of the AOC recently pointed out , the move to natural gas is, “The most cost-effective, energy-efficient and environmental-friendly solution to modernize the Capitol Power Plant.” He further explained : “The AOC is excited about the positive benefits of cogeneration at the CPP, as are other government organizations and public entities that recognize the benefits of this technology in providing clean, efficient and reliable energy. “ And this is just one example of what’s going on across the country. Even the U.N. Intergovernmental Panel on Climate Change  has credited the fracking boom and the conversion of power plants to natural gas as “an important reason for a reduction of GHG emissions   in the United States.” The  Energy Information Administration (EIA)  said that natural gas use has prevented more than one billion metric tons of carbon dioxide   from being emitted from power plants in the United States, bringing U.S. greenhouse gas emissions to a  27-year low . So what’s changed? One would think that folks like Bill McKibben and groups like the Sierra Club would celebrate this dramatic reduction in greenhouse gas emissions, thanks to the fuel they once advocated for. So what’s changed? Could it be that in 2009 the prevailing thought was that we didn’t have vast supplies of natural gas? What this goes to show is that these groups know the science is clear – because they once touted it. Their about-face on natural gas has nothing to do with the science and everything to do with an anti-fossil fuel agenda. http://everythingshale.com/news/2016/february/4/remember-when-ban-fracking-groups-touted-the-climate-benefits-of-natural-gas/ http://everythingshale.com/news/2016/february/4/remember-when-ban-fracking-groups-touted-the-climate-benefits-of-natural-gas/ Thu, 04 February 2016 13:40:22 http://everythingshale.com/news/2016/february/4/go-for-launch-the-space-race-for-mining-metals-from-asteroids-gains-more-focus/ The Luxembourg Government announced a series of measures on Feb. 3 that will boost asteroid mining and the visionary use of space resources, according to a statement from the country’s Ministry of the Economy. It’s the stuff of George Lucas, Jules Verne and James Cameron. Yes, James Cameron, the film director of Titanic , The Terminator and Avatar , among other Hollywood blockbusters — and who’s also backing a company called Planetary Resources Inc. In early-2012, Seattle-based Planetary Resources revealed that it planned to mine asteroids for raw materials, ranging from water to precious metals. Asteroids can contain iron, nickel, cobalt, water and platinum group metals (PGMs), often in significantly higher concentration than found in mines on Earth, noted the company. “We commend the Government of Luxembourg in leading the world by establishing this new resource industry, thereby enabling the economic development of near-Earth asteroid resources,” said Chris Lewicki, president and CEO of Planetary Resources, who added that his company “looks forward to working with Luxembourg.” Lewicki was closely involved with the lifecycle of NASA’s Mars Exploration Rovers and the Phoenix Mars Lander. Among the key steps, as part of Luxembourg’s spaceresources.lu initiative, “will be the development of a legal and regulatory framework confirming certainty about the future ownership of minerals extracted in space from Near Earth Objects (NEOs) such as asteroids.” The mission “is to open access to a wealth of previously unexplored mineral resources on lifeless rocks hurling through space, without damaging natural habitats,” said Etienne Schneider, Luxembourg’s Deputy Prime Minister and Minister of the Economy. “We will support the long-term economic development of new, innovative activities in the space and satellite industries as a key high-tech sector for Luxembourg.” Luxembourg already has a track record in related sectors, with satellite operator SES, established in in the country 30 years ago and now a major global player in its field. Targeting liftoff for platinum According Planetary Resources, a single 500-meter asteroid may contain the equivalent of all the platinum group metals mined in history. “Because PGMs are ‘iron loving’, when the Earth formed, they all gravitated towards the core,” Planetary Resources explains on its website. “As a result, platinum does not actually occur naturally in the Earth’s crust — all platinum mines on Earth today are the result of asteroid impacts or igneous magma chamber intrusions.” Right now, platinum holds strong enough value — about $860/oz — that Planetary Resources sees long-term potential to economically return platinum group metals to Earth. “Such access to a new, abundant supply source would disrupt current price levels and serve as a catalyst for significant innovation,” the company says. US also nearing the launch pad? In late November 2015, President Barack Obama signed the US Commercial Space Launch Competitiveness Act (H.R. 2262) into law. This law recognizes the right of US citizens to own asteroid resources they obtain and encourages the commercial exploration and utilization of resources from asteroids. “This is the single greatest recognition of property rights in history,” said Eric Anderson, co-founder and co-chairman of Planetary Resources at the time. “This legislation establishes the same supportive framework that created the great economies of history, and will encourage the sustained development of space.” Republican presidential contender Senator Marco Rubio of Florida also lauded the legislation’s passage last fall. “The reforms included here make it easier for our innovators to return Americans to suborbital space and will help the American space industry continue pushing further into space than ever before,” he said. “I’m proud the final bill includes proposals I had previously introduced in the Senate, including one related to commercial recovery of space resources. This bill is an important win for Florida’s space coast and the entire space exploration community.” China in the space resource race In 2013, China became the third nation to land on the surface of the moon. In recent days, the government has released some spectacular images from its Chang’e 3 lunar lander and rover. In 2017, China plans to launch the Chang’e 5 to land on the moon and return with soil samples. In 2018, China aims to land on the far side of the moon with the Chang’e 4. If successful, that mission would make China the first country to land there.  What’s more, according to reports, the 2018 mission will be the first one in the history of China’s space program to be partially funded by private investors. The US Apollo and Russian Luna missions revealed that several elements were in abundance on the moon — including iron, aluminum, titanium, manganese, magnesium, and silicon — which could explain commodity-hungry China’s race to the far side. And there are other proposed missions to the far side of the moon: the crowd-funded Lunar Mission One, and the Russian and European Space Agency jointly-planned Luna 27. If it all sounds far-fetched and far off, in the 1980s, how many of us thought we’d be talking into our watches or seeing cars drive themselves? http://everythingshale.com/news/2016/february/4/go-for-launch-the-space-race-for-mining-metals-from-asteroids-gains-more-focus/ http://everythingshale.com/news/2016/february/4/go-for-launch-the-space-race-for-mining-metals-from-asteroids-gains-more-focus/ Thu, 04 February 2016 13:28:33 http://everythingshale.com/news/2016/february/4/energy-news-roundup-shell-s-stock-rises-american-clean-energy-shift-on-track-mit-s-wearables-breakthrough/ Royal Dutch Shell shares rose after it confirmed it would cut 10,000 jobs and a sharp fall in annual profits. [ BBC News ] According to new data just released in the 2016 Sustainable Energy in America Factbook — a project of Bloomberg New Energy Finance, the shift from coal to clean energy may be occurring earlier than expected. [ The Washington Post ] An MIT lab has produced a device the size of a stamp that harvests energy from bending movements that could lead to a commercialisation for wearables. [ The Guardian ] http://everythingshale.com/news/2016/february/4/energy-news-roundup-shell-s-stock-rises-american-clean-energy-shift-on-track-mit-s-wearables-breakthrough/ http://everythingshale.com/news/2016/february/4/energy-news-roundup-shell-s-stock-rises-american-clean-energy-shift-on-track-mit-s-wearables-breakthrough/ Thu, 04 February 2016 13:00:40 http://everythingshale.com/news/2016/february/4/what-can-we-expect-from-a-saudi-aramco-ipo/ Muhammad bin Salmon, the Kingdom of Saudi Arabia’s (KSA) Deputy Crown Prince, has publicly stated his personal support for selling shares to the public in Saudi Aramco. Saudi Aramco Not likely To Include Petroleum Reserves In An IPO Khalid al-Falih, the Saudi Aramco Chairman, stated at the Davos conference last month that any offering would not include the company’s oil reserves . Not including any reserve information in a public offering means that the number shown in the Organization of Petroleum Exporting Countries (OPEC) data will continue as the KSA’s official public estimate of its oil reserves. Any Saudi Aramco public listing appears likely to include downstream and some exploration and production assets in the company. How Much Oil Does Saudi Arabia Own? The official OPEC report states that at year end 2014 the KSA had proven crude oil reserves of 266.58 billion barrels . The Society of Petroleum Engineers defines “reserves” as “the quantities that remain to be commercially produced as of a given date, under stated economic and operating conditions .” No Twilight In KSA Desert Anytime Soon Matthew Simmons generated significant controversy with the publication of “ Twilight in the Desert ” in 2006. The book prompted significant global debate around the concept of Peak Oil – a debate which has largely been settled with the unconventional tight oil revolution that demonstrates the paradigm changing opportunity that best in class technology and practices has brought to the exploration and production of oil and gas. How Much Oil Can Saudi Arabia Export? While estimates of ultimate petroleum recovery affect geopolitical and financial analysis of individual oil producing countries, the ability to export oil is a more significant driver of prompt global price. The KSA continues to internally consume a large percentage of its crude oil production. Some analysts believe that austerity measures in the KSA and slower economic growth generally in oil exporting countries will slow internal consumption, thus yielding a relatively higher percentage of future produced crude available for export than forecast in earlier years. The KSA has aggressively invested in downstream assets in North America to ensure long-term access for its crude oil exports. The KSA plans additional investment in downstream China assets as it fights for market share with Russia and other exporters. What Is The future Of Saudi Arabia? The KSA is currently undergoing more socioeconomic and economic change than any time in recent history. The substantial ongoing war and political violence throughout the Middle East has introduced a level of uncertainty to geopolitical assumptions regarding the future of the KSA. While taking shares in Saudi Aramco public will reveal greater economic transparency regarding assets tied to the share offering, not including any oil reserves means that reserve analysis will continue to look to self-reported data from OPEC and the KSA itself to estimate total global hydrocarbon reserves and estimate ultimate recovery. http://everythingshale.com/news/2016/february/4/what-can-we-expect-from-a-saudi-aramco-ipo/ http://everythingshale.com/news/2016/february/4/what-can-we-expect-from-a-saudi-aramco-ipo/ Thu, 04 February 2016 13:00:32 http://everythingshale.com/news/2016/february/4/ohio-s-pretty-amazing-utica-shale-brings-in-18-million-in-new-tax-revenues/ After just a handful of years in production, Ohio’s Utica shale is supporting initiatives at every level of the state’s government.  From maintaining local municipal roads, increasing sales tax revenues, and bolstering county and school budgets; millions upon millions of the dollars generated from oil and gas development are being poured back into the state. This week, the Akron Beacon Journal reported that the state has collected an additional $18 million from the oil and gas severance tax alone .  This is a 752 percent increase in just the last five years.  During this period, the largest jump in tax receipts was realized from FY2014 to FY2015, when revenues increased 261 percent, a 65 percent gain in just one year. Interestingly enough, even some of Ohio’s staunchest anti-fracking activists were taken aback by this news. Teresa Mills, spokeswoman for the based Center for Health, Environment and Justice, responded to the reported increase in tax revenue by saying :  “Wow! That’s pretty amazing…I know there are more wells on line and producing more, but that severance tax total is still shocking. … It’s not disturbing but it is just really surprising.” What’s also “pretty amazing” is the combination of increased  severance tax  revenue  and other taxes  generated from shale development. For example, last year EID reported that three counties alone – Carroll , Columbiana , and Harrison – have collectively brought in over $10 million in new taxes over the past few years.  At the same time, the s t ate of Ohio received over $50 million in NEW sales tax revenue, thanks in large part to oil and gas development . Just this week, EID spent some time in shale-producing Monroe County, and the local county commissioners told us that shale has brought their county’s economy back to life after suffering a devastating plant closure .  This plant was the largest employer in the county just a few years ago, and its closure meant that thousands of hard-working Ohioans were suddenly out of work, a development that sent the county into double digit unemployment.  Today, thanks to shale, the Monroe County has experienced sky-rocketing sale tax revenues , and is anticipating an additional $6 million from pipeline construction and operation. Monroe County Commissioner Mick Schumacker recently told EID, “It’s hard to imagine what would have happened to Monroe County had the oil and gas industry not started to develop when it did. When our largest employer, Ormet, laid off thousands of workers, the oil and gas jobs allowed our residents and workforce to move right into alternative employment without being forced to leave home and uproot their families.  Additionally, our county budget and funding for our schools would have been devastated, but thanks to shale, we were able to circumvent that situation entirely. We hope that with the new pipelines coming in and potential for greater development in our industrial park that we can see a rebirth in our county. The timing has been a real blessing for us all.” Like other elected officials in Ohio, Monroe County officials told EID that they are in talks to bring a new hotel, new grocery store, and more retail centers in as a result of the oil and gas development occurring along the Ohio River.  As we know, throughout the last few years, hotels have been popping up all across eastern and southeastern Ohio, which has meant an increase in bed tax revenue for local governments. Take look at Cambridge , Ohio where new hotels continue to be built in order to support the industry. In one year, the bed tax revenue generated in Cambridge increased by 60 percent going from $375,950 to $599,440 year-to-year. Even more astounding, in 2010, Marietta, Ohio saw its bed tax revenue increase from $517,580 to $1,128,491. That’s an increase of 118 percent! Shale operators also continue to support millions in road repairs via the Ohio’s Road Use Maintenance Agreement (RUMA) program. This program is in addition to the ad valorem taxes also paid by Ohio operators. EID recently conducted an economic analysis, which concluded that Ohio counties will receive an estimated $80 million in new tax revenues just from ad valorem taxes paid by operators over the course of the next few years. EID also recently reported projections from taxes yet to be realized from the entire pipeline infrastructure planned for the state, which once constructed and operating, will bring an estimated $256 million, per year. Collectively the revenue generated from the ad valorem tax, severance tax, sales tax, tax that is incurred from RUMA’s, and anticipated tax revenues from pipeline infrastructure, means that the state  is on pace to realize hundreds of millions in tax revenues. While this week’s report on severance tax is “pretty amazing” it accounts for only one of the many taxes that are paid by the oil and gas industry in Ohio. These revenues fund our schools, infrastructure, and drive our local economy in ways that we have not experienced in decades. http://everythingshale.com/news/2016/february/4/ohio-s-pretty-amazing-utica-shale-brings-in-18-million-in-new-tax-revenues/ http://everythingshale.com/news/2016/february/4/ohio-s-pretty-amazing-utica-shale-brings-in-18-million-in-new-tax-revenues/ Thu, 04 February 2016 12:40:45 http://everythingshale.com/news/2016/february/4/senate-blocks-energy-bill-as-debate-rages-around-flint/ The U.S. Senate voted Thursday to hold off moving forward on far reaching legislation designed to update the country's energy policies for the first time in almost a decade. What was a bipartisan bill became bogged down this week over amendments to include funding to aid in the cleanup of the contaminated water supply in Flint, Mich. Sen. Debbie Stabenow, D-Michigan, had requested $600 million be made available for Flint, pending a state review of the scope of the crisis due next week. But Republicans resisted such a large appropriation. It seems like we're putting the cart before the horse,†said Sen. John Cornyn, R-Texas. A large block of Democrats voted Thursday to stop the bill from advancing without a Flint amendment, winning 54-43. The move throws into question  a bill that sought to reform policies across the energy sector , from hydroelectric dams to home efficiency to defense against cyber attacks on the power grid. For the oil and gas industry, it would speed up the timetable on federal approval for liquefied natural gas export terminals, which drillers hope will ease what has become a supply glut in the United States, said Charlie Riedl, executive director of the Center for Liquefied Natural Gas. Party leaders said after Thursday's vote they would continue to negotiate the terms of the energy bill, including a amendment for Flint. We are confident we can work out the remaining issues through good-faith negotiations, including a solution for the water crisis in Flint,†Sen. Maria Cantwell, D-Washington, co-author of the energy bill, said in a statement. http://everythingshale.com/news/2016/february/4/senate-blocks-energy-bill-as-debate-rages-around-flint/ http://everythingshale.com/news/2016/february/4/senate-blocks-energy-bill-as-debate-rages-around-flint/ Thu, 04 February 2016 12:03:10 http://everythingshale.com/news/2016/february/4/duke-energy-puts-houston-based-international-business-up-for-sale/ Duke Energy will consider selling its Houston-based international business segment, the company said Thursday. North Carolina-based Duke, which is the nation's top power generator, currently runs its Central and South American power plants from Houston. Duke is in the preliminary stages of putting its international business up for sale, but hasn't yet considered any specific offers. Duke isn't saying much, but the company said it may provide more details during its scheduled earnings call on Feb. 18. Duke Energy International facilities include 4,400 megawatts of electricity capacity in power plants in Argentina, Brazil, Chile, Ecuador, El Salvador, Guatemala and Peru. Two-thirds of the power plant portfolio is hydro power and half are located in Brazil. As of a year ago, Duke was the fourth-largest private generator of electricity in South and Central America based on net capacity. Duke is not planning to sell its 25-percent stake in Saudi Arabia-based National Methanol Company, which produces methanol and methyl tertiary butyl ether, called MTBE, which is a gasoline additive. http://everythingshale.com/news/2016/february/4/duke-energy-puts-houston-based-international-business-up-for-sale/ http://everythingshale.com/news/2016/february/4/duke-energy-puts-houston-based-international-business-up-for-sale/ Thu, 04 February 2016 10:44:08 http://everythingshale.com/news/2016/february/4/t-boone-pickens-cashes-out-on-oil-awaits-time-to-get-back-in/ Oil tycoon T. Boone Pickens, who made and lost fortunes targeting some of the largest U.S. crude explorers over the past 40 years, has cashed out as the worst crude market downturn in decades drags on Pickens has sold all his oil holdings and is waiting for the best moment to get back in, he said Thursday in an interview on Bloomberg Go.†Crude prices have slumped 70 percent since June 2014, leading the oil industry to eliminate more than 250,000 jobs and slash over $100 billion in spending in the last year, with more cuts expected this year. Pickens started reversing course in the third quarter by slimming down his energy holdings and selling several stocks he'd bought just three months earlier, according to data compiled by Bloomberg. http://everythingshale.com/news/2016/february/4/t-boone-pickens-cashes-out-on-oil-awaits-time-to-get-back-in/ http://everythingshale.com/news/2016/february/4/t-boone-pickens-cashes-out-on-oil-awaits-time-to-get-back-in/ Thu, 04 February 2016 09:51:16 http://everythingshale.com/news/2016/february/4/statoil-reports-larger-4th-quarter-loss-after-oil-price-drop/ HELSINKI (AP) — Norwegian energy group Statoil posted a net loss of 9.2 billion kroner ($1.08 billion) for the fourth quarter amid the drop in oil prices. Norway's biggest oil company said Thursday the quarterly results continue to be severely influenced by low prices,†adding the loss was 3 percent larger than a year earlier. Revenue fell to 109.2 billion kroner from 147 billion kroner. CEO Eldar Saetre said the company was stepping up its cost-cutting program and reining in spending. Average daily production of oil and gas decreased 2 percent to 1.309 million barrels per day in the quarter. Statoil ASA said the drop was mainly due to expected natural decline on mature fields, lower gas sales and redetermination, partially offset by increased production from several fields and ramp-up of new fields.†http://everythingshale.com/news/2016/february/4/statoil-reports-larger-4th-quarter-loss-after-oil-price-drop/ http://everythingshale.com/news/2016/february/4/statoil-reports-larger-4th-quarter-loss-after-oil-price-drop/ Thu, 04 February 2016 09:04:04 http://everythingshale.com/news/2016/february/4/courts-states-begin-the-debate-on-rights-of-nature/ In 1972, Christopher Stone, a Harvard law professor, proposed the thoughtful rationale Should Trees Have Standing?†to explore the topic of potential rights of nature from a legal perspective. He opined that rivers and trees and other objects†of nature have rights and that these should be protected by granting legal standing to guardians of these objects. This argument resonated with then-U.S. Supreme Court Justice William O. Douglas, who argued in a dissent in the case of Sierra Club v. Morton that standing should be given to natural entities so that successful legal claims might be made for their preservation. While the idea of the rights of nature is not new, it has only recently begun gaining momentum, spurred by Ecuador's addition of provisions to ensure the rights of nature to its constitution in 2008.  The concept is generally defined as the recognition and respect for the idea that natural ecosystems (including trees, oceans, animals, mountains, and other living or non-living entities in nature) have legal rights specifically, to exist, persist, regenerate, and maintain their vital cycles.  Accompanying this right is the legal authority and duty of humans to enforce these rights on behalf of nature. The Concept of Rights of Nature Gains Traction  Ecuador was the first sovereign nation to give legal recognition to rights of nature in response to proposed oil and mineral development in its rainforest areas.  In 2008, provisions to protect the rights of nature were added to the country's constitution, and validated a few years later when the rights of the Vilcabamba River were subsequently recognized in Ecuador's courts. The efforts in Ecuador to secure rights for ecosystems and other parts of nature are closely related to indigenous people's struggles for recognition of their rights and attempts to protect their traditional lands and ways of life. Bolivia has also enacted laws that provide nature and its features with rights.  Law 071, The Law of the Rights of Mother Earth, was spearheaded by indigenous and campesino (small-scale farmer) grassroots movements and has at its heart the directive that the state and any individual or collective person must respect, protect, and guarantee the rights of Mother Earth for the well-being of current and future generations. Adoption in the U.S. In the United States, environmental and rights-of-nature provisions have been increasingly adopted by local communities, often spurred by the desire to prevent certain activities and land uses with potentially high environmental impacts such as hydraulic fracturing oil and gas well development. After many of these local provisions have been struck down for being inconsistent with or overridden by state statutes, proponents for rights of nature have sought to have these principles enacted into state laws.  Pennsylvania amended its constitution to recognize environmental rights, and in Colorado, the state Supreme Court has approved a ballot petition that, if passed, would authorize municipalities to pass laws establishing the rights of nature. A Question of Standing Regardless of the extent of rights granted to nature, it must rely on human representation to assert and defend these rights in a court of law.  Accordingly, the initial threshold issue to be resolved is, who has standing to bring a legal action on behalf of nature? In the United States, various interest groups have attempted to bring legal actions as guardians of the environment. Often, these efforts have been thwarted at the outset for lack of standing to bring the lawsuit.  This is because the threshold for standing has been injury to the plaintiff bringing the legal action, not the injuries to nature and natural objects that the plaintiff is trying to prevent. The connection from personal harm to environmental harm that is sought to be prevented or remedied is often difficult to establish. Additionally, standing requires the plaintiff to demonstrate a personal stake in the outcome.  Personal stake often has little or no connection to the actual harm suffered by the environmental interest protected by the law. The movement toward establishing rights of nature attempts to solve the challenges of legal standing. In Pennsylvania, the state Supreme Court found that the state's constitutional environmental rights amendment gives municipal governments a duty to protect the public trust. In New Zealand, where the Whanganui River has been granted legal rights (personhood, with ownership of its river bed), both the government and the Maori have been designated guardians to ensure that the river's rights are protected. Ecuador's constitutional rights of nature are so broad that two foreign residents were able to successfully bring the Vilcabamba River lawsuit. Pandora's Box? If the rights of nature, as granted in law in countries like Ecuador and Bolivia, were enforced as envisioned, what real impact would this have on environmental protection?  It is possible that, if the issue of standing were removed for environmental nonprofit guardian†groups, courts could be overwhelmed with cases being brought by such organizations on behalf of various areas of nature.  Court victories by guardian groups under these provisions could be seen as giving de facto protection (through judicial precedent) to resources not protected by law specifically, but widely recognized by guardian groups and others as ecologically valuable. The lack of specific rights of nature court cases from which to draw an opinion leads to other questions would every creek, river, forest, and other resource then be protected via enforcement of its rights, or would this in reality only apply to natural objects that are extraordinary? The answers to these and other questions will continue to unfold as the idea of the rights of nature progresses. By Dusty Miller, Black & Veatch Published originally on Black & Veatch Solutions. http://everythingshale.com/news/2016/february/4/courts-states-begin-the-debate-on-rights-of-nature/ http://everythingshale.com/news/2016/february/4/courts-states-begin-the-debate-on-rights-of-nature/ Thu, 04 February 2016 09:00:05 http://everythingshale.com/news/2016/february/4/saudi-crude-oil-exports-show-continued-strength-to-us-asia/ Commodities are also getting whipsawed around by currency moves. As the US dollar continues to weaken due to growing pessimism about the US economy, crude is finding some support. After a speech by ECB President Mario Draghi earlier today lifted the euro to a three-month high, another round of poor data out of the US is putting further downward pressure on the dollar. Weekly jobless claims came in worse than expected, at 285k versus 280k expected, while preliminary US productivity data was also below par (i.e., not in good way like in golf). Weaker jobless claims are stoking concerns ahead of Nonfarm Friday tomorrow, and the official monthly unemployment report. According to Bloomberg Intelligence , some parts of the Eagle Ford and Permian Basins in Texas remain profitable at current price levels. The biggest producing areas in Texas are also the lowest-cost counties: DeWitt, Midland, Martin and Reeves have a combined output of 430,000 barrels per day. So while wells in the higher-cost counties such as Dimmitt have dropped precipitously, drilling activity has increased in the lower cost ones, such as DeWitt rising 77% from Q1 last year to Q3. Yet even in DeWitt, costs vary wildly : ~45% of wells drilled in 2014 would have been profitable with oil prices below $20, while 5% needed a price of over $70. This latest study from the EIA  is a great overview of US fuel consumption on the East and Gulf coasts. The East Coast (aka, PADD1) consumed 3.13 million barrels of gasoline in 2014, which is 35% of total US demand. The Gulf Coast (aka, PADD3) consumed about half that 1.45 mn bpd, some 16% of the US total. In terms of production, the Gulf Coast accounts for over half of US refining capacity, with 52 refineries producing 9.3 mn bpd in 2014, while the East Coast only meets 20% of its own needs via nine refineries, with pipeline flows, waterborne deliveries from the Gulf Coast, and foreign cargoes accounting for the rest. While optimism abounds for rising Iranian production, civil war in Libya means both its oil production and revenues continue to deteriorate. In the last few years, two rival factions have been fighting for control of Libya and its assets (oil accounts for 95% of state revenues). However, now the two rivals groups are trying to form a government amid increased attacks from the Islamic State. As the chart below illustrates, revenues from oil in 2014 were a quarter of what they were two years prior, given both the drop in oil prices and Libya's drop in production. Given both were again lower last year, revenues have surely been considerably bleaker. Our ClipperData show that waterborne crude exports last year were a quarter of what they were in 2013. Finally, Saudi Arabia, the world's largest crude exporter, has apparently cut its price for Arab Light into Asia for March. While some will interpret this as Saudi turning up the heat in the battle for market share in Asia, it more likely indicative of a lack of demand from the region. According to our ClipperData , Asia was the destination for 60% of Saudi's crude exports last year. In terms of individual countries, the US was the most popular destination for Saudi barrels, accounting for 16% of exports. Japan was second (15%), then China (13%), India (10%), then South Korea (10%). http://everythingshale.com/news/2016/february/4/saudi-crude-oil-exports-show-continued-strength-to-us-asia/ http://everythingshale.com/news/2016/february/4/saudi-crude-oil-exports-show-continued-strength-to-us-asia/ Thu, 04 February 2016 08:46:36 http://everythingshale.com/news/2016/february/4/occidental-posts-losses-of-more-than-5-billion/ HOUSTON - Occidental Petroleum Corporation announced a fourth quarter loss of $5.18 billion on Thursday after the company to wrote down the value of its oil and gas businesses by billions of dollars. The Houston-based oil and gas producer said it booked a total of $5.4 billion of after-tax charges, mostly due to cheap oil eroding the value of its assets. Occidental CEO Steven Chazen said the company has about $4.4 billion in total cash on the balance sheet and plans to guard its remaining funds carefully. We continue to focus on capital and operating efficiencies, he said in a written statement. Our 2015 capital spending was down by 36 percent compared to a year ago, and total company production still grew by 14 percent with Permian Resources growing 47 percent. Occidental realized about $38.68 per barrel oil it produced in the fourth quarter of 2015, down 19 percent from the third quarter of 2015 and 46 percent from the fourth quarter of 2014. Still, the company managed to produce more. Total average oil and gas volumes grew by 75,000 barrels of oil equivalent to 671,000 BOE in the fourth quarter of 2014. Those figures exclude assets in the Williston basin, which Occidental sold in November. http://everythingshale.com/news/2016/february/4/occidental-posts-losses-of-more-than-5-billion/ http://everythingshale.com/news/2016/february/4/occidental-posts-losses-of-more-than-5-billion/ Thu, 04 February 2016 07:39:26 http://everythingshale.com/news/2016/february/4/conocophillips-cuts-dividend-posts-35-billion-loss/ HOUSTON - ConocoPhillips, the No. 3 U.S. oil company, announced a quarterly loss on Thursday and said it is cutting its shareholder dividend by two thirds, finally running out of tricks to protect the payout as it braces for a long downturn. The Houston oil producer said it lost $3.5 billion, or $2.78 a share, in the fourth quarter, down from its net loss of $39 million, or 3 cents a share, in the same period the year before. Its revenues sank 42 percent to $6.8 billion. While we don't know how far commodity prices will fall, or the duration of the downturn, we believe it's prudent to plan for lower prices for a longer period of time, ConocoPhillips CEO Ryan Lance said in a written statement. It lowered its 2016 capital spending guidance 16 percent to $6.4 billion as it reduces activity in U.S. shale plays, even as its crude production remains flat for the year. It also said it will cut its expectations for operating costs 9 percent to $7 billion. The dividend will be reduced from 74 cents a share to 25 cents a share, its first reduction in years. Even after ConocoPhillips spun off its refining business into Phillips 66 three years ago, it kept its dividend at the same level, giving shareholders a higher dividend yield than even its biggest oil-company rivals. Houston investment bank Tudor, Pickering, Holt & Co. said ConocoPhillips' dividend yield dropped from 7.7 percent to 2.6 percent on Thursday, trailing the 5-year average of 4.5 percent. But it is now in line with large independent producers that Tudor Pickering covers, the investment bank said. In the fourth quarter, the firm wrote down the value of its oil properties and exploration assets by $2.2 billion. It also took a restructuring charge  typically related to severance costs of $55 million. http://everythingshale.com/news/2016/february/4/conocophillips-cuts-dividend-posts-35-billion-loss/ http://everythingshale.com/news/2016/february/4/conocophillips-cuts-dividend-posts-35-billion-loss/ Thu, 04 February 2016 07:30:14 http://everythingshale.com/news/2016/february/4/conocophillips-ceo-oil-downturn-could-stretch-into-2017/ HOUSTON After announcing a big loss and dividend cut on Thursday, the CEO of ConocoPhillips proved more pessimistic than many analysts about the future of the oil market, telling investors the oil downturn could stretch into 2017. We believe this downturn could last a while longer,†ConocoPhillips CEO Ryan Lance said in a conference call. Just a few months ago, we thought the market would rebalance by the second half of 2016.†ConocoPhillips last year cut 10 percent of its global workforce, about 1,800 employees, trying to shield its dividend and its balance sheet against the pressures of cheap crude. But the oil-market crash has persisted beyond previous expectations and domestic crude has fallen close to $30 a barrel. That prompted ConocoPhillips to make the gut-wrenching†decision to cut its quarterly dividend by two thirds to 25 cents a share. We were not willing to risk a strong balance sheet on it,†Lance said. Marathon Oil Corp. and Chesapeake Energy Corp., two of the larger U.S. shale drillers, have also reduced their shareholder dividends. Its dividend yield was well above that of the average U.S. oil producer and ranked with the biggest oil majors. But the cushy payout was a relic of its past as an integrated oil company, as it had kept its dividend at elevated levels even after it spun its refining business into Phillips 66 three years ago. Lance said heightened concerns about global economic growth suggest it could take longer for crude prices to recover even after the oil market has corrected the oversupply. There's certainly a lot of debate about these factors but we can't bet on prices turning quickly,†Lance said. ConocoPhillips, the No. 3 U.S. oil company, also announced a quarterly loss on Thursday. The Houston oil producer said it lost $3.5 billion, or $2.78 a share, in the fourth quarter, down from its net loss of $39 million, or 3 cents a share, in the same period the year before. Its revenues sank 42 percent to $6.8 billion. While we don't know how far commodity prices will fall, or the duration of the downturn, we believe it's prudent to plan for lower prices for a longer period of time,†ConocoPhillips CEO Ryan Lance said in a written statement. It lowered its 2016 capital spending guidance 16 percent to $6.4 billion as it reduces activity in U.S. shale plays, even as its crude production remains flat for the year. It also said it will cut its expectations for operating costs 9 percent to $7 billion. The dividend will be reduced from 74 cents a share to 25 cents a share, its first reduction in years. Even after ConocoPhillips spun off its refining business into Phillips 66 three years ago, it kept its dividend at the same level, giving shareholders a higher dividend yield than even its biggest oil-company rivals. Houston investment bank Tudor, Pickering, Holt & Co. said ConocoPhillips' dividend yield dropped from 7.7 percent to 2.6 percent on Thursday, trailing the 5-year average of 4.5 percent. But it is now in line†with large independent producers that Tudor Pickering covers, the investment bank said. In the fourth quarter, the firm wrote down the value of its oil properties and exploration assets by $2.2 billion. It also took a restructuring charge — typically related to severance costs — of $55 million. http://everythingshale.com/news/2016/february/4/conocophillips-ceo-oil-downturn-could-stretch-into-2017/ http://everythingshale.com/news/2016/february/4/conocophillips-ceo-oil-downturn-could-stretch-into-2017/ Thu, 04 February 2016 07:30:14 http://everythingshale.com/news/2016/february/4/shell-profits-fall-56-percent-amid-oil-downturn/ HOUSTON - Royal Dutch Shell's profits fell 56 percent in the fourth quarter, its oil-production business hit hard by the market downturn but its refining and marketing side remained steady in the final three months of last year. Shell said Thursday it banked a profit of $1.8 billion, or 29 cents a share, in the fourth quarter, down from $4.2 billion, or 66 cents a share, in the same period the year before. The Anglo-Dutch oil major's upstream earnings fell 71 percent to $493 million, though the company said lower costs offset the plunge, while its downstream income dipped just 2 percent to $1.52 billion, partly the result of improving the unit's finances. Shell is within weeks of closing its $54 billion acquisition of British gas producer BG Group, a deal that CEO Ben van Beurden said will rejuvenate the company and improve shareholder returns. The company is planning to cut 2,800 jobs once the deal is closed and is restructuring its upstream business, cutting costs and spending. That would bring its headcount reduction since the downturn began to 10,000 employees and contractors. It cut its operating costs by $12.5 billion last year and is planning further cost-cutting this year. For the full year of 2015, Shell's profits sank 80 percent to $3.8 billion. http://everythingshale.com/news/2016/february/4/shell-profits-fall-56-percent-amid-oil-downturn/ http://everythingshale.com/news/2016/february/4/shell-profits-fall-56-percent-amid-oil-downturn/ Thu, 04 February 2016 07:13:11 http://everythingshale.com/news/2016/february/4/shell-prepares-to-remake-itself-into-gas-giant-after-bg-group-deal/ The CEO of Royal Dutch Shell says though it is working through a difficult oil-market downturn, the oil major will remake itself after it completes its $50 billion takeover of British gas producer BG Group this month. The acquisition, expected to close Feb. 15, will mark the start of a new chapter at Shell,†CEO Ben van Beurden told investors Thursday after reporting a 56 percent slide in fourth-quarter profits. The BG Group acquisition will boost Shell's natural gas reserves by a quarter. After the deal closes, Shell expects to spend more than $15 billion the biggest portion of its budget this year on deep-water oil developments and its integrated gas business, both of which were central selling points of the BG Group deal. BG Group has billions tied up in deep-water fields off the coast of Brazil and in liquefied natural gas trains in Australia, and van Beurden said he expects the next wave of energy production to come from 2016 to 2019 as projects come online. Integrated gas and deep-water, which have been growth priorities for Shell in recent years, will reach significant scale with its BG position included,†van Beurden said. Shell's LNG earnings halved in 2015 because LNG prices track crude prices, but the company remains hopeful because global demand for LNG has been growing at 8 percent a year over the last decade. Shell Chief Financial Officer Simon Henry acknowledged that the growth in demand for LNG appears to be slowing in China and other markets, but said by the next decade more countries will be buying LNG. Today, Henry said, 30 nations import LNG and 20 export it, but the number of importing countries is expected to grow to 50 by early next decade, while the number of suppliers grows to 25. The BG Group deal will come with big operational cuts, though. We're pulling on powerful financial levers to manage the company in the industry downturn,†van Beurden said. Shell will cut its budget, which will be combined with BG Group's, by $3 billion to $33 billion down by about 45 percent since 2013. Only $3 billion of that total will be spent on high-cost U.S. shale production and heavy oil projects in Canada and elsewhere. Shell will also cut $3 billion in operating costs and 2,800 jobs this year after the merger, and it's planning to sell $30 billion over the next two years. Shell's profits fell 56 percent in the fourth quarter, its oil-production business hit hard by the market downturn but its refining and marketing side remained steady in the final three months of last year. Shell said Thursday it banked a profit of $1.8 billion, or 29 cents a share, in the fourth quarter, down from $4.2 billion, or 66 cents a share, in the same period the year before. The Anglo-Dutch oil major's upstream earnings fell 71 percent to $493 million, though the company said lower costs offset the plunge, while its downstream income dipped just 2 percent to $1.52 billion, partly the result of improving the unit's finances. Shell's job cuts this year will bring its headcount reduction since the downturn began to 10,000. It cut its operating costs and capital spending by $12.5 billion last year. For the full year of 2015, Shell's profits sank 80 percent to $3.8 billion.  http://everythingshale.com/news/2016/february/4/shell-prepares-to-remake-itself-into-gas-giant-after-bg-group-deal/ http://everythingshale.com/news/2016/february/4/shell-prepares-to-remake-itself-into-gas-giant-after-bg-group-deal/ Thu, 04 February 2016 07:13:11 http://everythingshale.com/news/2016/february/3/weatherford-to-cut-6-000-jobs-in-first-half-of-2016/ HOUSTON — Weatherford International is planning to cut 6,000 jobs, or about 14 percent of its workforce, in the first half of the year in its latest bid to shield itself from the oil downturn. The oil field service company said it lost $1.2 billion in profits during the fourth quarter and its revenue sank 46 percent to $2 billion, as demand for oil equipment and service crews continued to diminish. The job cuts will have brought the company's workforce down by 20,000 since the oil-market crash began in 2014, when it had about 56,000 employees. In addition to the layoffs, Weatherford said it will close nine manufacturing facilities. Last year, the company shuttered 20 facilities. In a written statement, Weatherford CEO Bernard Duroc-Danner said he believes oil prices will start to respond to a gradual realignment of oil supply and global demand following deep cuts in oil-company capital expenditures. Regardless, we have geared the company and will increasingly do so for a prolonged period of very low activity,†Duroc-Danner said. We are ready for as protracted a downcycle as markets will dictate.†Weatherford posted a net loss of $1.2 billion, or $1.54 a share, in the fourth quarter of 2015, compared with a loss of $475 million, or 61 cents a share, in the same period the year before. Its North American sales dropped the most, by 60 percent to $699 million. http://everythingshale.com/news/2016/february/3/weatherford-to-cut-6-000-jobs-in-first-half-of-2016/ http://everythingshale.com/news/2016/february/3/weatherford-to-cut-6-000-jobs-in-first-half-of-2016/ Wed, 03 February 2016 18:09:21 http://everythingshale.com/news/2016/february/3/better-fluorescent-lighting-through-physics/ General Electric (GE), Lawrence Livermore National Laboratory (LLNL) and Oak Ridge National Laboratory (ORNL) have created new kinds of fluorescent lighting phosphors that use far less rare-earth elements than current technology. Phosphors are the substances inside fluorescent tube bulbs that make them glow. Rare-earth elements are hard to come by. The United States has access to a limited amount of rare-earth elements and relies on imports. Today the phosphors in fluorescent lighting consume more than 1,000 metric tons of rare-earth oxides yearly, including europium (Eu), terbium (Tb), cerium (Ce) and lanthanum (La), as well as even larger amounts of yttrium (Y) oxide. While LED lighting will likely replace fluorescent tubes eventually, low-cost linear fluorescent lighting is expected to remain a dominant feature in the U.S. infrastructure for more than a decade. Therefore it is necessary to replace the current triphosphor blend discovered more than 30 years ago (based on a mixture of blue, green and red emitters) because of its high rare earth consumption. The research team, funded by the Department of Energy's Office of Energy Efficiency and Renewable Energy and the Critical Materials Institute (CMI), have identified a green phosphor, which reduces the terbium content by 90 percent and eliminates lanthanum, while the new red phosphor eliminates both europium and yttrium, making it rare-earth free. These proposed phosphors appear to be close to meeting stringent requirements of long lamp survivability, high efficiency, precise color rendition and low-cost; the blue phosphor has inherently low rare-earth content and need not be replaced. The fundamental physics of these phosphors is compelling, and we are taking the next steps to assess their feasibility for commercial lighting,†said Steve Payne, the CMI thrust leader on the project. Editor's Note: A version of this post originally appeared on LLNL.gov . Lawrence Livermore National Laboratory is one of the Department of Energy's 17 National Laboratories . http://everythingshale.com/news/2016/february/3/better-fluorescent-lighting-through-physics/ http://everythingshale.com/news/2016/february/3/better-fluorescent-lighting-through-physics/ Wed, 03 February 2016 16:00:15 http://everythingshale.com/news/2016/february/3/eid-testifies-at-science-advisory-board-teleconference-on-landmark-epa-fracking-report/ Earlier this week, Energy In Depth testified at the Science Advisory Board (SAB) Hydraulic Fracturing Research Advisory Panel’s public teleconference. As background, the SAB hydraulic fracturing panel recently released its draft  recommendations  on the Environmental Protection Agency’s (EPA) landmark draft assessment  of fracking and groundwater.  In the document, the SAB suggests that the agency change the language of its primary finding that hydraulic fracturing has “not led to widespread, systemic impacts to drinking water resources” as well as a number of its top line findings. ———– I’m Dr. Katie Brown and I’m the Team Lead and spokesperson for Energy In Depth, which is a research and education program of the Independent Petroleum Association of America (IPAA). If a scientific advisory body is going to recommend that a research finding be changed, as the SAB has done, it should be making that request with scientific evidence to support it. But not once in the over 100 pages of recommendations does the SAB point to any evidence that contradicts EPA’s finding that hydraulic fracturing has “not led to widespread, systemic impacts” on drinking water sources.  Even more confounding is that the SAB seems to contradict itself several times in its report, which raises some questions. First, SAB asks EPA to change its top line conclusion based on what it, itself, calls “ outlier ” events – but by definition, if an event is an “outlier,” that means it’s neither widespread nor systemic. Second, SAB asks EPA to take back its finding that the number of cases where fracking has impacted drinking water is “small.”  But here again, SAB itself admits that these impacts are “infrequent,” which isn’t any different from saying the number of cases was small. Third, SAB asks EPA to change its finding that fracturing fluid spills haven’t impacted ground water, because the EPA hasn’t provided, quote, “evidence of absence of impact.” In other words, SAB is asking EPA to essentially prove a negative, which I think most neutral observers would concede is a pretty tough standard to meet. The bottom line is that if there were any evidence to suggest widespread, systemic impacts to drinking water from hydraulic fracturing, it would have been uncovered during the past decade of extensive research, and the SAB would certainly be able to cite it in its recommendations. Instead, there is nothing in SAB’s recommendations that suggests EPA’s finding of no “widespread, systemic” groundwater impacts from hydraulic fracturing is incorrect. So – contrary to its intention – SAB has actually produced a document that affirms EPA’s conclusion. SAB should maintain its role as a scientific body and base its recommendations on the science and the facts. Thank you for the opportunity to speak today. http://everythingshale.com/news/2016/february/3/eid-testifies-at-science-advisory-board-teleconference-on-landmark-epa-fracking-report/ http://everythingshale.com/news/2016/february/3/eid-testifies-at-science-advisory-board-teleconference-on-landmark-epa-fracking-report/ Wed, 03 February 2016 15:47:48 http://everythingshale.com/news/2016/february/3/after-keystone-victory-environmentalists-pushing-obama-on-atlantic-drilling/ Environmentalists emboldened by President Barack Obama's rejection of the Keystone XL pipeline are now trying to convince the administration to close a door it opened last year to allow oil drilling off the Atlantic coast. Activists on Wednesday delivered 2 million petitions to the White House opposing the proposed sale of drilling rights from Virginia to South Carolina. More than 100 cities and counties across the East Coast have passed resolutions opposing oil exploration and related activities off their coasts and environmentalists have enlisted at least 100 members of Congress. The action comes as the Interior Department works on a plan to govern offshore oil lease sales from mid-2017 to mid-2022. An initial draft, published last January, penciled in one sale of south Atlantic acreage, along with three auctions of oil leases near Alaska and 10 in the Gulf of Mexico. That draft foreclosed auctions of territory along the West Coast and in the north and mid-Atlantic, from Maryland to Maine. We are at a critical moment for the future of our coastal states,†Senator Ed Markey, a Democrat from Massachusetts, said in an e-mailed statement. Right now, the Department of Interior is considering an offshore drilling plan that will put our beaches, our fishermen and our environment on the East Coast in the crosshairs for an oil spill that could devastate our shores and our economies.†Penultimate Step When the Interior Department releases its proposal — the penultimate step before finalizing it later this year — conservationists and industry leaders expect the administration to further whittle down some of the Atlantic acreage that is up for grabs, likely shedding options in the south near the Carolinas, while leaving possible Arctic auctions on the table for now. They've signaled pretty clearly they're going to shrink the Atlantic portion quite a bit,†Athan Manuel, director of Sierra Club's Lands Protection program, said by phone. But that modest scale-back isn't enough for coastal residents worried about oil spills befouling beaches and environmentalists pushing a keep it in the ground†approach to fossil fuels. We want the certainty of having all those areas removed. We don't want to leave it to the whims of the oil industry and what happens on the world market,†Manuel said. These areas are special to us and should never have been put on the table in the first place.†Energy Security It is not clear just how much oil and gas could be lurking off the U.S. East Coast, because existing data dates to the 1970s and 1980s, when energy companies drilled 51 wells in the region. The Interior Department has estimated 3.3 billion barrels of oil and 31.3 trillion cubic feet of natural gas could be recovered from the Atlantic outer continental shelf. Oil companies view the area as a new offshore opportunity that would buttress long-running crude production in the Gulf of Mexico and replace eventual declines in what they are pumping out of onshore fields today. All areas for potential oil and gas development are critical for our energy security; we should be moving forward with a policy that ensures we have reliable supplies of oil and gas for decades to come,†Erik Milito, a director with the American Petroleum Institute, said in a phone interview. The Atlantic is important because this is all the administration has really left on the table for potential exploration in new areas.†As proposed, that Atlantic auction would happen no sooner than 2021, with a 50-mile buffer zone separating the available acreage from the coast. But there are many steps to scheduling a sale — and including it in a five-year leasing plan only preserves it as an option, without guaranteeing the auction ever takes place. Drilling Blueprint While most U.S. waters are technically open for oil and gas development, the activity can only take place on leases sold under the government's five-year plan. The legal process for assembling that drilling blueprint over two to three years is designed to start broad, with the number of potential sales and the available territory often scaled back as regulators move from an initial draft to a proposal and ultimately, the final program. Interior Department officials are on track to finalize the 2017-2022 plan by the end of the year, putting the Obama administration's framework in place as a new president moves into the White House. The Bureau of Ocean Energy Management has been reviewing nearly 1 million public comments as it hones the plan, Interior Department spokesman Blake Androff said by e-mail. Public input is a critical component of the process,†he said, noting the agency also held 23 public meetings and met with stakeholders across the country. Resident Opposition Environmentalists want the administration to heed the concerns of local, coastal residents who have banded together in opposition — even when it conflicts with drilling-minded officials in southeastern statehouses. The governors of all four directly affected East Coast states — Virginia, North Carolina, South Carolina and Georgia — support offshore drilling near their shores. The clash is especially stark in the political battleground of Virginia, where Democratic Governor Terry McAuliffe and Democratic Senators Mark Warner and Tim Kaine — all potential running mates for Hillary Clinton — have united to back oil lease sales. The coastal communities are in lockstep together on this; even those outside the planning area in New Jersey in Florida are uniformly saying no — no drilling, no seismic, no anything,†Claire Douglass, a campaign director at the conservation group Oceana, said by phone. Spill Fears Environmentalists say an oil spill in U.S. Atlantic waters would devastate the coastal economy, including tourism, fishing and recreational activities. But the oil industry highlights the potential dividends — as much as $60 billion in added economic value for states from Delaware to Georgia, according to a 2014 report commissioned by the Interstate Policy Alliance and South Carolina's Palmetto Policy Forum. Conservationists also view the dispute over Atlantic drilling as the major front in their fight against fossil fuels, which has seen victories in the past year, as world leaders agreed to a climate pact in Paris, the Environmental Protection Agency imposed its Clean Power Plan cutting greenhouse gas emissions from the power sector and the Obama administration halted new coal leasing on public land. Obama Legacy Over the past six months, we've made more progress on this issue than we've ever seen in our history,†League of Conservation Voters President Gene Karpinski said in a conference call. Obama has made amazing†strides, Karpinski said, and now he has an opportunity to build on that legacy.†Oil companies such as BP Plc, ConocoPhillips and Exxon Mobil Corp. have pared their capital spending amid low crude and gas prices, raising the question of how much they could devote to snapping up new Atlantic leases even if an auction were held in 2021. But industry officials stress that when oil companies add to offshore portfolios, they are eyeing potential production and returns at least a decade in the future, only after initial exploratory drilling that yields discoveries, decisions to further invest and the construction of infrastructure to support the work. Politics end up playing too much of a role in energy policy decisions,†API's Milito said. You have to get away from politics. This decision is actually not to have a lease sale in 2021, just include it in a plan as an option. It leaves open that opportunity when that time comes, to do further analysis and see if there's interest there and move forward.†To contact the reporter on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net http://everythingshale.com/news/2016/february/3/after-keystone-victory-environmentalists-pushing-obama-on-atlantic-drilling/ http://everythingshale.com/news/2016/february/3/after-keystone-victory-environmentalists-pushing-obama-on-atlantic-drilling/ Wed, 03 February 2016 15:41:48 http://everythingshale.com/news/2016/february/3/this-week-s-top-energy-jobs/ The energy industry oil & gas sector in particular is bracing itself for a massive wave of retirements over the short to medium term, which has been dubbed The Great Shift Change .â€Â As the industry prepares for this turnover, companies are looking to the next generation of candidates with skills ranging from finance, geology, engineering, law, etc. Additionally, lots of exciting opportunities are opening up in various renewable energy sectors as technological advancements rapidly disrupt traditional utility business models. The energy efficiency business is also growing by leaps and bounds, as significant cost saving benefits associated with using less energy are an easy sell for most businesses.   With these issues in mind, Breaking Energy highlights a few interesting energy jobs on a weekly basis.       Laboratory Technician – Catalyst Laboratory  Chevron; Richmond, CA, US Overview: This position is specific to work activities pertaining to the Experimental Systems Unit-Catalyst Laboratory. The Laboratory Technician has a thorough knowledge and understanding of safe laboratory work practices and is responsible for conducting routine lab work including synthesis, and wet chemistry and preparation of catalyst samples. Responsibilities for this position may include but are not limited to: Prepares laboratory size catalysts on specialized equipment for mixing, extruding drying and calcining. Prepares small catalyst samples for analytical inspections, micro-unit or pilot plant testing. Prepares complex metal solutions. Performs metal separation and purification procedures by solvent extraction. Performs physical tests on laboratory and commercial catalysts. Required Qualifications:   Bachelor of Science Degree in Chemistry, Biology or related field. Minimum of 3 years laboratory experience. Experience in wet chemistry procedures and analytical techniques. Good communication skills. Preferred Qualifications: Experience in separating and purifying metals from complex solutions. Synthesis of catalyst materials. Familiarity with computer controlled equipment, spreadsheets and word processing. Relocation Options: Relocation will not be considered within Chevron parameters. Discover your strengths and invest in your future by  applying today . Business Performance Analyst Shell; Houston, TX, US Job Description: The Business Analyst sits within Motiva Business Operations and is a key contributor to the Business Performance team. The Business Performance team is tasked with providing the Motiva Fuels Sales and Marketing (FSM) organization professional analytical, business planning, sales team deal support, and oversees Motiva’s remaining real estate portfolio. The team is also accountable for developing FSM’s go to market channel strategy and establishing plans and tactics to deliver. The team is also a key contributor to Motiva’s ongoing strategy work.\ Perform analysis of business results, plan achievement and expense management. Proactively identify opportunities, trends, learnings and recommend changes Support region and market level budgeting, planning and implementation activities through the development and use of tracking tools i.e. scorecard achievement and development. Prepare and present thorough accurate reporting (written, electronic and oral) supported by well thought-out, economics-based business cases. Manage Market Sales Post & Non Post Closing Obligations o Reconcile, review and validate quarterly & year-end true ups o Monitor, review, and validate monthly tank pull obligations o Drive understanding of fields knowledge of customers agreement obligations Proactively research external data and gather marketplace intelligence regarding competitors and proactively review industry news & performance Provide value-added by focusing and using industry market research and standards to benchmark current processes, translate them into actionable information, and enable overall business performance improvement for Retail Implement market performance analysis with various tactics (e.g. aspirational growth, pricing, etc.) Interface with various Retail groups (e.g., Sales and Operations, Ops Support, Pricing, Marketing, Finance and Network) Assist in special projects Super User for Business Intelligence application &. SalesForce.com Business team. Requirements: Must have legal authorization to work in the US on a full-time basis for anyone other than current employer. Bachelor’s degree. Minimum (3) three years in a business analyst role or similar in a fast paced industry. Highly proficient with Excel. Proven experience preparing and presenting thorough accurate reporting (written, electronic and oral) supported by well thought-out, economics-based business cases Highly proficient with Microsoft Office Suite Must have the ability to successfully complete Microsoft Office skills test. Strong general computer software competencies and possess the ability to easily adapt to new software and technology Discover your strengths and invest in your future by  applying today . Cloud Ops Business Associate Job SuccessFactors; Washington DC, US ROLE DESCRIPTION: Within the HCM Cloud Delivery organization, the Cloud Ops Sales Support team assumes SAP-wide ownership for contractual deviations pursuant to SAAS and Cloud Operations and operational related sales support inquiries. The Cloud Ops Sales Support team aligns with internal stakeholders to ensure education, policies and procedures are maintained.It is your task as a SAAS and Cloud Ops expert to support the Sales organization with information that notifies, advises and updates the team on best practices in serving the customer while adhering to company policy and procedures. The position is a unique opportunity to develop and grow your talents and utilizes your solution expertise in a global role coping with both, business and technology. Global Job Summary: * Executes operational tasks independently and deals with sales queries. Gains a good knowledge of standard processes and related transactions. * Maintains good relationship with external and internal customers. * Cooperation and Communication with internal and external customers * Preparation of process documentation / working instructions * Supporting other team members as back up * Support projects and/or Improvement activities * Participates in quarterly sales resolution * Support sales with customer contract activities which includes addressing business operational inquiries and review of deviation of standard contractual language for compliance EXPECTATIONS AND TASKS: * Contract Validation: Work closely with internal Sales, Pricing, and Revenue Recognition teams during the drafting and negotiation process. * Anticipate problems and initiate actions to resolve using professional concepts, company policies and procedures * Drive efficiency and process improvements. Support on projects, reporting and monitoring activities. * Review and interpret software contracts terms and conditions, and be able to confirm validity and accuracy according internal policies. * On time process of sales inquiry via the Business Operations Sales Support alias * Generate credit justification to Finance for customer initiate SLA credit request * Support Sales teams on customer records, billing research and general queries. * Provide post-sales support * Answering internal and external queries regarding Service Level Agreement * Drive efficiency and process improvements. Support on projects, reporting and monitoring activities. * Archiving and maintaining all contractual documentation * Perform quality assurance and business/IT process improvement activities in support of Data Center Operations. Identify gaps in current process and recommend steps to minimize risk * Work with Quality Assurance team to schedule Data Center and Security audits. -Manage and maintain Maintain Data Center Operations JAM site and update Cloud Operations Guide as required * Evaluate changes in Data Center Operations services and assist with data gathering to justify pricing changes and/or new SKU's to RevRec that better align with our Data Center SaaS Offerings . WORK EXPERIENCE: * Experience working within a shared service center and/or operations related field is an advantage * 3 to 5 years of experience in operations or business management role * Advanced written and spoken English skills EDUCATION AND QUALIFICATIONS / SKILLS AND COMPETENCIES: * Successfully completed Secondary Education * Bachelor´s degree (Business/Accounting field) * Fluent in English with excellent communication skills. * Team player * Extremely detail-oriented, organized and with strong follow-up skills * Must be able to multitask, prioritize and solve problems with little direct supervision Discover your strengths and invest in your future by  applying today .         http://everythingshale.com/news/2016/february/3/this-week-s-top-energy-jobs/ http://everythingshale.com/news/2016/february/3/this-week-s-top-energy-jobs/ Wed, 03 February 2016 13:00:38 http://everythingshale.com/news/2016/february/3/prosecutor-smells-crime-charges-utility-for-huge-gas-leak/ LOS ANGELES (AP) — Top prosecutors in Los Angeles County and the state of California are the latest to make moves against a utility for a massive and still-flowing gas leak, joining a growing group that now includes several levels of government along with parts of the private sector. LA County's District Attorney Jackie Lacey filed misdemeanor criminal charges Tuesday against Southern California Gas Co. for failing to immediately report the natural gas leak that has been gushing nonstop nearly 15 weeks. Lacey said the charges aren't a solution to the problem, but the gas company needs to be held responsible for the leak that has uprooted more than 4,400 families. The charges came the same day the state Attorney General Kamala Harris joined a long line of others in suing the gas company for the blowout that has spewed more than 2 million tons of climate-changing methane since October. U.S. senators want the secretary of energy to investigate the leak, and federal regulators are crafting new safety standards for underground natural gas storage facilities. Many nearby residents want the facility — the largest in the West — shut down, and the California Public Utilities Commission is studying what impact that would have on energy supplies. The criminal complaint charges the company with three counts of failing to report the release of a hazardous material and one count of discharge of air contaminants. The company said in a statement that it will vigorously defend itself in court. Arraignment is scheduled Feb. 17. If convicted, the company could be fined up to $1,000 per day for air pollution violations and up to $25,000 for each of the three days it didn't notify the state Office of Emergency Services of the leak. The company said it discovered the leak Oct. 23 and notified state regulators. But it failed to let state emergency officials know until Oct. 26, Harris said in the latest of more than two dozen lawsuits filed against SoCalGas. The public was also left in the dark. Those who complained to the company about the nauseating smell were initially told it was part of routine maintenance. Company officials have since apologized for not notifying them sooner. The leak has created a public health and statewide environmental emergency, Harris said. The lawsuit, which doesn't specify damages, said the company created a nuisance and violated health and safety codes and the state's unfair competition law. A spokeswoman said the company doesn't comment on pending litigation and was focused on stopping the leak, which it expects to plug by the end of the month. SoCalGas said it paid $50 million through December to try to cap the leak and relocate people, but the number of families it has relocated since then has soared and work at the leaking well continues. It is also facing potential class-action lawsuits from residents and businesses as well as suits from regional air regulators and city and county authorities. Harris, a Democrat running for U.S. Senate, is the first state official to sue, though her lawsuit incorporates some elements of lawsuits filed by the city and county of Los Angeles. Several state agencies are investigating the blowout and have issued orders to the gas company to stop it and turn over records of the 60-year-old well and others from the field that is the largest natural gas storage facility in the West. The federal Pipeline and Hazardous Materials Safety Administration got involved for the first time Tuesday, saying it is working to propose new regulations for gas storage and directing operators to inspect and take immediate actions to ensure the safety of underground natural gas storage facilities across the country.†U.S. Rep. Brad Sherman, a Democrat who lives in the Porter Ranch neighborhood that has been most affected by the gas leak, said the agency's advisory amounted to a note to industry saying, not just please, but pretty please†follow the American Petroleum Institute's recommended practices for gas storage. At a very minimum, those practices should be mandatory immediately,†said Sherman, who is working on legislation that would require PHMSA to set safety standards for natural gas storage facilities. The agency's advisory said gas storage operators should check for leaks and identify potential failures from corrosion and other damage. The agency said the SoCalGas gas leak probably came from a well casing. California Sens. Barbara Boxer and Dianne Feinstein, both Democrats, introduced a legislative amendment passed Tuesday that would ask the U.S. Department of Energy to investigate and stop the Aliso Canyon leak and prevent similar disasters at the nation's more than 400 underground natural-gas storage sites. Boxer stood by a dramatic infrared photo that showed the otherwise invisible plume of methane-laced natural gas from the blowout. She told fellow senators in a speech on the Senate floor that the leak was a nightmare.†___ Associated Press writer Ellen Knickmeyer contributed to this story from San Francisco. http://everythingshale.com/news/2016/february/3/prosecutor-smells-crime-charges-utility-for-huge-gas-leak/ http://everythingshale.com/news/2016/february/3/prosecutor-smells-crime-charges-utility-for-huge-gas-leak/ Wed, 03 February 2016 12:40:29 http://everythingshale.com/news/2016/february/3/transition-to-low-carbon-energy-will-be-extremely-difficult-energy-official-says/ Two months after world leaders made a historic pact in Paris to try and limit climate change comes the work of figuring out how. The shift from a fossil-fuel intensive energy sector to a low-carbon one — without disrupting the flow of energy upon which the world turns — is going to be extremely critical and extremely difficult,†Melanie Kenderdine, U.S. Department of Energy director of energy policy and systems analysis, warned Wednesday. I have always worried about the transition space,†she said during a talk at the Atlantic Institute. You've got to be very careful about the policy, so you're incentivizing the right things.†The comments come as the United States and countries around the world work on cutting greenhouse gas emissions to the point the earth's temperature does not rise more than two degrees Celsius. Kenderdine pointed to how the U.S. power sector shifted heavily to coal in the 1970s  following a nuclear meltdown at the Three Mile Island nuclear plant and a U.S. ban on building natural-gas fired plants — prefaced on what turned out to be an incorrect belief the country was running out of gas. This time, federal policy makers worry about what mechanism to use in pricing carbon and how developing countries with abundant coal resources will comply with the Paris agreement when they're rushing to expand their electricity grids. David Eyton, BP's head of technology, who also spoke at the talk, opined that at least for oil companies like his  the mechanism is not as important as consistency within countries. If you put lots of different prices on carbon within a national economy, you just created an arbitrage,†he said. At the same time, 20 countries committed in Paris to doubling their research funding for clean energy technology by 2021 — at the same time billionaires led by Bill Gates committed billions of dollars to the effort. The U.S. Department of Energy is budgeted to spend $6.4 billion on clean energy research this year. But expect that to change, Kenderdine said. We're probably going to exceed that commitment [in Paris],†she said. http://everythingshale.com/news/2016/february/3/transition-to-low-carbon-energy-will-be-extremely-difficult-energy-official-says/ http://everythingshale.com/news/2016/february/3/transition-to-low-carbon-energy-will-be-extremely-difficult-energy-official-says/ Wed, 03 February 2016 12:17:38 http://everythingshale.com/news/2016/february/3/colorado-county-rejecting-national-group-s-ban-fracking-push/ Adams County is reportedly rejecting an intense lobbying effort from national activist groups who descended on a recent commission hearing as part of their failing campaign to ban oil and gas development in Colorado. As the Denver Post reports : “Adams County leaders made it clear Wednesday morning that they won’t support a 10-month ban on new oil and gas activity in urban parts of the county after hearing nearly eight hours of testimony that began Tuesday night.” Spearheading the anti-fracking effort in Colorado is the Washington, D.C-based political activist group, Food & Water Watch (F&WW). At the hearing, F&WW tried to pressure Adams County Commissioners into adopting an “emergency moratorium” on hydraulic fracturing, citing a series of misleading and debunked talking points to scare the public and advance their extreme agenda. Spreading misinformation Without any scientific evidence to back them up, F&WW resorted to the often-repeated activist talking points on water contamination. Speaking at the hearing , Food & Water Watch Senior Organizer Lauren Petrie: “There have been over a thousand cases of water contamination across the country where fracking has occurred and the industry has denied responsibility in many of these cases.” Perhaps Petrie and F&WW missed the Environmental Protection Agency’s (EPA) five year study  on the relationship between groundwater and hydraulic fracturing, which states clearly that the process has “not led to widespread, systemic impacts to drinking water resources.” Indeed, if there were any evidence to suggest widespread or systemic impacts to drinking water from hydraulic fracturing, it would have been uncovered during the past decade of extensive study of the process by scientists at the EPA and others. But Petrie didn’t stop there. She also rehashed the activist claim that hydraulic fracturing is a danger to public health and especially to pregnant women. From Petrie’s testimony : “Recent studies by Johns Hopkins and recent reports by the New York Times and Bloomberg have associated health impacts such as lower birth weights, premature births and birth defects for babies whose mothers live in close proximity to wells while they were pregnant. These are serious health impacts that will have a lasting effect on women, children and their families.” It is likely that Petrie is referring to an  Oct. 2015  study from researchers affiliated with the Post Carbon Institute (and Johns Hopkins Univ.) that attempts to link  fracking with premature births . As EID pointed out when the study was released, the researchers found premature rates at or below the national average in the areas closest to natural gas wells, yet they still pushed the claim that these rates were high, garnering headlines proclaiming harm. And other academics have also taken issue with the research. Notably, Dr. Gilbert Ross, senior director of medicine and public health at the American Council on Science and Health recently said that “although these methods sound sophisticated, they tell us very little about whether fracking had any impact on the pregnancies.” He went on to explain: “ There is no possible way this retrospective study could have accounted for key issues , such as genetic factors, history of prior pregnancy issues, [or] drug or alcohol use in the parents, all of which have a large influence on birth weights and the duration of pregnancy,” Ross said. If that’s not enough, the authors of the study even acknowledged up front that they do not have the scientific evidence to link oil and gas activity to premature births. From the  press release announcing the study: “While  the study can’t pinpoint why the pregnant women had worse outcomes near the most active wells , Schwartz says that every step of the drilling process has an environmental impact.” (emphasis added) But apparently F&WW is more than happy to ignore these well documented issues with the research as long as it appears to support their efforts to ban oil and gas development. Conclusion According to The Colorado Statesman , F&WW is one of the “ major players behind the anti-fracking movement ” in our state and has “ played a key role in supporting initiatives to ban or delay fracking in local communities ” in Colorado, starting with Longmont in 2012. F&WW was also behind the creation of statewide groups such as Frack Free Colorado , Protect Our Colorado and Local Control Colorado as it tried to put a “local face” on the group’s national agenda. Despite their sudden descent into Adams County, F&WW’s goal hasn’t changed: They want a statewide ban on hydraulic fracturing, which would effectively ban oil and gas drilling in Colorado . Their appearance at this latest hearing of a local government underscores how opposition to energy production in Colorado is being driven largely by a single national political group that does not believe in tighter energy regulations, only energy bans . http://everythingshale.com/news/2016/february/3/colorado-county-rejecting-national-group-s-ban-fracking-push/ http://everythingshale.com/news/2016/february/3/colorado-county-rejecting-national-group-s-ban-fracking-push/ Wed, 03 February 2016 12:03:07 http://everythingshale.com/news/2016/february/3/everybody-else-is-reading-this/ Our LNG Exports Signal From Iran Breaking Energy Epic EMR Helped Doc Discover Extent Of Flint Water Crisis MedCity News http://everythingshale.com/news/2016/february/3/everybody-else-is-reading-this/ http://everythingshale.com/news/2016/february/3/everybody-else-is-reading-this/ Wed, 03 February 2016 11:00:05 http://everythingshale.com/news/2016/february/3/us-crude-inventories-break-decades-old-record-after-huge-build/ U.S. inventories of crude oil topped 500 million barrels for the first time in decades, according to the U.S. Energy Information Administration's weekly storage report. A higher-than-expected build of 7.8 million barrels for the week ending on Jan. 29 pushed inventories to 502.7 million barrels — a total not seen in at least 80 years, the EIA said in its report released Wednesday — and sent oil prices tumbling. Data made available from the EIA only goes back to 1982, but crude inventories have never topped 500 million barrels in that time. Prices for the benchmark U.S. crude climbed by $1.23 to $31.11 at 9:48 a.m. on Wednesday, but fell as low as $29.40 shortly after the report was published. The build reflected decreasing demand for gasoline — refineries last week operated at 86.6 percent of capacity, 0.8 percent lower than the week prior and a falloff of several percentage points from January when capacity topped 90 percent. Stocks of gasoline rose to 254.4 million barrels, the most in 34 years. The last time gasoline inventories got close to that mark was in 1990, when stores rose to 251.1 million barrels. http://everythingshale.com/news/2016/february/3/us-crude-inventories-break-decades-old-record-after-huge-build/ http://everythingshale.com/news/2016/february/3/us-crude-inventories-break-decades-old-record-after-huge-build/ Wed, 03 February 2016 10:49:09 http://everythingshale.com/news/2016/february/3/tension-returns-to-nigeria-to-threaten-crude-exports/ Last night's API report had a considerably bearish tilt, yielded a solid build of 3.8 million barrels to crude stocks, while Cushing stocks edged up also. It was the gasoline build of 6.6 million barrels, however, which stole the (bearish) show. This huge build came amid a drop in refinery utilization, and although demand was likely dinged by inclement weather, especially in the Northeast  (h/t winter storm Jonas), weaker gasoline demand of late is waving a red flag about the state of the broader economy. It continues to be rough sailing for the oil majors, as Exxon swiftly followed BP's quarterly earnings with an equally challenging set of results. Exxon posted its weakest annual results in over a decade . Although in contrast to BP it was able to book positive annual earnings, the $16.2 billion seen was a halving of last year's level. Chevron said it will cut spending by $9 billion this year, while Exxon is slashing spending by 25% or $7.9 billion. As capital expenditures are cut, oil majors are instead looking to weather the storm and maintain their dividends by borrowing mo' money. BP's net debt increased by almost $5 billion last year to $27.2 billion, while Chevron's total debt increased by nearly 40% last year . Shell hasn't cut its dividend since World War II, but its will is going to be severely tested, especially after S&P cut its credit rating on Monday to its lowest ever. From one troubled area to another, we take a look at Nigeria. Africa's top oil producer is holding talks with the World Bank  for a loan to help plug its largest ever budget gap. Nigeria depends on oil for virtually all of its export revenue, and for two-thirds of its government revenue. Hence, as its budget deficit is projected to widen to 2.3% of GDP this year, it is seeking loans to fund its spending efforts to boost growth. Compared to some oil exporters, its budget deficit looks fairly minor. As we can see from our ClipperData , Nigerian crude exports were above 2 million barrels per day in January. But just as exports pop above this level again, fears of terrorism are rising up once more in the Niger Delta. An amnesty in the Niger Delta region has been in place for the past seven years, but the cutting of multi-million dollar contracts by President Buhari to former militant commanders has caused a resurgence in friction. These contracts were paid to commanders to guard the pipelines they once attacked. But after the anti-corruption agency recently charged a former militant commander of money laundering, a number of pipelines were bombed last weekend. Although crude theft is not as rife as it once was,  250,000 bpd of Nigerian production  is already stolen each day. The economy would be crippled by a resurgence of violence and a drop in oil production especially in the current low oil price environment. India, Netherlands and Spain are its largest destinations; these three account for ~45% of its total crude exports: http://everythingshale.com/news/2016/february/3/tension-returns-to-nigeria-to-threaten-crude-exports/ http://everythingshale.com/news/2016/february/3/tension-returns-to-nigeria-to-threaten-crude-exports/ Wed, 03 February 2016 09:22:11 http://everythingshale.com/news/2016/february/3/strong-company-earnings-oil-recovery-send-stocks-higher/ NEW YORK (AP) — Stocks are gaining ground in early trading as investors were encouraged by some strong company earnings reports and a pickup in the price of crude oil. Comcast jumped 3 percent after reporting its best year for traditional cable TV services in almost a decade. Electrical systems manufacturer Eaton Corp. surged 4 percent after reporting earnings that came in ahead of forecasts. The price of oil turned higher after a two-day slump. The Dow Jones industrial average increased 76 points, or 0.5 percent, to 16,231 as of 9:35 a.m. Eastern time. The Standard & Poor's 500 index climbed six points, or 0.3 percent, to 1,909. The Nasdaq composite rose 10 points, or 0.2 percent, to 4,526. Bond prices fell. The yield on the 10-year Treasury note rose to 1.87 percent. http://everythingshale.com/news/2016/february/3/strong-company-earnings-oil-recovery-send-stocks-higher/ http://everythingshale.com/news/2016/february/3/strong-company-earnings-oil-recovery-send-stocks-higher/ Wed, 03 February 2016 09:01:34 http://everythingshale.com/news/2016/february/3/lining-up-the-tools-to-break-the-islamic-state-brand/ Reversing the political, military, and ideological factors that led to the movement’s rise will require substantive projects that are as self-sustaining and nimble as IS has proven to be. The Islamic State brand is an ambitious and seductive vision that has proven to be a tremendous media success. Yet this vision is ultimately tethered to the perception of an actual, functioning utopian state. Military action against IS havens in Syria and Iraq is thus the most effective way to puncture the group’s propaganda balloon. Ongoing efforts toward that end are producing some tangible results, but all too slowly. And while technical measures to diminish the volume of IS material available on social media are also important, the brand is now a mature one that is well understood and internalized by proponents and adversaries alike. Washington will therefore need to find more creative ways of getting its own message across, mainly via its partners in the Middle East. REBRANDING AND WORKING THROUGH PROXIES On the surface, the recent rebranding of the Center for Strategic Counterterrorism Communications (CSCC) into the Global Engagement Center seems to be nothing more than a public relations gambit. Not one of the responsibilities listed in the State Department press release announcing the change was new — CSCC had worked on all of these tasks as far back as 2011. According to press accounts, however, the new center will no longer be in the direct messaging business. If its budget remains the same — about $5.5 million per year — the move away from direct messaging would free up approximately $3.5 million for the creation of overseas proxies and indirect messaging platforms. Earmarking more funds for such efforts is certainly worth trying, assuming the programs in question include solid performance metrics and congressional oversight. Yet the one visible example of a Middle Eastern messaging proxy has not lived up to its promise, at least not yet. Launched to great fanfare in July 2015, the Sawab Center in the United Arab Emirates is largely funded by Abu Dhabi, with two American foreign service officers detailed to the operation. Its output — some 2,900 tweets in over six months — has been a bit underwhelming, resembling a smaller, more timid version of CSCC’s digital outreach team. Although it should have greater freedom to do things that overt U.S. government communications avoid, Sawab is missing two things that the IS brand has in abundance: volume and passion. The idea behind Sawab is solid, however, and one hopes that it will mature, and that similar initiatives in the pipeline will evolve into something more substantive and consequential. Unsure about how to proceed in the propaganda war, the U.S. government wasted much of 2015, as news reports presented an image of confusion and drift compounded by poor management and infighting over the right formula to follow. Apparent micromanaging by the National Security Council, a risk-averse mentality, and obsessive attention to form over substance prevailed. Perhaps something has been learned from this debacle and the center’s new, well-regarded leadership will be empowered to do the necessary work. The government seems to be making the beginnings of slow progress, but it is too early to tell. INCREASING VOLUME AND FINDING VOICES Some of last year’s efforts to facilitate information on IS defectors and recanters could prove very valuable and should be supported and expanded. As IS fighters return to their home countries, governments should find creative ways to incentivize counterradicalization media outreach as much as integration and law enforcement. In Washington, the disconnect at the top levels of government does not detract from the dogged work being done in this field by dedicated civil servants, foreign service officers, and authorities detailed from other agencies. Given the importance of Iraq and especially Syria to how the IS discourse is sold to Western and non-Western audiences distant from the front, there is real value in empowering Sunni Muslim voices in those war-torn countries who can speak directly to wavering individuals outside the Middle East. In essence, their message would be, “I am one of those Muslims whom IS claims to be defending, and the image that the group is presenting to you of our reality is a false one.” The power of such personal testimony is clear in the videos propagated by IS itself — so many of the individuals who appear in these messages speak clearly and directly, stating all sorts of awful things with uncovered faces and tremendous conviction. Last month, the Telegraph described how London police have used videos of Syrian mothers speaking in Arabic to reach out to the British population. This is a worthy experiment — the question is whether it can be deepened and individualized to replicate the one-to-one radicalization process that is so often a key factor in influencing new recruits. It should be. As detailed by recent PBS NewsHour coverage, the U.S. government and others are also funding some interesting work in the peer-to-peer interactive realm on social media, often through universities. These efforts seek to begin redressing the imbalance between the time that IS and Washington respectively invest in recruitment. Only time will tell whether such small projects will be able to contest the individual approach pioneered by IS and its volunteer recruiters, but it is a worthwhile investment to make. IDEOLOGY MATTERS TOO The U.S. government should also find room for a well-funded regional media effort promoting tolerant, liberal Arab Muslim values in contrast to the vision of Salafi jihadism. This is a longer-term project that has value in promoting the pluralism and open discourse that are anathema to movements like IS and al-Qaeda. Some pioneering efforts to do this have arisen in the private sector (e.g., Fikra Forum ). And clearly there are enough eloquent individuals in Syria, Lebanon, Jordan, and even the Gulf states who hold tolerant worldviews but are rarely empowered by Washington or anyone else — certainly not on a consistent basis, and not remotely like the support lavished on a range of non-IS Salafi media. Again, this is not something the U.S. government can do directly, but it can certainly prioritize the promotion of such efforts among its regional partners. President Obama has spoken several times about the importance of defeating the Islamic State’s ideology, but he has done so without explaining what that ideology is or how to counter it. Indeed, shifting to indirect initiatives underscores the deficit in the government’s direct counterterrorism communications efforts. All too often, its default approach has been to work with friendly governments or contract the task to companies or organizations inside the Beltway. To be sure, the Moroccan, Jordanian, and Emirati governments are making some very worthwhile efforts in this area, and there is nothing wrong with that. More is needed, however. Washington should also look to expand the scope of nongovernmental messaging platforms and organizations in the Middle East, with the goal of building sustainable messaging efforts against Salafi jihadists. Last month, for example, an IS “Wilayah Nineveh” video launched as part of a coordinated campaign on North Africa spent almost as much time attacking Sufi Muslims and liberals as it did criticizing political authorities. The Salafi “sea” from which IS rises should not be ignored — encouraging regional partners to push back against the political and societal discourse that sets the stage for violence is good policy. Finally, it must be remembered that the Islamic State is only one part of a larger ideological trend that is inimical to U.S. values and foreign policy interests. The petri dish where it and al-Qaeda evolved was not created overnight, and the political, military, and ideological factors that led to their rise will not be easily reversed. Salafi jihadism needs to be fought on every front, and there seems to be a slow coalescing of critical mass against it; for example, witness the Marrakesh Declaration that emerged from a recent conference on “Religious Minorities in Muslim Lands,” jointly convened by the Moroccan government and the UAE-based “Forum for Promoting Peace in Muslim Societies.” Yet the jury is still out on whether these efforts are too cosmetic, superficial, or esoteric. The challenge is to translate understanding and alarm into substantive policies and projects that are as self-sustaining and nimble as IS has proven to be. Alberto Fernandez is vice president of the Middle East Media Research Institute (MEMRI) and former State Department coordinator of the Center for Strategic Counterterrorism Communications. Originally Posted on February 2, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/february/3/lining-up-the-tools-to-break-the-islamic-state-brand/ http://everythingshale.com/news/2016/february/3/lining-up-the-tools-to-break-the-islamic-state-brand/ Wed, 03 February 2016 09:00:25 http://everythingshale.com/news/2016/february/3/halliburton-poised-to-offer-baker-hughes-deal-concessions-to-eu/ Halliburton Co. was given more time by the European Union to come up with a package of asset sales that will assuage competition concerns over its takeover of oilfield services rival Baker Hughes Inc. The company said Wednesday that it would offer the remedies soon, after the EU pushed back the deadline for reviewing the deal by 20 working days to June 23. Halliburton believes the extension will facilitate the commission's review of a remedies package, which will be formally offered by the company in the near future in order to address the commission's concerns,†Emily Mir, a spokeswoman for the Houston-based company, said in an e-mail. The EU merger authority opened an in-depth probe into the deal on Jan. 12, citing concerns that combining the the second- and third-largest suppliers to oil exploration companies may impede competition and increase prices. Halliburton last month expanded a list of assets to sell to try to convince antitrust authorities across the world that the deal won't harm competition. The oilfield services company said it presented its new plan to the U.S. Justice Department in January. It didn't disclose what new assets it's planning to divest. The cash and stock deal was valued at $34.6 billion when it was announced near the end of 2014, just as oil prices had begun their downward spiral. Shares of both companies have dropped more than 30 percent since then. Halliburton would have to pay Baker Hughes a breakup fee of $3.5 billion if the bid is dropped. http://everythingshale.com/news/2016/february/3/halliburton-poised-to-offer-baker-hughes-deal-concessions-to-eu/ http://everythingshale.com/news/2016/february/3/halliburton-poised-to-offer-baker-hughes-deal-concessions-to-eu/ Wed, 03 February 2016 08:58:15 http://everythingshale.com/news/2016/february/3/spectra-slips-on-cheap-ngls-lower-canadian-dollar/ HOUSTON —Spectra Energy's beleaguered naturals gas liquids business and a weaker Canadian dollar dragged down what was otherwise strong end to 2015, the company reported Wednesday. The Houston-based pipeline company said it generated $201 million in distributable cash flow an industry standard metric that approximates how much cash it has to pay out as dividends in the fourth quarter, down from $316 million in the same quarter of 2014. For the full year, cash generated was $1.27 billion, down from $1.46 billion in the prior year. That amount was enough to pay the company's declared distributions to investors 1.3 times over, down from the 1.6 times the company could have paid its dividends in 2014, the company reported. The final score came in above the 1.2 times coverage target its CEO Greg Ebel set in early January, when Spectra Energy Corp said it would hike its dividend by an annual total of 14 cents to $1.62 per year. Both the hike and the extra dividend coverage are solid results at a time when many midstream companies are struggling to keep growing their dividend or are tight on extra cash. But the company's strong performance was dampened by a nagging exposure to commodity prices and foreign currencies. In terms of net income, Spectra reported a fourth-quarter loss of $263 million, driven by a $333 million goodwill impairment charge following its 2002 acquisition of Canadian company Westcoast Energy and a $110 million charge related to its 50 percent stake in DCP Midstream. Denver-based DCP Midstream is a joint venture between Spectra Energy and Phillips 66. Westcoast Energy today makes up a key component of Spectra's Canadian pipeline and processing business in British Columbia. The writedown comes after Spectra's wider Canadian business reported a pre-tax earnings of $123 million in the final quarter of 2015, compared with $250 million in the year before. Spectra said it had taken a full-year, $25 million charge to lay off employees and that its business had suffered due to the falling Canadian dollar. DCP Midstream has been a persistent problem for both Spectra Energy and Phillips 66 for much of 2015. In the fourth quarter, Spectra said its 50 percent share of the business had lost $36 million compared to $18 million in the same period the year before. Across 2015, Spectra has written down its DCP Midstream investment by $172 million. The loss has come mostly due to the company's exposure to natural gas liquids prices, and in September, Spectra and Phillips 66 said they would pump $1.5 billion in cash and new assets into DCP Midstream to help revive the business. During the fourth quarter of 2015, natural gas liquids prices averaged 42 cents per gallon. In 2014's final quarter, prices averaged $0.68 per gallon, Spectra said. The soft spots in Spectra's results were offset by strong results from the company's main U.S. natural gas business. That business — reported through results of subsidiary Spectra Energy Partners — reported a fourth-quarter, pre-tax income of $484 million compared with $444 million in the final quarter of 2014. The increase was mostly due to expansions that came online, Spectra said. Looking forward, we continue to have more than $8 billion of contractually secured projects in our execution backlog, 75 percent of which are supported by demand-pull customers such as local utilities,†said Spectra CEO Greg Ebel in a statement. Financially, too, Spectra Energy said it was on solid footing. Over the past year, shares of parent company Spectra Energy Corp. and its subsidiary Spectra Energy Partners are down only about 20 percent — a more moderate decline than many of its competitors. The relatively high share price has helped the company raise new funds while others are struggling to come up with cash. Spectra filed with regulators to sell $1 billion in shares on the market to raise new funds in December. The company also had success refinancing debt and selling preferred shares in Canada. Our financing needs are very doable next year,†said Spectra CFO John Reddy. http://everythingshale.com/news/2016/february/3/spectra-slips-on-cheap-ngls-lower-canadian-dollar/ http://everythingshale.com/news/2016/february/3/spectra-slips-on-cheap-ngls-lower-canadian-dollar/ Wed, 03 February 2016 08:10:19 http://everythingshale.com/news/2016/february/3/marathon-petroleum-profits-dip-more-than-75-percent/ Marathon Petroleum Corp. saw its quarterly earnings dip by nearly 80 percent from 2014, but the refining giant still saw a net income gain for the full year. The Ohio-based refining and pipeline company reported a $168 million net income gain for the final three months of the year, down from $805 million. For the year, Marathon's net income grew to $2.87 billion from $2.55 billion. Refining companies thrived for much of 2015 thanks to strong fuel demand and cheap feedstock prices, but the margins shrunk somewhat in the fourth quarter as gasoline prices kept plummeting and seasonal demand shrunk. Marathon's quarterly earnings also were hit by a one-time charge of $370 million to reflect the lowered value of some of its inventory. Marathon President and CEO Gary Heminger praised his company's full-year performance. In addition to our strong financial and operational results, we also made tremendous progress on our strategic objectives of growing the more stable cash-flow segments of our business and enhancing our refining margins,†Heminger added. We remain very encouraged by the environment for U.S. refiners,†he said in a conference call. Marathon is one of the largest Texas refiners and it plans to invest $2 billion during the next five years to upgrade its Galveston Bay refinery as part of its South Texas Asset Repositioning, or STAR, program. The investments planned as part of the STAR program are intended to increase production of higher-value products and improve the facility's reliability, as well as increase processing capacity,†Heminger stated. These high-return investments will also fully integrate our Galveston Bay refinery with our Texas City refinery, making it the second-largest refinery in the U.S.†The fourth quarter also saw Marathon acquire Denver-based MarkWest Energy Partners after. The difficult deal was made after offering multiple cash sweeteners to convince MarkWest shareholders to sign off on the deal. MarkWest will become part of MPLX, which is Marathon's pipeline spin off. The transaction is expected to close in the second quarter of the year. MPLX is a master-limited partnership that passes on most of its earnings to unit holders in the form of distributions. However, Marathon on Wednesday reduced MPLX's distribution growth guidance in 2016 from 25 percent down to 12-15 percent. Heminger said the idea is to settle back†and let the market recover somewhat before increasing distributions again. He stressed the change is only temporary. Marathon also said it is cutting its planned 2016 capital spending from $4.2 billion down to $3.7 billion. http://everythingshale.com/news/2016/february/3/marathon-petroleum-profits-dip-more-than-75-percent/ http://everythingshale.com/news/2016/february/3/marathon-petroleum-profits-dip-more-than-75-percent/ Wed, 03 February 2016 08:01:22 http://everythingshale.com/news/2016/february/3/nov-records-15-billion-net-loss-for-the-fourth-quarter/ Houston-based National Oilwell Varco on Wednesday posted a $1.52 billion net loss for the final three months of the year amid the ongoing oil crash. The oilfield equipment and services giant saw its revenues drop 60 percent in the quarter, but NOV also recorded $1.63 billion in pre-tax impairment charges. NOV saw its stock value fall by more than 10 percent Wednesday morning after the earnings report was released. For the full year, NOV took a $767 million net loss, down from a $2.5 billion profit in 2014. NOV's 2015 revenues dropped 33 percent from the year prior. NOV Chairman, President and CEO Clay Williams said the deteriorating market conditions†proved worse than anticipated in the fourth quarter as oil prices continued to crater, including sharp volume decline and the renewed pricing pressure we've seen.†NOV remains well positioned for the eventual recovery, whenever it comes and wherever it shows up first,†Williams said. We have a tough road ahead, but we are laying the groundwork for our future success†Several energy companies have waited to post large impairment charges in the fourth quarter to address the shrinking values of their assets and more. Schlumberger posted a $1 billion fourth-quarter loss, while Halliburton recorded a smaller $28 million net loss. In an analyst note, Tudor, Pickering, Holt & Co. called NOV's earnings much worse than we envisioned,†adding that the most challenging quarter in some time reflects the harsh reality†of exploration and production companies slamming the brakes on spending. On a per-share basis, NOV's earnings were 40 cents a share after being adjusted for one-time costs. That's down from $1.84 a share a year prior. Williams said the lower-for-longer†period of low oil prices will eventually push demand to grow and provide the foundation for an eventual recovery. But he emphasized that NOV is not expecting much recovery in 2016, including a challenging first half of the year with more reduced revenues. He said NOV cut its workforce, including contractors, by 25 percent in 2015 and closed 75 facilities. Williams said he expects cuts to continue through the first half of 2016. NOV employed about 57,000 people globally as recently as 2014, including more than 14,000 in the Houston area. NOV counted among Houston's largest energy employers. Williams contended NOV still has a strong balance sheet and will look to make acquisitions going forward. NOV made seven smaller acquisitions last year, growing in areas where production remains strong like Saudi Arabia and Russia. Earlier this week, NOV said it plans to cut 129 Houston workers as the company closes its North Houston manufacturing facility near Greenspoint at Air Center Boulevard. The company said it will lay off workers in phases, beginning last week and lasting until June. NOV said some workers had been laid off with little advance notice, and that those employees had been provided additional pay and benefits. In November, NOV said it was cutting 120 employees as it shuttered a plant in San Angelo. Williams has said the company will continue slashing costs wherever possible, including shuttering plants. http://everythingshale.com/news/2016/february/3/nov-records-15-billion-net-loss-for-the-fourth-quarter/ http://everythingshale.com/news/2016/february/3/nov-records-15-billion-net-loss-for-the-fourth-quarter/ Wed, 03 February 2016 07:04:38 http://everythingshale.com/news/2016/february/02/3-reasons-why-advanced-manufacturing-institutes-matter/ As President Obama said during his final State of the Union Address , American manufacturing is surging with almost 900,000 new jobs created in the past six years. While that's incredible progress, how do we take manufacturing to the next level? The answer could be found in the National Network for Manufacturing Innovation (NNMI). The Institutes within this network are where businesses and government work together to commercialize and drive down the cost of advanced manufacturing technologies that make products and production processes better.  There are now eight Institutes, each focusing on a specific technology, each overseen by different federal agencies. The Energy Department currently spearheads: The Institute for Advanced Composites Manufacturing Innovation led by University of Tennessee Knoxville — This Institute is accelerating development of state-of-the-art advanced composites such as carbon fiber materials that are three times as strong and twice as light as the lightest metals, taking clean energy technologies like wind turbines to new heights. Power America led by North Carolina State University — Power America is developing the next generation of advanced power electronics , which can make everything from electronic devices and industrial motors to electric vehicles and power grids more energy-efficient than ever. The upcoming Institute on Smart Manufacturing — This Institute will develop advanced technologies to slash deployment costs for sensors, controls, platforms, modeling and other smart manufacturing tech. The Energy Department will also establish up to two more advanced manufacturing Institutes this year. These Institutes are on their way to making a big impact on American manufacturing. Here are three reasons why: 1. THEY'RE PROVIDING LEADERSHIP. Each Institute bridges the gap between applied research and product development by connecting businesses, academic institutions and federal agencies all in one place to support key emerging technology areas that encourage investment and production right here in the United States. 2. THEY'RE PREPARING AMERICA'S WORKERS FOR THE MANUFACTURING JOBS OF TOMORROW. The Institutes provide education opportunities and training to students and workers at all levels, all while sharing tools and equipment to help small businesses design, test and use new products and manufacturing processes. 3. THEY'RE POWERING INVESTMENTS IN ADVANCED MANUFACTURING. The Institutes fuel technological innovations that benefit both the public and private sector. As such, each Institute is launched with a five-year commitment by the federal government with equal or greater investment by the private sector. The NNMI will be even more important as the nation switches to cleaner forms of energy that slash carbon pollution. Go to Energy.gov/eere/amo for more on the Energy Department's advanced manufacturing work, and check out Energy.gov/eere/cemi  to learn how the Department is boosting U.S. competitiveness in clean energy manufacturing. http://everythingshale.com/news/2016/february/02/3-reasons-why-advanced-manufacturing-institutes-matter/ http://everythingshale.com/news/2016/february/02/3-reasons-why-advanced-manufacturing-institutes-matter/ Tue, 02 February 2016 16:00:42 http://everythingshale.com/news/2016/february/02/hot-or-cold-humid-or-dry-dust-or-salt-prefabricated-data-centers-can-handle-harsh-environments/ In Part I of this blog series , I laid out the issues around the urgent need in the oil and gas industry to modernize IT infrastructures to maximize performance and optimize operational levels. I also outlined how prefabricated data centers offer a unique solution to meet the industry’s unique requirements. Challenges include poor quality of existing infrastructure, small populations of professional expertise and some of the most inhospitable environments on earth. It’s these environments I’ll be highlighting in this post. Oil and gas operations are often managed out of locations with extreme temperatures, on offshore platforms or at sites exposed to sand, dust or high concentrations of air pollutants. Prefabricated data centers make special allowances for these difficult conditions. Environments with Sand & Dust Power and IT prefabricated modules can be fitted with data center vestibules to protect critical data by reducing cross-contamination between external air and the data center. An air lock entry is fitted with inner and outer doors that open in an alternating pattern so that only one set is open at any given time to prevent air infiltration into the IT space. To insulate against smoke gases and prevent heat spread, the rest of the external structure not protected by a vestibule is typically reinforced with 60 to 120 millimeter (mm) insulated panels. Air renovation and purification systems, customized with sand traps, can guarantee normal working conditions and sand trap customization should also be performed on condenser’s coils to avoid sand backlog. Marine & Offshore Marine environments present high concentrations of salt and chlorine, threatening erosion to the external structure and degradation of materials. High-performance coatings for highly corrosive environments up to ISO 12944 C4 and C5 classification can be requested. You should also consider periodical on-site maintenance services to detect and remediate issues related to corrosion. External condensers may also need to be treated with epoxy resins to prevent oxidation and/or corrosion of the internal coil. In the case of chilled water-based systems, metal components should be avoided and replaced with plastic materials wherever possible (i.e. piping). More efficient filters are also recommended. Hot & Humid Climates The sealing mechanisms must be reinforced with chemical sealants to protect the data center environment from water intrusion. You should also consider International Protection Marking (IP) X6 waterproof doors. Such doors are tested to withstand leakage by being exposed to water delivered through a 12.5 mm nozzle at a rate of 100 liters per minute at a pressure of 100 kilonewtons per square meter (kN/m2) for three minutes from a distance of 3 meters. Hot & Dry Climates In case of extreme hot and dry climates (45 C/113 F and up), some cooling considerations may apply. In general, the hotter the temperature, the weaker cooling systems perform. Condensers should be oversized and upgraded. R134a refrigerant gases are used instead of R410A and R407C, which are the industry standards for more temperate data center environments. Cold Climates In case of cold climates (-20 C/-4 F and below) some additional cooling considerations are applicable. Chilled water cooling: For condensation purposes, and in order to operate with low external temperatures, units must be fitted with crankcase heaters for the compressors and an anti-condensation heater for the electrical components and control boards. Units should also be fitted with antifreeze heaters on evaporators, pumps and water tanks. Direct expansion cooling: In temperatures of -40 C/F and below, condensers need to be fitted with refrigeration circuits and components optimized for extremely cold temperatures. Condensers equipped for these climates can feature high-resilience steel liquid receivers and flooding valves to control condensing temperature. Both can be designed to fit within the overall dimensions of the equipment. Prefabricated Benefits Overall, a prefab solution in harsh or remote environments optimizes installation and deployment by minimizing the need for many different construction disciplines on site. It reduces design and construction complexity and ensures reliability as a factory-built and tested data center and shortens delivery cycle time. Factory lead time is projected to be 16-20 weeks and the modules can be shipped anywhere in the world. For more on the benefits of prefabricated data centers in any industry, read White Paper 166.   Editor’s Note : These two blogs are based on a byline that originally appeared in Upstream Pumping . The post Hot or Cold; Humid or Dry; Dust or Salt; Prefabricated Data Centers Can Handle Harsh Environments appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/february/02/hot-or-cold-humid-or-dry-dust-or-salt-prefabricated-data-centers-can-handle-harsh-environments/ http://everythingshale.com/news/2016/february/02/hot-or-cold-humid-or-dry-dust-or-salt-prefabricated-data-centers-can-handle-harsh-environments/ Tue, 02 February 2016 13:47:39 http://everythingshale.com/news/2016/february/02/our-lng-exports-signal-from-iran/ Iran's plan to export liquefied natural gas (LNG) within two years is what you call a market signal, one that should cause U.S. policymakers to reconsider the ponderous pace with which proposed U.S. LNG export projects are gaining federal approval. The Wall Street Journal reported: Iran is pushing to find new ways to extract and export its vast natural-gas reserves, including developing facilities to liquefy the commodity and ship it to Europe in two years now that western sanctions are no longer in place, according to a top Iranian official. Iran holds the world's largest reserves of natural gas, but has long lacked the export infrastructure of competitors like Russia and Qatar. … Tehran is exploring several options to help the country join the international LNG club,†said Alireza Kameli, Managing Director of National Iranian Gas Export Co., in an interview here. Options for Iran include restarting its own advanced LNG export project that was halted in 2012 because of the western sanctions; building a pipeline under the Persian Gulf to Oman, which has LNG export facilities Iran might be able to use; and the construction of floating LNG facilities. Iranian officials say the country could export about 30 billion cubic meters (more than 1 trillion cubic feet) to the European Union long-term, the Journal reported. While experts may disagree over how soon Iranian LNG exports could reach global markets, it makes sense for the United States the world's leading natural gas and oil producer to capitalize on its natural gas abundance by speeding up federal approvals for domestic LNG exports to non-Free Trade Agreement countries. While a number of LNG export projects have received the go-ahead from Washington in the past couple of years, final non-FTA authorizations for more than 20 facilities remain under review at the Energy Department . Comprehensive energy legislation under debate in the U.S. Senate would expedite the process. Clearly though, the window of opportunity for U.S. LNG exports won't stay open forever. API President and CEO Jack Gerard wrote to Senate leaders last month: [Senate legislation] provides a streamlined process for natural gas export projects before the Department of Energy which will accelerate America's rise as a world-class exporter of natural gas, create U.S. jobs, grow our economy, and significantly strengthen the global energy market. And expediting the free trade of natural gas from America will help enhance our national security interests and bolster our global allies' independence from nations that would use their energy resources as a diplomatic and economic weapon. The United States has resumed exporting domestic crude oil after a four-decade hiatus. A raft of scholarly studies found that crude oil exports would encourage domestic production, benefit U.S. consumers and provide aid to U.S. allies overseas. A number of the same free-market principles apply to the export of U.S. LNG. Energy Department-commissioned studies in 2012 and 2015 found that increasing LNG exports would result in economic benefits with minimal impacts on domestic prices. An ICF International study found that easing self-imposed restrictions on U.S. LNG exports would create up to 452,300 new American jobs and add up to $73.6 billion in economic activity. As a leading natural gas producer, the United States should be a major player in the global LNG market alongside other major producers. The U.S. has become an energy superpower thanks to its shale energy revolution, unleashed by safe hydraulic fracturing and modern horizontal drilling. We have abundant natural gas to supply domestic needs while also supplying allies abroad. The current approvals process is anti-competitive, unnecessarily disadvantaging U.S. companies vying for opportunities in the global market opportunities that aren't guaranteed to last indefinitely. Gerard, from remarks at this year's State of American Energy event : Today, the global energy world is realigning with the United States poised to remain a dominant global player something unforeseen just a decade ago. The energy policy decisions we make today will determine whether this nation remains a positive and stabilizing force in the world's energy market and whether consumers can continue to count on reliable, affordable and abundant domestically produced energy for generations.†By Mark Green  Originally posted February 1 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/february/02/our-lng-exports-signal-from-iran/ http://everythingshale.com/news/2016/february/02/our-lng-exports-signal-from-iran/ Tue, 02 February 2016 13:00:14 http://everythingshale.com/news/2016/february/02/vertical-wells-and-conventional-activity-update/ Most of our attention during the past 18-months of sliding oil prices has been on the impact on US unconventional operations, and for good reason. The very technological advancement that brings future energy security to our beck and call has a very specific price: cash money. For all the efficiencies that a modern pad-drill operation adds to the equation, each well drilled and zipper-fracked costs a not insubstantial amount of money. And even with the 30% cost reduction at the expense of oilfield service providers to do those frack-jobs, operators are still having to pay 70% of a lot of money for every horizontal multi-stage well. Market Realist recently pegged the total cost to produce one barrel of crude oil in the US at $36.20, which puts us unfortunately high on the chart versus most other producing countries and, for the past month or so, on the wrong side of the price of oil. Now that most of the long term high-value hedges have expired, the reduction of OFS costs has been baked into the balance sheets, and Q4 2015s series of redeterminations and write-downs have taken their toll, what else are operators doing to keep costs down and output up? We have explored conventional E&P a little bit recently – Glenn R. McColpine’s excellent piece on optimizing stripper well performance and Mark Nibbelink’s great post on conventional E&P come to mind – but I thought it would be a good time to explore activity in the vertical/conventional realm. Occasionally we’ll use vertical wells as a proxy for conventional activity, though in the modern oilfield we see operators discussing combining multi-stage hydraulic fracture jobs and comingled production with less expensive vertical drilling, particularly in areas that have heavily stacked hydrocarbon formations – like the Permian Basin. Rather than split hairs today we will just discuss vertical activity. Vertical Permits are Visibly Down The following two images show Vertical Permits for calendar years 2014 and 2015. Year Over Year we see a fairly significant dropoff in Kansas, parts of the Permian, East Texas and Texas Gulf Coast. Vertical Rigs continue to be fairly active A quick look at current active vertical rigs in our Beta Production Desktop shows a lot of active rigs in the Permian, with a surrounding crescent of rigs starting on the lower gulf coast, swinging through Oklahoma, Kansas and ending in part of the Niobrara. Also we see some rigs in the Mississippi Gulf Coast, The Appalachian Basin, North Dakota, and California (where we discussed permits spiking last month) In the following image we see how the decline in vertical rigs roughly matches the drop in the more directional brethren, while the chart on the right shows that the percentage of total active vertical rigs has also shrunk as a portion of the fleet. Production from Vertical Wells In a future post I plan to investigate vertical production to see what sort of impact technology is making on the production of vertical wells, so stay tuned. http://everythingshale.com/news/2016/february/02/vertical-wells-and-conventional-activity-update/ http://everythingshale.com/news/2016/february/02/vertical-wells-and-conventional-activity-update/ Tue, 02 February 2016 13:00:02 http://everythingshale.com/news/2016/february/02/energy-news-roundup-bp-s-plummeting-stock-germany-turns-to-wind-nv-s-solar-proposal/ The newest measure of the oil industry's falling fortunes came on Tuesday in the form of a $3.3 billion fourth-quarter loss reported by BP. [ The NY Times ] Germany has overtaken the UK in the rate at which it is installing wind turbines at sea, industry figures show. [ The Guardian ] NV Energy is proposing “grandfathering” existing rooftop solar customers into lower rates if they installed their system or applied for one by Sept. 10, 2015. [ NBC News 3 ] http://everythingshale.com/news/2016/february/02/energy-news-roundup-bp-s-plummeting-stock-germany-turns-to-wind-nv-s-solar-proposal/ http://everythingshale.com/news/2016/february/02/energy-news-roundup-bp-s-plummeting-stock-germany-turns-to-wind-nv-s-solar-proposal/ Tue, 02 February 2016 12:00:11 http://everythingshale.com/news/2016/february/02/why-this-utility-giant-s-4-billion-coal-bailout-is-an-ill-fated-energy-strategy/ Clean energy investments are soaring worldwide, and the United States is no exception with $56 billion going toward renewable generation in 2015, an 8-percent increase over the year before. So why are some utilities going against this trend and risking a contest against more progressive competitors that are gaining market share at their expense? To understand why, it helps to have a closer look at Ohio-based FirstEnergy, a large investor-owned energy company with operations in six states that has become the poster child for resistant utilities. The FirstEnergy case also illustrates why companies that refuse change won't be able to stop the rising clean energy tide , no matter how hard they try. A $4-billion fossil bailout paid for by consumers At the moment, FirstEnergy has an expensive proposal to the tune of nearly $4 billion before the Public Utilities Commission of Ohio to protect its inefficient, polluting and unprofitable fleet of power plants. The utility has been trying to convince regulators to prop up its plants for the next eight years, essentially saddling people in Ohio with the cost of FirstEnergy's coal and nuclear investments. The company needs the money because it doubled down  on dirty power plants that became uneconomical when natural gas prices dropped and energy efficiencies took a bite out of the company's revenues. These decades-old energy assets are now at risk of getting stranded as power costs drop. If FirstEnergy prevails in the case it would be able to secure revenues well above what the market would provide from its uneconomical nuclear and coal plants through 2024, even if less expensive electricity became available elsewhere. Why this Utility Giant’s $4-billion Coal Bailout is an Ill-Fated Energy Strategy CLICK TO TWEET Competitors: We'll sell cleaner energy for less Other power producers say the FirstEnergy deal is nonsensical. Exelon has challenged FirstEnergy's proposal and offered to provide carbon-free energy at a lower price for the same time period. And major utility Dynegy recently  proposed  that it, too, can meet Ohio's electric demand more competitively than FirstEnergy's subsidized power plants. These companies' alternative deals would not only avoid the multibillions in subsidy costs, but also provide multibillions of dollars in savings. Time is on their side as well, because cleaner energy is on the move regardless of the outcome in the Ohio utility rate case. Investment in renewable energy sources worldwide reached a record high of $329 billion in 2015, and came in spite of falling oil and gas prices. Today, there's a business case to be made for power sources such as sun and wind, and against carbon-based fuels that trap heat in the atmosphere. These utilities get it Not surprisingly, a number of American utilities are now taking steps to phase out coal, and invest in clean energy sources and energy efficiency programs . California's three largest utilities will soon create roadmaps to incorporate more distributed energy resources, such as rooftop solar and electric vehicles, onto the grid. In Illinois, electric and gas companies are partnering with environmental and consumer groups to dramatically increase adoption of smart thermostats in the state. And in oil-rich Texas, the state's biggest electricity generator with a coal-heavy fleet, Luminant, recently  announced plans  to power more than 50,000 homes with West Texas solar by late 2016. By bucking the tide of the global move to clean energy, FirstEnergy's strategy is ultimately doomed, because economics is now driving these changes. FirstEnergy, by clinging to old and dirty assets, will be on the losing end of the new energy economy. By Dick Munson  Originally Published on January 29, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/february/02/why-this-utility-giant-s-4-billion-coal-bailout-is-an-ill-fated-energy-strategy/ http://everythingshale.com/news/2016/february/02/why-this-utility-giant-s-4-billion-coal-bailout-is-an-ill-fated-energy-strategy/ Tue, 02 February 2016 09:00:56 http://everythingshale.com/news/2016/february/1/the-world-is-flat-at-least-for-global-ethylene-producers-while-oil-prices-are-low/ On Jan. 20, WTI and Dated Brent closed at $26.54/b and 25.96/b, respectively, the lowest we have seen oil prices since 2003. Since then we have seen prices rise and hover around the $30/b level. Unlike ethane, naphtha is highly correlated with the price of oil. Therefore, fluctuations in global oil prices will have a major impact on steam crackers, more so in Europe and Asia where most producers utilize naphtha as a feedstock for producing ethylene. The title of Thomas Friedman’s renowned book The World is Flat  suggests that the world is equalizing in terms of opportunity for commerce. In this case, the low oil prices are pushing down global naphtha prices and allowing ethylene producers using naphtha as a feedstock to be more competitive —therefore leveling out the playing field. Below we see a snapshot of ethylene competitiveness in this low oil price environment by comparing production costs for theoretical 1 million mt/year steam crackers using 100% of the preferred feedstock for that particular region, with the exception of the US ethane/propane mix unit. Note: Our cost model uses the net feedstock cost, the difference between the feedstock and co-products, and adds variable costs and general fixed costs to calculate the total cracker production costs. All prices used in our calculations are based on Platts global prices.  Using Jan. 24 prices, the production costs for Saudi ethylene producers are still among the lowest globally in spite of their recent increase in ethane prices. While the production costs for producers in Saudi Arabia have risen, production costs for Northwest Europe, Northeast Asia, and Southeast Asia — typically the highest-cost ethylene producers in the world — have dropped significantly amid the recent fall in global crude prices. As shown in the chart, production costs for Southeast Asia are at par with US ethane, a big change compared to June 2014 when oil prices peaked and ethylene producers in Europe and Asia were struggling to remain profitable. To better understand the math behind the charts, let’s first look at the cost of feedstock to produce 1 mt of ethylene for Europe and Asia. Average monthly naphtha prices for Europe dropped by 24% from December to January. Average naphtha prices for Northeast Asia and Southeast Asia fell nearly 30% over the same period. Using typical steam cracker yields, the price of the amount of naphtha needed to produce 1 mt of ethylene is $836/mt for Europe, $850.38/mt for Northeast Asia, and $813.71/mt for Southeast Asia, still relatively high compared to the price of the amount of feedstock for ethane based crackers in the US and the Middle East. However, the value of the co-products (such as propylene, crude C4s, pygas, gasoil, hydrogen) for naphtha-based crackers is much higher than the value of the co-products for ethane-based crackers. The value of the co-products for Northwest Europe totaled $657.87/mt based on Jan. 24 prices. The co-products value for Northeast Asia and Southeast Asia totaled $753.57/mt and $784.08/mt, respectively. When we subtract the feedstock price from the co-product values we get the net feedstock prices, one of the three components we use to calculate the total production costs. According to Platts editor Maithreyi Ramdas, “Traders are saying that with feedstock naphtha prices at around $300/mt, C&F Japan, costs would obviously have fallen for ethylene producers using naphtha.” “The naphtha/ethylene margins are currently at $625/mt, which is pretty healthy considering typical breakeven levels of $250/mt,” Ramdas added. “Producers are making money; margins are much higher because of the low naphtha prices,” sources in China said. Platts Analytics does not expect this to continue unless oil stays at this level or drops even further. According to Bentek’s latest oil forecast, the price of crude is expected to increase back to the $40/bbl level within the next three months, and not expected to hit the $50/bbl mark until March or April of 2017. In the meantime, producers in Europe and Asia will continue to enjoy high profits due to the lower production costs stemming from the low crude prices. In terms of competiveness, as Thomas Friedman says, “the world is flat” — at least for the moment. Platts Global Polyolefins Outlook Platts Global Polyolefins Outlook report and accompanying dataset helps you to understand how today’s wide cracking margins are incentivizing a rush for new capacity and how this might erode the US feedstock advantage after 2017. http://everythingshale.com/news/2016/february/1/the-world-is-flat-at-least-for-global-ethylene-producers-while-oil-prices-are-low/ http://everythingshale.com/news/2016/february/1/the-world-is-flat-at-least-for-global-ethylene-producers-while-oil-prices-are-low/ Mon, 01 February 2016 23:01:11 http://everythingshale.com/news/2016/february/1/have-gasoline-futures-reached-a-bottom/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices Despite a 2.2% rally on expiration day by the February gasoline futures contract traded on the New York Mercantile Exchange in closing out January, gasoline futures with nearest delivery ended the month down 16.4cts or 12.9% at $1.1031 gallon, with renewed selling ushering in February. Nearest delivered gasoline futures broke below $1 gallon during the final week of January, trading at a $0.9924 better-than seven-year low on January 27. Nonetheless gasoline futures, known as the Reformulated Blendstock for Oxygenate Blending contract, should find some price support relative to crude oil with the start of the refinery maintenance season and the transition to lower Reid Vapor Pressure specifications, with lower RVP gasoline more costly to produce. RVP ratings measure the release of harmful emissions from gasoline referred to as volatile organic compounds, which occur more readily in warmer weather. The forward curve—the value of futures contracts for later delivery, suggests nearest delivered RBOB futures plumbed a seasonal low in late January, with the March contract trading at a more than 20cts gallon discount to April delivery and through the summer months. In years past, the calendar spread illustrated the winter-to-spring rally by RBOB futures, with the combination of refinery maintenance, the RVP transition and expectations for greater driving demand as the weather turns warmer pushing gasoline prices higher. Yet 2016 has already demonstrated insolence for history and past practice, with global equity markets in turmoil, a rebellious US presidential race that has confounded political pundits, and what some analysts suggest is a reordering of world order serving as exhibits a, b and c. Oh, and US crude production in mid-January is on par with a year ago at 9.221 million bpd, up 8,000 bpd from January 2014, despite 807 fewer rigs looking for oil, data from the Energy Information Administration and Baker Hughes Inc., respectively, shows. Economic Picture of Gas Demand An economic picture, although starting to blur, does support expectations for robust gasoline demand in the United States, with consumer confidence reaching a three-month in January according to the Conference Board’s Consumer Confidence Index, with lower gasoline prices supporting sentiment. Consumer spending continues to increase, albeit at a slower pace than market expectations, with more citizens banking their savings from lower fuel costs. Meanwhile, low retail gasoline prices, at a seven-year low well under $2 gallon, also act as a stimulus for greater driving. However, the economic backdrop is cluttered, with US manufacturing contracting for the fourth consecutive month in January, and fourth quarter 2015 US gross domestic product reported at a meager 0.7% annualized growth rate. Prices for the benchmark crude contracts, West Texas Intermediate on NYMEX and Brent crude futures on the IntercontinentalExchange, have advanced from better-than 12-year lows in the mid to upper $20s bbl to the mid-$30s bbl before slipping to the low $30s bbl on the first day of trade in February. Crude prices are again expected to come under pressure during the refinery maintenance season, when refiners cut back on buying crude amid unit outages. The cutback in crude buying is expected to accelerate supply building, with US commercial inventory already at a record high of 494.9 million bbl on January 22, and set to top 500 million bbl. The EIA tells us crude costs accounted for 42.2% of the price of each gallon of gasoline sold at retail outlets in December 2015, down from 46.1% in November, and well below December 2014 when crude costs made up 56.7% of each gallon of gasoline sold at the pump. In fact, the smaller share of crude costs in December’s gallon of gasoline was the lowest since June 2004 when it was 40.4%. Since January 2000, crude costs accounted for as much as 80% of each gallon of gasoline at the retail level in December 2011 and the lowest in May 2001 at 35%, so gasoline prices can and do diverge from the crude price pattern. Still, US gasoline inventory was tallied last at 248.5 million bbl on January 22 by the EIA, the largest amount of gasoline supply held since early 1990. Meanwhile, even though US consumers have been purchasing more pickup trucks and SUVs with the collapse in crude prices, these vehicles remain more efficient than previous models, with the EIA most recently forecasting a modest 70,000 bpd or 0.8% year-on-year increase in US gasoline demand in 2016 after 2015’s 270,000 bpd or 1.4% expansion.   The post Have Gasoline Futures Reached a Bottom? appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/february/1/have-gasoline-futures-reached-a-bottom/ http://everythingshale.com/news/2016/february/1/have-gasoline-futures-reached-a-bottom/ Mon, 01 February 2016 19:35:33 http://everythingshale.com/news/2016/february/1/10-things-i-love-about-my-electric-vehicle/ The stars aligned for me a couple years back.  My employer opened a new employee parking garage equipped with 36 plug-in electric vehicle (EV) charging stations, and I was ready to park my pickup for a more fuel-efficient daily commuter. I'd still need the truck to pull our trailer and take trips to the home improvement store, but the $250/month fuel bill just wasn't practical.  In fact, my goal was to get a car payment below that amount and charge primarily at work. So while it seemed like a big jump, our family chose an all-electric vehicle. Two years later, I can definitely say there's no turning back! It was a great decision, and here are my top 10 reasons why I love my electric car: Pure economics. While I usually use workplace charging, when I do plug in at home, the electricity costs the equivalent of $1.22/gallon , less than half of even today's very low gasoline prices. My EV is also rated at just over 100 mpge (mpg equivalent). Either way you look at it, the savings are clear. It drives like any other car. I honestly expected my EV to ride and handle like a clunky electric golf cart. Not only does it drive like any other car of its size, it's quite peppy! The nearly silent operation does take some getting used to, though. It fit our lifestyle. Until I really thought about it, I was worried that an EV wouldn't suit all my needs—especially those occasional long trips beyond the battery's range. The fact is that most household trips are within a 25-mile radius, and that applies to both my wife and me. We do have a second car, but the EV easily covers 9 out of 10 trips we need to make—including most of those to the home improvement store! Charging at work. This fantastic benefit doubles the potential all-electric commute range for employees who would otherwise have to rely on charging at home.  Now it's also easy to locate and use public stations if they don't have access to a charger at home. No charger installation. Because I can charge the vehicle at work, I rarely have to charge at home.  When I do, the dealer-supplied 110-volt cord set is adequate for an overnight charge. Charging at work for free . This is a nice perk, but with low electricity prices and the extreme efficiency of the vehicle, it's just icing on the cake. Charging at work with solar energy . Did I mention that the garage and chargers are solar powered? Sure, we can have a long discussion about life-cycle greenhouse gas emissions and how the American electric grid still relies on fossil fuels, but the fact is that my car is primarily powered by sunlight! An affordable lease. I was interested in a low-risk lease because (1) I was a little unsure how long the battery would last before needing replacement, (2) I wanted to keep my options open as more EV models became available in my area over time, and (3) I still wasn't sure I wanted to make a long-term commitment to something so new and different.  In fact, I found that I could actually pay for the lease on my EV with the amount of money I was previously spending just on fuel to drive to and from work with my pick-up. My wife loves it, too! In addition to solar-powered workplace charging, my company's progressive sustainability practices allow me to telecommute two days a week. On these days, my wife drives the EV to work.  So, not only does the EV virtually eliminate my fuel bill, it cuts her fuel bill by about 40%. Telling people about it. Most people don't understand EVs, or they think of them as a novelty. Once I share a few of the facts above, people usually end up nodding in surprise. Gotta love that agreement! I understand that an EV isn't for everyone, but if you go through the considerations, you may be surprised at just how well an EV would work for your lifestyle! http://everythingshale.com/news/2016/february/1/10-things-i-love-about-my-electric-vehicle/ http://everythingshale.com/news/2016/february/1/10-things-i-love-about-my-electric-vehicle/ Mon, 01 February 2016 16:00:45 http://everythingshale.com/news/2016/february/1/anadarko-posts-125b-loss-to-cut-2016-spending-in-half/ Special charges, including after-tax impairments on the company's producing properties and its exploration assets, totaled $954 million. Its loss of $1.25 billion, or $2.45 a share, in the October-December period, compared to a loss of $395 million, or 78 cents a share, in the same period the year before. Revenues sank 77 percent to $2.1 billion. Anadarko CEO Al Walker said the oil explorer's decision last year not to expand its drilling program while energy prices languished paid off because oil and gas markets haven't yet recovered. We did not expect oil prices to recover in 2015 and believed it could take well into 2016 before markets would stabilize on a sustained basis,†Anadarko CEO Al Walker in a written statement. Value enhancement drove our capital-allocation philosophy.†The company said it expects to spend $2.8 billion in capital this year, about 50 percent lower a deeper spending cut than last year. The firm had cut its capital budget 40 percent in 2015. Greater market dislocation appears likely,†Walker said. The need to again materially lower our capital spending, while continuing to pursue value creation and preservation, is our best course of action.†The capital budget cuts would bring its 2016 spending down 70 percent compared to 2014. Walker said the company became more efficient last year, and spent $500 million less on overhead, all the while boosting oil production by 25,000 barrels a day. It sold off $2 billion in assets. Last year, the firm said, it spent more of its budget on big deep-water projects and exploration considered long-term cash cycle projects that take a lot more time to develop than onshore U.S. shale plays, which have quick bursts of production at first but rapidly deteriorate if investments decline. In the United States, Anadarko concentrated on its prized Wattenberg field in Colorado. It cut its drilling costs per foot in half and brought down well-stimulation costs about a third, but output increased 30 percent. It also improved results in the Delaware Basin in West Texas. Its Lucius spar came online in the Gulf of Mexico this time last year and its Heidelberg spar was brought into production this month. http://everythingshale.com/news/2016/february/1/anadarko-posts-125b-loss-to-cut-2016-spending-in-half/ http://everythingshale.com/news/2016/february/1/anadarko-posts-125b-loss-to-cut-2016-spending-in-half/ Mon, 01 February 2016 15:34:49 http://everythingshale.com/news/2016/february/1/trucks-will-move-oil-stored-after-california-pipeline-break/ LOS ANGELES — Exxon Mobil Corp. won approval Monday for its plan to use trucks to move more than 17 million gallons of oil stranded in storage tanks after a California pipeline break in May, despite concerns from environmentalists that highway safety could be jeopardized. The Santa Barbara County Planning and Development Department endorsed the proposal, which lets the company run up to 30 truck trips a day for as long as six months to move the marooned crude. Eight months ago, the ruptured pipeline created the largest coastal oil spill in California in 25 years, fouling beaches near Santa Barbara and spreading goo as far as 100 miles. The pipeline is shut indefinitely. In a statement, the county said moving the oil would decrease the potential risks posed by long-term storage, since the pipeline is expected to be inoperable for a prolonged period. The trucking is expected to begin within three weeks. The company said it will continue to coordinate with local officials as it prepares to remove the stored oil. For years, Santa Barbara County has frowned on producers transporting crude by truck, instead preferring pipelines. Kristen Monsell, an attorney with the Center for Biological Diversity, called the decision a “dangerous exception.” The county’s ruling puts people and the environment at risk of “fiery accidents or another devastating oil spill,” she said in an email. On May 19, a 6-inch breach along a corroded section of pipeline west of Santa Barbara, owned by Houston-based Plains All American Pipeline, caused thousands of gallons of oil to spill onto the beach while creating an ocean slick that spread for miles along the coast. The company has been criticized for taking about 90 minutes to alert federal responders after confirming the spill. Prosecutors are investigating the leak for any violations of law. Federal investigators have not determined the cause, but preliminary information suggests corrosion was the culprit. The cleanup is completed, although investigations and monitoring of the spill area continue. State and federal officials are in the early stages of a comprehensive study of damage, which includes assessing harm to seabirds, fish and the habitat. The spill was initially believed to be up to 101,000 gallons, but later calculations tentatively pegged the maximum amount at 126,000 gallons, according to company filings with federal regulators. The company estimated total costs from the break at $257 million, which would include cleanup, any third-party claim settlements, estimates for fines and legal fees and other costs. The company has said that bill will be offset by an estimated $192 million in insurance. Plains All American Pipeline has warned leaving the oil in tanks indefinitely posed risks. “The lack of a pipeline to quickly empty the . crude storage tanks during a natural disaster or unforeseen circumstance could potentially result in the loss or damage to property, the environment or essential public services,” the company said in its application for a permit. http://everythingshale.com/news/2016/february/1/trucks-will-move-oil-stored-after-california-pipeline-break/ http://everythingshale.com/news/2016/february/1/trucks-will-move-oil-stored-after-california-pipeline-break/ Mon, 01 February 2016 15:28:48 http://everythingshale.com/news/2016/february/1/february-starts-with-the-national-gasoline-average-below-180/ The month of February kicked off Monday with gasoline costs in the Houston area averaging less than $1.60 a gallon and, nationwide, under $1.80 per gallon. The Houston region and Texas overall averaged $1.58 a gallon on Monday — it's lowest point since January 2009 — and $1.79 a gallon nationally, according to GasBuddy's daily survey data. The price fell by 2.4 cents in the last week in Houston and by about 2.6 cents in the U.S. overall. The national average is down 20 cents just in the last month. Gasoline prices may continue to drop some this month but then begin to increase in a few weeks once U.S. refiners begin maintenance work to switch over to more expensive summer-blend fuels. Gasoline prices have continued to drop in the wake of lower oil prices because crude is the feedstock for refineries. Refiners have already begun some winter maintenance, and while supply of winter gasoline is abnormally high, once that inventory is liquidated, I fully expect gasoline prices to march higher,†said  Patrick DeHaan, GasBuddy senior petroleum analyst, in a prepared statement. As for the new month specifically, Monday marked the cheapest gasoline in a February since 2004. Oklahoma has the lowest-cost gasoline nationwide at $1.46 a gallon, according to GasBuddy, while Hawaii is the priciest at $2.63 per gallon. In the Houston area, gasoline is as cheap as $1.34 a gallon at some service stations in North Houston and Pasadena, and as pricey as $2.59 per gallon at a Shell station just off of Interstate 10 at Shepherd Drive. http://everythingshale.com/news/2016/february/1/february-starts-with-the-national-gasoline-average-below-180/ http://everythingshale.com/news/2016/february/1/february-starts-with-the-national-gasoline-average-below-180/ Mon, 01 February 2016 14:51:10 http://everythingshale.com/news/2016/february/1/banks-finally-found-religion-at-30-oil-lawyers-see-wave-of-bankruptcies/ HOUSTON – Bankruptcy paperwork could pile up high in Texas this year if the oil downturn keeps the pressure up on everything from oil drillers and trucking companies to hotels and caterers near the oil patch. More than two dozen Texas bankruptcy attorneys expect a 30 percent increase in corporate restructurings and bankruptcy filings in the state this year, according to a sampling of bankruptcy attorneys by Houston law firm HSSK. That means 800 more of the state’s businesses than last year could be forced into drastic action in 2016, with the financial stress concentrated in the Eagle Ford Shale and the Permian Basin, spreading to wastewater treatment plant operators and laundromats in remote oil towns and ultimately affecting things like legal services and commercial real estate in Houston. “It’s a domino effect,” said Marc Schwartz, bankruptcy attorney and founder of HSSK, in a recent interview. “But the further out you get from the epicenter, the less pervasive the impact.” The firms that could go bankrupt or restructure this year are tied to an estimated $84 billion in assets in Texas. Based on the survey, HSSK believes the number of Texas bankruptcies and restructurings could reach 3,468 this year. That’s about 13 percent higher than the average for the past decade, but it’s a quarter lower than the financial crisis in 2009. That’s because even though the oil bust is more severe this time around, banks are collectively a lot healthier now than during the national credit crunch seven years ago. Schwartz says the lessons learned then and during the 1980s oil bust are coming into sharper view. To fight the oil-market meltdown in Texas, companies “have to be Attila the Hun when it comes to cost-cutting.” “I tell them, you’ve got to be attractive (to investors). You’re an ugly duck – but you’ve got to be the best-looking ugly duck on the street now,” Schwartz said. “Your existing lenders can put you into bankruptcy.” But it is often too hard for companies to make tough choices, and “the catharsis of the debtor” many times will get the best of managers headed for bankruptcy. “They can’t bring themselves to tell the 30-year administrative assistant that they’re gone, or tell everybody on the payroll they’re getting a 10-percent pay cut,” he said. “But to survive, that’s what you have to do. Some of them don’t survive, some of them do.” An influx of bankruptcies would add another economic headache in Texas after the layoffs of approximately 60,000 upstream oil and gas workers, according to economist Karr Ingham . But the state is much better-equipped to handle it now than in the 1980s oil bust because the state’s financial system is propped up by big banks tied to trillions in assets and the state’s real estate market is just showing the first hints of distress. Three decades ago, Texas banks were extremely small – each branch was its own entity, per state regulations. Hundreds failed. Still, big Wall Street banks and smaller Texas lenders are preparing for the flurry of energy loan defaults as oil prices slip into territory that makes it impossible to make money on expensive shale drilling in remote parts of the state. JPMorgan Chase, Wells Fargo and other big financial institutions have set aside 5 to 7 percent more cash as a cushion against loans losses, but if oil prices remain low for the rest of the year those losses could rise to 10 percent – the same amount that some banks lost during the 1980s, Evercore ISI estimates. “With oil here in the $30s, the banks have finally found religion,” said John Pancari, analyst at Evercore ISI, in a recent conference call with investors. “They’re ramping up loan loss reserves and recognizing their criticized assets, but there’s still more pain to be had.” http://everythingshale.com/news/2016/february/1/banks-finally-found-religion-at-30-oil-lawyers-see-wave-of-bankruptcies/ http://everythingshale.com/news/2016/february/1/banks-finally-found-religion-at-30-oil-lawyers-see-wave-of-bankruptcies/ Mon, 01 February 2016 14:49:47 http://everythingshale.com/news/2016/february/1/north-dakota-governor-orders-cuts-due-to-low-oil-prices/ BISMARCK, N.D. — North Dakota Gov. Jack Dalrymple on Monday ordered deep cuts to government agencies and a massive raid on state savings to make up for a more than $1 billion budget shortfall due to depressed crude prices and a drop in oil drilling. The state had more than $2 billion in various reserve accounts just one year ago, but oil prices — a key contributor to the state’s wealth — have taken a nosedive in the past year. The Legislature’s record-high $14.4 billion budget for the two years that began July 1 was built on oil prices and economic assumptions that have fallen “much greater than anyone would have predicted,” the governor said. “After 15 years of receiving almost entirely good news about the growth in revenues for North Dakota, it seems strange to hear that things have gone in the other direction,” the Republican told state agency officials at the state Capitol in Bismarck. To balance the budget, Dalrymple ordered agencies to cut their budgets by 4.05 percent, which will save the state about $245 million through the spending cycle. The governor also will take more than $497 million from the state’s Budget Stabilization Fund, a surplus stash of cash that has been built up over the past decade largely from past oil bounty. That fund will now have a balance of about $75 million. Dalrymple is only the third governor to tap the fund. Then-Gov. John Hoeven used it in 2002, and former Gov. George Sinner did so during the 1980s, due to depressed prices for crops and oil. The remainder of the shortfall will be made up by using the previously anticipated ending fund balance of about $331 million. Still, North Dakota will have about $875 million in surplus cash in various reserve accounts, according to Pam Sharp, the state’s budget director. And that doesn’t include the oil tax-funded “Legacy Fund,” which holds more than $3.5 billion. The fund was approved by voters in 2010, and receives 30 percent of the state’s oil tax collections, though none of the money can be spent until 2017. North Dakota became the nation’s second top oil-producing state, behind only Texas, thanks to the booming oil patch in the western part of the state. A one-time spending spill signed by Dalrymple last February fast-tracked $1.1 billion for highways and communities affected by the state’s exploding growth, nearly depleting the Strategic Investment and Improvement Fund, which is funded in part with oil and gas taxes. Most of the money was spent in western North Dakota, which has been overwhelmed with spending needs on roads, utilities, housing and schools. http://everythingshale.com/news/2016/february/1/north-dakota-governor-orders-cuts-due-to-low-oil-prices/ http://everythingshale.com/news/2016/february/1/north-dakota-governor-orders-cuts-due-to-low-oil-prices/ Mon, 01 February 2016 14:40:33 http://everythingshale.com/news/2016/february/1/energy-news-roundup-yusko-s-credit-prediction-ge-to-phase-out-cfls-indiana-s-utility-restructuring/ Morgan Creek Capital Management chief Mark Yusko said Monday he’s on the same page with Carl Icahn when the billionaire investor says there’s danger ahead in credit markets due to falling oil prices. [ CNBC ] The industrial giant General Electric is saying farewell to the compact fluorescent light, or CFL prompting a full transition to LED bulbs. [ The NY Times ] The northern Indiana utility NIPSCO argues, as other utilities around the country have, that it needs the rate structure revision to make sure that all customers pay their fair share for upkeep of the grid. [ Midwest Energy News ] http://everythingshale.com/news/2016/february/1/energy-news-roundup-yusko-s-credit-prediction-ge-to-phase-out-cfls-indiana-s-utility-restructuring/ http://everythingshale.com/news/2016/february/1/energy-news-roundup-yusko-s-credit-prediction-ge-to-phase-out-cfls-indiana-s-utility-restructuring/ Mon, 01 February 2016 12:00:08 http://everythingshale.com/news/2016/february/1/energy-companies-detail-hundreds-more-layoffs/ More on the oil crash:  Chevron delays big projects, plows the Permian Basin Phillips 66 profits plummet 43 percent $230 billion in oil projects mothballed because of cheap crude HOUSTON — Companies detailed more than 900 energy industry job cuts across the state to Texas regulators, as the industry continues to struggle amid low prices. The cuts affect both production and oilfield services companies, according to Texas Workforce Commission data released Monday. A look at cuts reported: Southwestern Energy Co., a Houston-based natural gas producer, said it will lay off 376 workers from its Spring, Texas offices by March 22. Southwestern had previously announced plans to shed 40 percent of its workforce or 1,100 jobs total as it adapts to low natural gas prices. The driller said in January it expects a $60 million to $70 million pre-tax charge for severance payments and other costs related the full reduction. Quicksilver Resources Inc., a Fort Worth-based oil and gas producer, said it plans to lay off a total of 164 workers in Tarrant, Somervell and Denton counties. Quicksilver filed for Chapter 11 bankruptcy protection in March 2015. Maersk Drilling USA, a branch of the Copenhagen, Denmark-based rig operator, said it had already begun notifying 80 employees that work aboard the Maersk Developer that they'd be laid off. As recently as the summer of 2014, the semisubmersible Maerk Developer had been drilling an exploratory well in the Gulf of Mexico for Norway's Statoil. But the oil bust and drilling pullback has been hard on offshore drillers, and Maersk said it plans on cutting the workers and mothballing the rig. National Oilwell Varco, an oilfield services giant based in Houston, said it plans to cut 129 workers as the company closes its manufacturing facility at 16211 Air Center Boulevard. The company said it will lay off workers in phases, beginning last week and lasting until June. NOV said that some workers had been laid off with little advance notice, and that those employees had been provided additional pay and benefits. Tenaris, a global manufacturer of steel pipe, said it was shuttering its plant at 8204 Fairbanks N Houston Road on March 31, and that employees not transferred to other facilities would be laid off. The company said 166 employees would lose their jobs. http://everythingshale.com/news/2016/february/1/energy-companies-detail-hundreds-more-layoffs/ http://everythingshale.com/news/2016/february/1/energy-companies-detail-hundreds-more-layoffs/ Mon, 01 February 2016 11:34:12 http://everythingshale.com/news/2016/february/1/industry-study-predicts-gulf-drilling-plummet-from-safety-rule/ Under a proposed federal rule designed to prevent a repeat of the Deepwater Horizon oil spill, exploratory drilling in the Gulf of Mexico would decline 55 percent, according to a study released today by a Louisiana-based industry group. Announced last April by Secretary of the Interior Sally Jewel, the rule would tighten standards on blowout preventers – the device that failed in the case of Deepwater – as well as put more controls on how companies drill and monitor wells deep under the surface of the ocean. The study released Monday by the Gulf Economic Survival Team –  founded by Louisiana Governor Bobby Jindal in 2010 in response to a post-Deepwater drilling moratorium in the Gulf of Mexico – and the consulting firm Wood Mackenzie, predicts the rule would raise drilling costs to such a degree it would push many offshore rigs out of the area.  It forecasts a 35 percent drop in oil production from the Gulf by 2030, resulting in more than 100,000 jobs lost, mostly in Texas and Louisiana. “It is important that we conduct further study of the finer points and practical effects of this new rule before forcing it on companies engaged in operations in the Gulf. Our nation as a whole would feel the impact of reduced domestic energy production stemming from this rule, with a particularly harsh blow to Gulf energy-producing states,” said Lori LeBlanc, Executive Director of the Gulf Economic Survival Team. With review at the Department of Interior completed, the rule is readying for final analysis by Office of Budget and Management, after which it would be published in the federal register and go into effect within 90 days, according to the Bureau of Safety and Environmental Enforcement. The rule has drawn deep criticism from industry, who says it will stifle innovation and actually increase risk for drilling workers offshore. During a hearing in the senate Energy and Natural Resources Committee in December, members were divided, pitting those who argue for the need to protect the country’s seas against those who say the cost to the country’s energy industry is too great a toll. “Since 2010, there have been 23 separate ‘loss of well control incidents’,” Sen. Maria Cantwell, D-Washington, said in the hearing .  “We can’t afford this kind of risk,” Determining the cost of the rule itself is a cause of divide. BSEE estimates the reduction in oil spills and offshore accidents would actually create a net benefit of more than $650 million over ten years. “There will be some costs [for drillers],” said Gregory Julian, spokesman for the bureau. “But the standards are already being implemented by many of the operators – just not all of them.” The Wood Mackenzie study was based on an $80 price for crude oil. The U.S. benchmark West Texas Intermediate was trading around $32 a barrel Monday. http://everythingshale.com/news/2016/february/1/industry-study-predicts-gulf-drilling-plummet-from-safety-rule/ http://everythingshale.com/news/2016/february/1/industry-study-predicts-gulf-drilling-plummet-from-safety-rule/ Mon, 01 February 2016 10:29:59 http://everythingshale.com/news/2016/february/1/bp-upstream-chief-to-become-deputy-ceo-amid-reorganization/ HOUSTON – BP announced a reorganization of its top managers Monday and said its upstream chief will become deputy CEO and share duties with CEO Bob Dudley as the British oil major navigates one of the worst oil downturns in decades. The top-tier reshuffle could set up Lamar McKay, who has had a 35-year career at BP and has served as chief executive of its oil exploration and production unit since 2013, to eventually replace Dudley as BP chief executive. Dudley, appointed in 2010 after the Deepwater Horizon disaster, was the first American CEO of BP. McKay, also an American, will help shape BP’s strategy and long-term planning among other responsibilities. “These changes simplify, focus and better align accountabilities within our experienced and versatile senior team,” Dudley said in a written statement. “Lamar’s new role will allow us to further concentrate our attention on BP’s highest priorities through this challenging time for our whole industry.” McKay’s promotion comes after the retirement of Katrina Landis, executive vice president of corporate business activities, who will exit May 1. Landis had worked at BP for 24 years. Her current duties, BP said, will be dispersed among other executives. Bernard Looney, chief operating officer of production in the company’s upstream segment since 2013, will replace McKay. McKay, who now resides in London, was based in Houston during his four years as chairman and president of BP America. BP shares fell $1 on Monday to $31.37 on the New York Stock Exchange, as U.S. oil prices sank 5.3 percent as speculation that Russia and Saudi Arabia will make coordinated oil-supply cuts faded. http://everythingshale.com/news/2016/february/1/bp-upstream-chief-to-become-deputy-ceo-amid-reorganization/ http://everythingshale.com/news/2016/february/1/bp-upstream-chief-to-become-deputy-ceo-amid-reorganization/ Mon, 01 February 2016 10:20:01 http://everythingshale.com/news/2016/february/1/centerpoint-considers-selling-its-pipeline-business/ CenterPoint Energy said Monday it will consider selling Enable Midstream Partners, its financially struggling pipeline business. The Houston-based power line and electric distribution company also said it is weighing converting all or part of its utility businesses into a real estate investment trust, or REIT, business model that’s rare for the energy sector. In an analyst note, Houston-based Tudor, Pickering, Holt & Co. said the potential moves are consistent with its belief that CenterPoint is being pushed by activist investors to explore strategic moves and unload unprofitable business segments. Enable was created as joint venture by affiliates of CenterPoint, Oklahoma-based power company OGE Energy Corp. and private equity shop ArcLight Capital Partners in May 2013. It went public in 2014 with CenterPoint controlling a small majority of the business. CenterPoint recorded $537 million after-tax impairment charge for the third quarter of 2015 for Enable’s value. Enable is a master-limited partnership, or MLP, which is a publicly traded entity that does not pay corporate income taxes and is required to distribute most of its income to investors called unit holders in payments similar to stock dividends. Despite the financial question marks, CenterPoint President and CEO Scott Prochazka said in a prepared statement Monday he’s pleased with the Enable investment, noting that the business grew distributions last year despite the low oil and gas price environment. “With continued connections and drilling activity across its system, Enable is well-positioned for long-term growth as commodity markets recover,” Prochazka stated. “We believe that now is the right time to explore options for unlocking the value of our strategic investment, reflecting our continuous commitment to drive value for shareholders.” As for CenterPoint’s utility business, he noted that he is particularly interested in the potential of the REIT business model. A REIT sells like a stock and can operate properties ranging from a shopping center to timberland, but it is rarely harnessed in the energy sector. There is a proposal is pending to turn the Dallas-based Oncor transmission company into a REIT. The business structure pays most of its income to shareholders, but doesn’t have to pay tax on the income distributed to shareholders. “The REIT structure has recently received significant attention in the regulated utility industry in Texas and could have substantial potential for CenterPoint,” Prochazka added. “We will continue to study the possibilities and monitor developments, including related regulatory proceedings and will present any findings to our shareholders at the appropriate time.” Monday’s news comes just after CenterPoint announced Friday that it was growing more nationally by purchasing the retail natural gas businesses of Houston-based Continuum Energy for about $77 million. The deal will allow CenterPoint to serve more residential and commercial customers outside of Texas. http://everythingshale.com/news/2016/february/1/centerpoint-considers-selling-its-pipeline-business/ http://everythingshale.com/news/2016/february/1/centerpoint-considers-selling-its-pipeline-business/ Mon, 01 February 2016 09:49:37 http://everythingshale.com/news/2016/february/1/us-oil-gas-sector-things-to-get-worse-before-they-get-better/ China kicked things off overnight, setting a cautious tone with its worst official manufacturing print since August 2012. The Caixin manufacturing release also showed ongoing contraction from the sector, but in contrast was better than consensus. Eurozone manufacturing was in line with consensus, boosted by Germany and Spain, held back by Italy and France. Japan was below consensus, but showing expansion; Brazil was above consensus, but showing contraction. The US is on deck shortly, likely showing ongoing contraction too. The crude complex is getting a solid dose of the WBWs (whoop-bang-wallops) today, as Chinese economic worries weigh and expectations of a coordinated cut wane. The latest CFTC data show an interesting quirk; not only did we see short positions cut (that bit isn't so surprising), but we also saw speculative long positions increase significantly . This means that net-longs increased by the most (in percentage terms) since October 2010: The chart below is from this piece over the weekend, which takes a look at the historical contribution of the oil and gas sector to the US economy. While in the late 1990s its share accounted for less than 1% of the economy (as the broader economy boomed), the deterioration of the sector in the midst of the great recession meant it was a drag on the economy in 2009. Last year it accounted for 3.1% of GDP, but after providing a boost to the economy for the majority of the five-year period from 2010-2014, it has been dragging it lower for the last two quarters. That said, this drop doesn't account for the offsetting benefit from lower fuel prices. Nonetheless, while emphasis remains on the lopsided oversupplied nature of the market, global demand is continuing to see the benefit of lower fuel prices. Bank of America suggest ( via Bloomberg ) that the mother lode of wealth transferance is underway. If the current price plunge persists, we will see the equivalent of $3 trillion a year being passed from oil producers to global consumers. Accordingly, the bank sees oil demand growth continuing to hold well above one million barrels per day, in a similar vein to our three musketeers EIA, IEA, and OPEC. Finally, it looks like things are going to get worse before they get better for the US oil and gas sector.  According to IHS , North American E&Ps have only hedged 14% of their oil production volumes in 2016. Small US E&Ps have 47% of their oil production hedged for this year (at $74.31/bbl), while midsize US E&Ps have 43% hedged (at $60.54/bbl); large US E&Ps only have 6% hedged (at $53.85/bbl). This means 2016 is set to be a year of increasing financial stress on the sector, amid dwindling revenues… http://everythingshale.com/news/2016/february/1/us-oil-gas-sector-things-to-get-worse-before-they-get-better/ http://everythingshale.com/news/2016/february/1/us-oil-gas-sector-things-to-get-worse-before-they-get-better/ Mon, 01 February 2016 09:18:10 http://everythingshale.com/news/2016/february/1/california-leak-exposes-risks-of-increasing-reliance-on-natural-gas/ On January 15, 2016, the California Department of Conservation (DOC) issued a notice of intent to propose emergency natural gas storage regulations in response to Governor Brown's emergency proclamation to address the ongoing natural gas leak at the Aliso Canyon Natural Gas Storage Facility in Los Angeles County. The leak, detected in October 2015, is attributed to the failure of a 40-year-old pipe more than a thousand feet underground, allowing pressurized gas to flow back to the surface and into the atmosphere. While the methane emissions rate has been slowing due to reducing pressure from gas withdrawals, at one point, the leak was estimated to account for 25 percent of all methane emissions in the state. Underground gas storage facilities involve injection of large quantities of gas into underground reservoirs for withdrawal during peak load periods. Industry stores methane underground in depleted oil and gas fields, aquifers, or salt caverns for future use as it is more economic than storing gas in tanks on the surface. The Aliso Canyon storage facility is an oil field that was converted into a natural gas storage reservoir in the 1970s. Although natural gas storage is critical for the economy and grid resilience in the transition to a low-carbon future, the California incident illustrates the risks associated with aging natural gas infrastructure and underscores the need for rigorous oversight using effective technology. Natural gas is composed primarily of methane (approximately 80 percent) a potent greenhouse gas. While natural gas burns cleaner than other fossil fuels, fugitive emissions during the production, storage, and delivery have the potential to undo much of the greenhouse gas benefits. Given the scale of the California site leak, regulatory outcomes could not only impact natural gas practices, but also the electricity sector, as natural gas utilization is assumed to grow significantly over the next decade as utilities shift away from coal generation in response to the Clean Power Plan. Current methane reduction measures from oil and gas operations primarily target above-ground pipeline infrastructure on storage sites, rather than subsurface malfunctions. Given methane's substantial environmental impact, regulatory requirements for real-time methane detection and controls to address below-ground leaks will become increasingly crucial for sustainability. Originally published by  EnerKnol . EnerKnol  provides U.S. energy policy research and data services to support investment decisions across all sectors of the energy industry. Headquartered in New York City,  EnerKnol  is proud to be a NYC ACRE company. http://everythingshale.com/news/2016/february/1/california-leak-exposes-risks-of-increasing-reliance-on-natural-gas/ http://everythingshale.com/news/2016/february/1/california-leak-exposes-risks-of-increasing-reliance-on-natural-gas/ Mon, 01 February 2016 09:00:22 http://everythingshale.com/news/2016/february/1/pemex-reform-efforts-in-mexico-hobbled-by-oil-downturn-fuel-for-thought/ Falling crude oil production, falling refined product output and falling income have led many to believe that the sky is falling on Mexico’s state-owned oil company Pemex. The perilous situation for Mexico’s energy industry — and Pemex is Mexico’s energy industry — has not been lost on officials who are trying to reform the company and, by extension, the nation’s energy landscape. Mexican officials have long argued that a strong Pemex would be a major feature of its energy reform. The company, they said, would metamorphose into an efficient, market-oriented, financially autonomous state enterprise that is able to compete on equal terms with international majors in the private sector. Unfortunately, the deep dive in the price of oil has put Pemex on an even shakier footing, with the company now losing money on crude production, its core business, for the first time since it emerged as a major producer in the late 1970s. For years, the profitable upstream division of Pemex shouldered the losses of petrochemicals, refining and other businesses. No longer, says Arturo Carranza, senior analyst of the Mexico City-based Solana consultancy. “To my surprise, during the first three quarters of 2015, the upstream division was making a loss, just like the others,” Carranza said. Including all its divisions, Pemex had net losses of almost $10 billion in the first three quarters of last year. But turning around a state-run enterprise with 77 years of inertia behind it, can’t happen overnight and while steps are slowly being taken to turn things around, more pain is likely. The first barrels of oil from private-sector newcomers following Round One of the reform effort are not expected until at least 2018. This makes arresting steadily falling crude production difficult as low oil prices have deprived Pemex of investment capital of its own. Mexico’s crude oil production fell to 2.275 million b/d in December, down nearly 12% from 2010, according to Pemex data. Pemex is not only starved for E&P money, all segments of the company are looking for investment dollars. This is why Pemex recently opened up most aspects of the company, from storage and distribution terminals to pipelines, refineries, and petrochemical plants to outside investors. Pemex paying price for years of regret Unfortunately for Pemex, the need for investors comes when asset prices are low due to low commodity prices and the company’s hardware likely needs plenty of upgrades to bring them up to speed. Since Pemex favored the crude production side of its business over others, the downstream refining business is in sore need of repair. This is one reason the company’s refined product output has decreased over the years. At the end of December, Pemex produced 1.283 million b/d of oil products, down from just over 1.415 million b/d in 2010. The result of this was Pemex needing to import more products, which, in combination with weak oil prices, made Mexico’s trade gap balloon to nearly $10 billion in 2015. In addition to bringing in private sector money, Mexico is also trying to transform its energy pricing to more market-based prices. Pemex first tried to do this in the 1990s with natural gas by tying it to the US benchmark Henry Hub. This was thought to not only give Mexico a market-based price but allow for hedging as well. However, one of the complications with that change was that the price did not accurately represent Mexico’s domestic natural gas fundamentals. This is now changing with the Los Ramones pipeline that will allow Mexico to import natural gas from US shale plays. Not only will the pipeline bring gas to a Mexican market hungry for it, but now the US price will have an element of the Mexican market. “But it should have been started about 10 years ago, when the demand signals began to emerge,” said Houston-based energy consultant George Baker. “When demand began to exceed supply for gas within Mexico, there was almost no way to meet it. Hence, industry was disrupted in much of Mexico for some years. Only now, as Los Ramones progresses, gas supplies are meeting current demand, though demand is likely to grow.” Mexico is set to further expand the reform of domestic market-based prices by using spot prices across its energy sector from upstream oil and gas to downstream derivative products. Pemex has a long road to reform ahead and while the sky may not be falling the clouds got a little darker at the end of last week when S&P downgraded its credit profile due to “expected lower hydrocarbon prices.” –Ronald Buchanan, newsdesk@platts.com http://everythingshale.com/news/2016/february/1/pemex-reform-efforts-in-mexico-hobbled-by-oil-downturn-fuel-for-thought/ http://everythingshale.com/news/2016/february/1/pemex-reform-efforts-in-mexico-hobbled-by-oil-downturn-fuel-for-thought/ Mon, 01 February 2016 07:41:14 http://everythingshale.com/news/2016/january/29/energy-efficient-home-design/ Before you design a new home or remodel an existing one, consider investing in energy efficiency. You’ll save energy and money, and your home will be more comfortable and durable. The planning process is also a good time to look into a renewable energy system that can provide electricity, water heating, or space heating and cooling. You may also want to explore your options for financing an energy-efficient home . In an existing house, the first step is to conduct a home energy assessment (sometimes referred to as an energy audit) to find out how your home uses energy and determine the best ways to cut energy use and costs. To learn more about home energy audits and find free tools and calculators, go to Tips: Your Home’s Energy Use , the Residential Services Network , and the Building Performance Institute . WHOLE-HOUSE SYSTEMS APPROACH If you plan to design and build a new home or do an extensive remodel on an existing house, optimizing home energy efficiency requires a whole-house systems approach to ensure that you and your team of building professionals consider all the variables, details, and interactions that affect energy use in your home. In addition to occupant behavior, site conditions, and climate, these include: Appliances and home electronics Insulation and air sealing Lighting and daylighting Space heating and cooling Water heating Windows, doors, and skylights . Before making upgrades, you may also want to work with an energy auditor to use the Home Energy Score , which provides a rating of your home’s current efficiency, as well as a list of improvements and potential savings. ULTRA-EFFICIENT HOMES Ultra-efficient homes combine state-of-the-art energy-efficient construction, appliances, and lighting with commercially available renewable energy systems, such as solar water heating and solar electricity. By taking advantage of local climate and site conditions, designers can often also incorporate passive solar heating and cooling and energy-efficient landscaping strategies. The intent is to reduce home energy use as cost-effectively as possible, and then meet the reduced load with on-site renewable energy systems. ADVANCED HOUSE FRAMING If you're building a new house or adding on to an existing one, consider using advanced house framing (also known as optimum value engineering), which reduces lumber use and waste and improves energy efficiency in a wood-framed house. COOL ROOFS Cool roofs use highly reflective materials to reflect more light and absorb less heat from sunlight, which keeps homes cooler during hot weather. PASSIVE SOLAR HOME DESIGN Passive solar home design takes advantage of climatic and site conditions to provide heating in the winter and cooling in the summer. EARTH-SHELTERED, STRAW BALE, LOG, AND MANUFACTURED HOMES If you live in or are planning to buy an earth-sheltered, straw bale, log, or manufactured home, below is more information and links with suggestions to help improve your home's energy efficiency: EFFICIENT EARTH-SHELTERED HOMES Earth-sheltered homes can be built underground or bermed, and—when well designed and built—can be comfortable, durable, and energy-efficient. STRAW BALE HOME DESIGN Straw bale buildings were fairly common in the United States between 1895 and 1940, but it wasn’t until the mid- to late-1990s that building codes began to acknowledge them as a viable approach. Two current straw bale construction methods include non-load-bearing or post-and-beam, which uses a structural framework with straw bale in-fill, and load-bearing or “Nebraska style,” which uses the bearing capacity of the stacked bales to support roof loads. Proposed straw bale structures face considerable barriers, including: Local building code approvals Building loans Mortgages Homeowner’s insurance Community acceptance. To learn about the building code standards for your state, contact your city or county building code officials. Your state energy office may be able to provide information on energy codes recommended or enforced in your state. ENERGY EFFICIENCY IN LOG HOMES Log homes use solid wood logs for wall structure and insulation, and require care in design, construction, and maintenance to achieve and maintain energy efficiency. EFFICIENT MANUFACTURED HOMES Manufactured homes (formerly known as mobile homes) are built to the U.S. Department of Housing and Urban Development (HUD) Code, and are constructed on a permanent chassis so they can be moved. Owners can improve the energy efficiency of these homes by caulking and weather stripping, air sealing, and choosing energy-efficient lighting and appliances. http://everythingshale.com/news/2016/january/29/energy-efficient-home-design/ http://everythingshale.com/news/2016/january/29/energy-efficient-home-design/ Fri, 29 January 2016 16:00:42 http://everythingshale.com/news/2016/january/29/miami-meeting-looks-to-asia-to-help-buoy-demand-for-met-coal/ Metallurgical coal market traders and miners who met in Miami this week see Asia’s promise perking optimism after a run of price declines and bankruptcies. Japanese and South Korean buyers of US met coals are said to be keeping up stable volumes, especially of high-vol, high-fluidity types. Colombian high-vol traders are sniffing out further Japanese business and trying to expand sales in Europe outside Turkey. Japanese trading groups and Asian steel mill executives were in abundance at Coaltrans, to keep tabs on changing dynamics in the US and negotiate new contracts. As Daniel Kimura of trading group Mitsui & Co. explained, the need to blend with lower quality coals has pushed up use of high-fluidity coals, and depletion of the Gregory mine in Australia is keeping interest up for US coals. Blackhawk and Arch Coal have signed new deals in Japan and South Korea. For Europe, US met coal demand in on the wane, as some coke technicians have reduced usage of high-fluidity coals by experimenting more and not prioritizing CSR as much during weak steel utilization. Tata Steel, a stalwart US coking coal buyer, is reducing volumes fast, with US PCI use in Europe under threat on Russian and Australian competitiveness. Asian interest is good for now, with historic lows in freight rates, helping make the case for US high-vols being shipped halfway around the world. As for shifts in the US industry footprint to accommodate lower demand, a miner said to expect big changes in the year ahead. http://everythingshale.com/news/2016/january/29/miami-meeting-looks-to-asia-to-help-buoy-demand-for-met-coal/ http://everythingshale.com/news/2016/january/29/miami-meeting-looks-to-asia-to-help-buoy-demand-for-met-coal/ Fri, 29 January 2016 14:39:23 http://everythingshale.com/news/2016/january/29/with-ban-lifted-us-oil-exports-off-to-slow-start/ The United States might have lifted its decades-old ban on exporting crude. But don’t expect oil companies here to immediately rush to begin shipping overseas. Enterprise Products Partners CEO Jim Teague opined in a conference call with analysts Thursday that with historic lows in oil prices the incentive to export simply was not there – at least not for now. “Today’s price environment, spreads do not generally support significant crude oil exports. However, we believe that as we move out of this cycle, world will recognize the abundance of our resources, the benefits of supply diversification, and they know they count on the U.S. producers,” he said. In the run up to last month’s decision by Congress to lift the oil ban, the industry and its supporters painted such a move as an aid to a struggling industry. Part of the reasoning was Brent crude, the European benchmark, typically sells at a premium to the U.S. benchmark West Texas Intermediate. But then there is the cost of shipping the oil overseas, via oil tankers that must cross oceans, braving storms and even the occasional pirate . Also, it can be difficult to find foreign refineries to take U.S. oil, a lighter and “sweeter” grade of crude. Even before the export ban lifted, companies were given some license to ship abroad, through an oil exchange program with Mexico and a waiver on condensate, an ultra-light form of oil. And since the export ban has lifted, that flow of oil out of the country has actually shrunk. According to the U.S. Energy Information Administration, the U.S. exported 399,000 barrels of oil in the week ending Jan. 22., a 25 percent reduction from the same period a year ago. Overall, U.S. production is sliding under crude prices that were around $33 a barrel Friday, a more than 60 percent discount from the summer of 2014. Not that there is no appetite for U.S. crude abroad. Earlier this month the Swiss oil trading firm Vitol, partnering with Enterprise, set off from a Houston terminal with 600,000 barrels of American oil bound for Europe. http://everythingshale.com/news/2016/january/29/with-ban-lifted-us-oil-exports-off-to-slow-start/ http://everythingshale.com/news/2016/january/29/with-ban-lifted-us-oil-exports-off-to-slow-start/ Fri, 29 January 2016 14:25:27 http://everythingshale.com/news/2016/january/29/criticism-of-ethanol-policy-grows/ If the Renewable Fuel Standard (RFS) were a candidate in this election year, its track record would invite landslide defeat. Editorial boards of major newspapers are now echoing what a diverse coalition of restaurant associations , grocers , producers of poultry, pork and beef , environmental non-profits and anti-hunger groups have been saying for years. Arguing that there is no doubt it should be repealed,†the Washington Post editorial board explains: Blending more and more ethanol into gasoline will require spending money on infrastructure that is not yet in place and selling more fuel that older and more specialized engines cannot take. It will also raise food prices, according to a 2014 Congressional Budget Office analysis…The country's recent uptick in oil production eliminates the already weak argument for ethanol's energy security benefits.†USA Today calls the mandate a folly†that forces consumers to buy billions of gallons of ethanol, a costly and inferior fuel produced mostly from corn.†The editors conclude: A heavy-handed Washington mandate makes no sense. It is bad for consumers, bad for the environment, and bad for Americans' confidence in their political system.†Recent polling shows 72 percent of American voters are concerned about government requirements for higher ethanol blends. Yet the Environmental Protection Agency (EPA) continues to force the addition of more ethanol into the nation's fuel supply each year, regardless of consumer demand or vehicle compatibility. Since its passage in 2007, the RFS has had almost a decade to make good on its promises to reduce emissions and imports. Instead, it has significantly increased greenhouse gas emissions when compared to emissions from gasoline,†according to the Environmental Working Group. And the imports argument? USA Today says even that veneer has disappeared†because imports and fuel costs are down thanks in part to increased domestic production.†Increases in emissions and food costs, potential engine damage for the 90 percent of vehicles not manufacturer-approved to use ethanol blends higher than 10 percent, the risk of economic damage the RFS is more than obsolete; it is damaging. It's more than flawed. It's failed. Repeal or significant RFS reform should be a top congressional priority in 2016. By Jack Gerard  Originally posted January 27 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/january/29/criticism-of-ethanol-policy-grows/ http://everythingshale.com/news/2016/january/29/criticism-of-ethanol-policy-grows/ Fri, 29 January 2016 13:00:53 http://everythingshale.com/news/2016/january/29/oil-rigs-fall-under-500-in-latest-count/ HOUSTON — Oil drillers sidelined another 12 rigs this week, bringing the number of rigs chasing crude under 500 for the first time since 2010. Baker Hughes reported Friday that the combined oil and gas rig count fell by 18 to 619 active rigs. Rigs chasing oil fell by 12 to 498, the first time fewer than 500 have been active since March of 2010. Natural gas rigs fell by six to 121, the lowest count in Baker Hughes records stretching back to 1987. The number of active oil rigs have now fallen by 69 percent from the October 10, 2014 peak. Over the past 12 months, the oil rig count is down 59 percent. U.S. crude oil traded up slightly early Friday to $33.31 per barrel. http://everythingshale.com/news/2016/january/29/oil-rigs-fall-under-500-in-latest-count/ http://everythingshale.com/news/2016/january/29/oil-rigs-fall-under-500-in-latest-count/ Fri, 29 January 2016 12:24:52 http://everythingshale.com/news/2016/january/29/as-ghgs-plummet-thanks-to-natural-gas-ban-fracking-groups-and-elected-officials-peddle-misinformation-about-methane/ In the wake of the Department of the Interior announcing proposed methane regulations on oil and gas production on federal lands, there has been a barrage of activity this week from anti-fracking groups and some elected officials who are taking the opportunity to push out misinformation on methane emissions. Their full court press is ironic considering that fuel they are trying to stop – natural gas – has done more to reduce greenhouse gas emissions than any other government scheme or agreement.  Even the Intergovernmental Panel on Climate Change (IPCC) has said that fracking is “an important reason for a reduction of GHG emissions in the United States.” The IPCC isn’t alone:  according to the Energy Information Administration (EIA), natural gas has prevented more than one billion metric tons of carbon dioxide   from being emitted from power plants in the United States, bringing U.S. greenhouse gas emissions to a  27-year low . That’s why the Paris-based International Energy Agency (IEA) recently hailed natural gas as a “valuable component of a gradually decarbonizing electricity and energy system.” Yet anti-fracking activists continue to deny the science and push talking points that have long been debunked. Perhaps chief among these groups is Physicians, Scientists and Engineers for Healthy Energy (PSEHE), an organization funded by the anti-fracking Park Foundation.  The group put out a report this week, which rehashes the thoroughly debunked claim that “methane emissions from gas production may greatly reduce the real climate benefits” of natural gas. But that’s not surprising considering that the group’s President, Anthony Ingraffea, has become infamous for pushing this tired talking point, and his scholarship has been overwhelmingly criticized by his scientific peers for years . Another group that joined the fray this week is the Clean Air Task Force, which released a report advocating for an expansion of Environmental Protection Agency’s (EPA) methane regulations on oil and gas producers to “close the gap” on emissions.  In reality, it’s the Clean Air Task Force that should be “closing the gap” in its research, because it is premised on the incorrect notion that methane emissions from natural gas development will rise dramatically by 2025. In reality, methane emissions have been dramatically declining as natural gas production has skyrocketed . Finally, a group of U.S. Senators sent a letter to EPA this week also asking the agency to expand its regulations and “propose (111d) standards for existing sources” even though greenhouse gas emissions from exploration and production account for only 1.07 percent of total U.S. greenhouse gas emissions. The facts on methane emissions Scientists have long noted that natural gas has significant climate benefits as long as methane emissions are kept under 3.2 percent . Based on the most recent peer-reviewed and some of the best data we have available, it’s clear methane “leaks” from natural gas development are well below that threshold: Activists and even the EPA have tried to argue that methane emissions from oil and natural gas production will increase by 25 percent by 2025, but the data simply don’t support that. In fact, EPA’s own data from its Greenhouse Gas Inventory show that methane emissions from both oil and natural gas production fell 11 percent – more than 22 million metric tons – between 2005 and 2012, during a time when production soared and 86,000 new wells came online. EPA’s data also show that methane emissions from natural gas production alone fell 38 percent since 2005. Over the same period, U.S. natural gas  production increased by 26 percent . Why target an industry whose emissions are low and continuing to fall – and the reason the U.S. has achieved dramatic reductions in emissions? It’s interesting that these groups continue to focus so heavily on the oil and gas industry, when oil and gas exploration and production only accounts for a little more than one percent of U.S. greenhouse gas emissions, as the below chart shows: Even if you’re considering the entire oil and natural gas system (which includes activities outside of exploration and production), livestock overtook natural gas systems last year as the largest source of methane emissions in the United States.  That data can be seen in the following chart from EPA’s greenhouse gas inventory: combining the numbers for enteric fermentation (cows) and manure management, agriculture emits 7 percent more methane than the entire oil and natural gas system. All of this leads to some important questions: Why are these groups targeting an industry whose emissions make up a small part of the puzzle – and are low and continue to fall?  Why aren’t they calling for lower emissions in industries that are emitting much more methane? Why are they trying to stop the one fuel that is responsible for bringing U.S. greenhouse gas emissions to a 27 year low? The bottom line is that if they truly cared about tackling climate change, they would be stanch supporters of natural gas.  Instead, they just push misinformation at every turn. http://everythingshale.com/news/2016/january/29/as-ghgs-plummet-thanks-to-natural-gas-ban-fracking-groups-and-elected-officials-peddle-misinformation-about-methane/ http://everythingshale.com/news/2016/january/29/as-ghgs-plummet-thanks-to-natural-gas-ban-fracking-groups-and-elected-officials-peddle-misinformation-about-methane/ Fri, 29 January 2016 12:02:58 http://everythingshale.com/news/2016/january/29/oil-has-second-weekly-gain/ Oil capped a second weekly gain amid speculation that OPEC and Russia will meet to discuss trimming crude production to bolster prices. Russian Energy Minister Alexander Novak said that while OPEC member Venezuela proposed a meeting next month, nothing is scheduled. Russia, after months of insisting it was happy to keep pumping at full throttle, suggested in recent comments it is open to compromise with the Organization of Petroleum Exporting Countries. Equities climbed as the Bank of Japan’s unexpected monetary stimulus boosted confidence that central banks remain vigilant for slowing economic growth. “People are holding out some hope that an agreement will be reached to curb production,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “There’s also a feeling that the central banks will be increasing stimulus to help the economy.” Oil has pared its decline this year to about 9 percent after plunging to a 12-year low. Global markets remain volatile because of concerns about brimming U.S. stockpiles and rising exports from Iran following the removal of sanctions against the country. OPEC’s January crude output climbed to the highest level in data compiled by Bloomberg going back 20 years as Indonesia’s membership was reactivated. West Texas Intermediate for March delivery rose 40 cents to settle at $33.62 a barrel on the New York Mercantile Exchange. Futures advanced 4.4 percent this week. Total volume traded was 44 percent above the 100-day average at 3:15 p.m. Brent for March settlement, which expires Friday, rose 85 cents, or 2.5 percent, to $34.74 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at a $1.12 premium to WTI. The more-active April contract increased $1.19 to $35.99. Futures retreated after The Wall Street Journal cited an unidentified “top Iranian official” as saying the nation wouldn’t join an OPEC-led production cut. Four OPEC representatives, who asked not to be identified, said they hadn’t heard of any plan for talks. One Gulf member said de facto leader Saudi Arabia had no proposal to trim production by as much as 5 percent, after Interfax cited Novak Thursday saying that the country had suggested such a cut at previous OPEC meetings. Saudi Arabia is keen to defend market share and Russia’s inability to cut production in winter months makes coordination difficult. Until this week, Russia had repeatedly stated its goal of keeping oil production stable even as prices tumbled. The two countries’ opposing views on Syria, where Russia is President Bashar Al-Assad’s closest ally and Saudi Arabia seeks his removal, present another diplomatic obstacle. Russia hasn’t begun internal discussions on how any production cuts would be implemented, Novak said in an interview with Bloomberg Television, adding that a reduction is only possible if all exporters agree to participate. http://everythingshale.com/news/2016/january/29/oil-has-second-weekly-gain/ http://everythingshale.com/news/2016/january/29/oil-has-second-weekly-gain/ Fri, 29 January 2016 11:46:40 http://everythingshale.com/news/2016/january/29/energy-news-roundup-sc-leads-clean-energy-push-norway-reverting-to-fossil-fuels-emerging-markets-go-green/ The historically conservative state of South Carolina is leading a shift toward support for alternative energy and away from fossil fuel energy development. [ The Washington Post ] Norway wants other countries to leave their coal and oil in the ground to meet new global climate change targets, but its industry is planning to increase production of its own fossil fuels. [ The Guardian ] Companies in the world’s fast-growing economies stand to benefit from efforts to reduce energy consumption following the Paris Agreement, providing they understand how policy makers shape these programs and where the opportunities lie. [ Forbes ] http://everythingshale.com/news/2016/january/29/energy-news-roundup-sc-leads-clean-energy-push-norway-reverting-to-fossil-fuels-emerging-markets-go-green/ http://everythingshale.com/news/2016/january/29/energy-news-roundup-sc-leads-clean-energy-push-norway-reverting-to-fossil-fuels-emerging-markets-go-green/ Fri, 29 January 2016 11:23:22 http://everythingshale.com/news/2016/january/29/saudi-venezuela-and-mexico-provide-over-half-of-all-us-waterborne-crude-imports/ The Bank of Japan wins the prize for surprise-bonkers move-of-the-day by introducing a negative interest rate of -0.1% for certain cash reserves. This news has shaken up markets like a snow globe, catapulting equity markets higher, sending the yen spiraling lower, while funds flood into global government bonds as a 0.1% yield on a JGB (Japanese government bond) looks all the more attractive (as does 1.95% on the 10-year Treasury apparently, and 0.35% on a 10-year German Bund). There is a voracious flight to the dollar, yet the crude complex is unperturbed; it has laced up its rally boots, and is adopting a solid risk-on stance. Japanese interest rate (source: investing.com) In terms of economic data-flow, Japan underscored its economic fragility as industrial production dropped for a third consecutive month down 1.4% MoM. Inflation remained at 0.2% YoY, while household spending disappointed, down 4.4% YoY. The baton of bearish broadcasts was passed on to Europe, with German retail sales dropping 0.2% MoM (vs. +0.5% expected). Preliminary Eurozone inflation came in better than consensus though, up 1.0% YoY (vs. +0.9% expected). Onto the US, and preliminary Q4 GDP came in just shy of expectations at 0.7%, while the Chicago PMI has given some reason for good cheer, rebounding to expansion at 55.6, a country mile away from the consensus of a contractionary 45. Uni of Michigan sentiment data saw current conditions come in better than expected, while the future (expectations) looked bleaker. Plehp.. As we all know, all paths lead back to energy, hence the Bank of Japan's announcement coincides with the news that power usage in Japan last year dropped to its lowest level since 1998. We discussed earlier in the week how Japanese crude imports had dropped to their lowest level since 1988, and how our ClipperData points to further downside to imports as fuel efficiency continues. While the drop in power usage is in part due to energy conservation, it is also due to a shrinking population and an lethargic economy. Meanwhile, Saudi Arabia's financial situation continues to deteriorate, with its net foreign assets falling $19 billion in December. Reserves are now down to $608 billion, down $115 billion in 2015. Finally, I went off down a rabbit hole this morning, prompted by this chart from the mighty @JKempEnergy , which based on EIA data: This sent me digging into our ClipperData , and from it I gleaned the following: Total US waterborne crude imports dropped by 7% in 2015 versus the prior year Saudi crude imports dropped by 10% over the same time-frame 56% of total US waterborne imports were from Venezuela, Mexico, and Saudi Arabia last year Saudi Arabia's share of waterborne imports edged slightly lower, from 25% to 24% of total waterborne volume in 2015 Nonetheless, Saudi Arabia remains the largest waterborne crude supplier to the US It is important to note that Canada is still the largest total crude exporter to the US, averaging 3.74 million barrels per day last year (through October), according to the EIA , a pace which is 10% higher than the year prior. This is nearly three and a half three times larger than Saudi's volumes.  http://everythingshale.com/news/2016/january/29/saudi-venezuela-and-mexico-provide-over-half-of-all-us-waterborne-crude-imports/ http://everythingshale.com/news/2016/january/29/saudi-venezuela-and-mexico-provide-over-half-of-all-us-waterborne-crude-imports/ Fri, 29 January 2016 09:47:01 http://everythingshale.com/news/2016/january/29/westlake-chemical-fails-in-initial-14-billion-takeover-bid-of-axiall/ Westlake Chemical Corp. said Friday that Axiall Corp. rejected a $1.4 billion acquisition offer. The Houston petrochemical company made the offer public as part of a hostile takeover effort to woo Axiall’s shareholders. Atlanta-based Axiall, which is a Westlake competitor, produces chemical products such as chlorine, vinyls and various building materials. Axiall had a Houston-area plant in Pasadena, but it was sold last year to the Ineos Group. In a letter Friday to Axiall board members, Westlake President and CEO Albert Chao said he is “surprised and disappointed” by the rejected offer. He urged the Axiall board to jumpstart negotiations that were already shot down by the company’s top management. “In this challenging environment, we believe your unwillingness to even discuss our compelling proposal exposes your shareholders to significant risk and uncertainty,” Chao added. Axiall did not immediately respond in a request for comment. Chao said Westlake already has acquired 4.4 percent of Axiall’s outstanding stock. Westlake said its offer is a 108 percent premium over Axiall’s closing stock value on Jan. 22. The total offer is for $2.9 billion, including assuming $1.5 billion of Axiall’s debt. The acquisition offer is for $20 per Axiall share — comprised of $11 in cash and 0.1967 of Westlake stock. Axiall’s stock closed at $9.60 a share on Jan. 22 and at $9.80 per share on Thursday. But the Axiall stock surged Friday morning by about 80 percent after Westlake made its takeover effort public. “As we made clear to your management, we would have preferred to engage in a private dialogue regarding our proposal and strongly believe that it is in all parties’ best interests to move forward with this transaction promptly,” Chao wrote in the letter. “Unfortunately, given your rejection of our offer we feel we have no choice but to bring this proposal to the attention of your shareholders,” he added. http://everythingshale.com/news/2016/january/29/westlake-chemical-fails-in-initial-14-billion-takeover-bid-of-axiall/ http://everythingshale.com/news/2016/january/29/westlake-chemical-fails-in-initial-14-billion-takeover-bid-of-axiall/ Fri, 29 January 2016 09:26:00 http://everythingshale.com/news/2016/january/29/fatal-flaws-in-epa-s-latest-voluntary-methane-program-highlight-need-for-concrete-rules/ The Natural Gas STAR Methane Challenge Program unveiled last week by the U.S. Environmental Protection Agency is a perfect example of what can go wrong when the agency tries too hard to entice an unwilling industry to engage. For years, EPA has offered voluntary pollution prevention†programs to encourage companies to achieve environmental goals faster or cheaper than they might under regulations alone. Done right, voluntary programs stimulate innovation and reward true leaders. But weak efforts accomplish nothing, handing out laurels for token efforts that amount to business as usual or less. Gaping Holes The problem with the EPA Methane Challenge program is that it falls short on thoroughness, rigor, and urgency. For starters, it lacks a critical yardstick to measure progress, requiring no quantitative goals whatsoever. Among other problems and deficiencies: The new program doesn't require or even mention the need to set emissions targets for participating companies, making it entirely possible that a company's overall methane emissions could increase yet still win official kudos from the agency. Companies are free to pick and choose what practices they implement, all but guaranteeing that EPA will end up rewarding cherry-picking by companies. Companies aren't required to implement practices to find or fix methane leaks as a condition of program participation, despite the fact that leaks, equipment malfunctions, and equipment failures are a widespread problem that accounts for a major share of industry emissions. Despite pressing need, the program gives companies five years to fully implement commitments, even though cost effective strategies and technologies for reducing emissions are widely documented, readily available, and in some cases, already successfully deployed in the field by leading companies. A Reason for Skepticism So far, industry's track record with voluntary programs is not impressive. Over the past 20 years, the EPA's current voluntary program for the oil and gas program — Natural Gas STAR  — has achieved a meager one percent participation rate in the oil and gas industry. When EDF recently surveyed 65 of the biggest companies in the oil and gas industry , we found that exactly none have publicly disclosed methane emission reduction targets, and less than a third report any methane emissions information at all. For those that did, the data was scattershot. The oil and gas industry is eager to point out that methane emissions have come down over time even as production has gone up, but they are less quick acknowledge areas (such as in the gathering and processing sector) where the data shows emissions have been increasing. Nor will they tell you that emissions associated with leaks, equipment malfunctions, and equipment failures are grossly underreported in official government emissions inventories. A Missed Opportunity According to a recent survey , less than a third of Americans trust oil and gas companies to operate responsibly and just 15 percent trust those companies to accurately report their emissions. That is why this new program offered by EPA is so disappointing. Voluntary programs designed to work in coordination with regulation can be and have been used to reward early action and steps beyond compliance. Unfortunately, this program does neither.  Here, all signs point to an effort intended to set a low bar in hopes of boosting previously meager participation by industry. Unfortunately, by setting the bar low, the new program won't do much for the environment or improve the public's confidence in the industry or government to address a significant pollution problem. The goal of the Challenge is worthy, and we sincerely hope it will make a contribution in that direction. But with the weak track record of industry participation in voluntary programs, and the shortcomings of this one, the need for regulatory standards is more clear than ever. By Mark Brownstein Originally Published on January 28, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/january/29/fatal-flaws-in-epa-s-latest-voluntary-methane-program-highlight-need-for-concrete-rules/ http://everythingshale.com/news/2016/january/29/fatal-flaws-in-epa-s-latest-voluntary-methane-program-highlight-need-for-concrete-rules/ Fri, 29 January 2016 09:00:12 http://everythingshale.com/news/2016/january/29/centerpoint-buys-continuum-energy-s-retail-business/ CenterPoint Energy said Friday it will buy the retail natural gas businesses of Continuum Energy for about $77 million. The deal will allow CenterPoint, also the power line and transmission company for most of the Houston region, to serve more residential and commercial customers outside of Texas. The acquisition is going through the company’s CenterPoint Energy Services subsidiary, which provides natural gas and energy services in several states. Although Continuum is Houston-based as well, the energy company’s retail businesses serve outside of Texas. CenterPoint is acquiring Continuum’s commercial and industrial transport customers in 25 states, as well as its 65,000 residential natural gas customers in California, Michigan, Nebraska, Ohio and Wyoming. CenterPoint said the deal is priced at $77.5 million plus working capital. Continuum used to be known as Seminole Energy Services, but the company changed its name in 2014.     “Continuum has built an impressive retail energy services business, which complements our overall natural gas business strategy,” said Joe McGoldrick, executive vice president and president of CenterPoint Energy’s gas division, in a prepared statement. He added that Continuum complements the existing CenterPoint Energy Services business. The deal includes the Continuum Retail Energy Services and Lakeshore Energy Services subsidiaries. In a statement, Continuum President and CEO Jason Few said the sale allows the company to focus on its pipeline and natural gas gathering and treatment businesses. http://everythingshale.com/news/2016/january/29/centerpoint-buys-continuum-energy-s-retail-business/ http://everythingshale.com/news/2016/january/29/centerpoint-buys-continuum-energy-s-retail-business/ Fri, 29 January 2016 08:36:09 http://everythingshale.com/news/2016/january/29/chevron-delays-big-projects-plows-the-permian-basin/ HOUSTON The CEO of Chevron Corp. said his company recently mothballed a $500 million ultra deep-water Gulf of Mexico development not because the oil reservoir was too small to develop but because it had better places to spend its money. Namely, the Permian Basin in West Texas. There are tough choices being made,†Chevron CEO John Watson told investors on Friday, after the San Ramon, California oil giant posted its first quarterly loss since 2002. The $588 million loss worse than analysts had expected was driven by a series of special charges in the fourth quarter, including Chevron's write off of its Buckskin and Moccasin discoveries in the Gulf. The oil bust is forcing the No. 2 U.S. oil company and its rivals to cut projects and allocate smaller budgets even as the volatile oil market makes it harder to determine how much they can grow their production. Watson said Chevron's 2016 production growth could be anywhere between zilch and 4 percent, because it's unclear whether the world's oil production will decline enough this year ease oversupplied markets and lift oil prices. Not alone: Phillips 66 profits plummet 43 percent Until that balance occurs, prices will continue to be constrained and the financial damage to the energy sector seen in 2015 will continue,†Watson said. Chevron is planning to shed 4,000 jobs this year, on top of the 3,200 jobs it cut last year. The uncertainty has forced Chevron to delay sanctioning projects, including a venture at the Tenghiz oil field in Kazakhstan.  The Buckskin and Moccasin was a project that we thought would go forward. First, we thought it might have the potential to be a hub, and then we thought it had the potential to be a tieback,†Watson said. And I wouldn't say that the project couldn't have gone forward … But relative to our alternatives, we felt that for the foreseeable future, we've got better places to put our money.†Chevron's earnings were dragged down by its costly U.S. oil-production business and a punishing oil bust that prompted it to write down the value of $1.1 billion in assets in the fourth quarter. But Watson said the company cut $9 billion in operating costs and capital spending last year and plans to make similarly large cuts this year. Chevron boosted its domestic oil production by 7 percent in the fourth quarter as it ramped up its output at the deep-water Jack/St. Malo oil hub in the Gulf and in Texas' Permian Basin, where Watson says Chevron has cut its cost significantly over the past year to become competitive with its leanest rivals. Chevron is currently operating just six rigs companywide. Services hit hard: Oil field giant loses $1 billion in the fourth quarter Watson said Chevron spent 2015 converting to horizontal drilling in the Permian and has started to build in a more efficient factory†model of drilling used by shale oil companies to get rapid, repeatable drilling results within a certain region. The Permian has proven to be the most cost efficient within the United States. The economics in some of the best areas at strip type prices work,†Watson said. I would hate to lose the momentum that we have in the Permian with some of the cost reduction efforts we have under way. We've got 3,000 locations that we think meet economic thresholds at $50. Obviously prices aren't $50 today, but it's indicative of the strength of the portfolio we have.†Watson said the firm expects to begin producing liquefied natural gas at its massively expensive Gorgon project in Australia within a few weeks. Despite the production gains, its upstream unit lost $1.36 billion in the fourth quarter. Its overall quarterly loss of $588 million, or 31 cents a share, in the fourth quarter, was down from a $3.47 billion profit, or $1.86 a share, in the same October-December period the year before. Revenues fell from $46.1 billion to $29.2 billion. Chevron's international upstream earnings fell 73 percent to $593 million while income from its oil refining and downstream business dropped 33 percent to $1 billion. Overall, its cash flow from operations in 2015 came in at $19.5 billion, down from $31.5 billion the year before.  http://everythingshale.com/news/2016/january/29/chevron-delays-big-projects-plows-the-permian-basin/ http://everythingshale.com/news/2016/january/29/chevron-delays-big-projects-plows-the-permian-basin/ Fri, 29 January 2016 08:25:04 http://everythingshale.com/news/2016/january/29/phillips-66-profits-plummet-43-percent-still-meet-expectations/ Houston-based Phillips 66 on Friday posted fourth-quarter profits down 43 percent from a year ago as the company’s refining margins tightened courtesy of cheap gasoline prices. Phillips 66 reported $650 million in net income in the fourth quarter of 2015 or $1.20 per share, well down from $1.15 billion, or $2.05 a share, in the final three months of 2014. The company’s profits still show that refining and chemicals companies like Phillips 66 are performing much better during the oil crash than the production and services companies, many of which are reporting large losses. For all of 2015, Phillips 66 announced $4.23 billion in net income, just 11 percent less than the $4.72 billion in 2014. Phillips 66 was buoyed by earning $1.58 billion in the third quarter of 2015. Despite refining margins tightening in the fourth quarter as the gap between oil and fuel prices declined somewhat, Phillips still reported that $410 million of its $650 million in net income came from its refining business. Refineries use crude oil as the feedstock to make gasoline and other petroleum products. The wider the difference between oil and fuel prices, called the crack spread, the more refineries profit. In a conference call, Phillips 66 Chairman and CEO Greg Garland called the last three months a “solid quarter … despite the difficult environment experienced throughout the energy sector.” Refining performed relatively well in the quarter, Garland said, although “market cracks were down significantly” from the summer and fall as gasoline prices dropped sharply. In a note from Raymond James analysts Justin Jenkins and Tom Murphy, they contended that refining profits offset other weaknesses within Phillips 66, allowing the earnings to slightly beat expectations. “Relative to our model, the beat was driven by stronger than expected refining results, which offset lower than expected results in the other segments,” the wrote, noting some weakness in midstream and chemicals businesses. Apart from refining, Phillips 66 suffered its biggest swing with a $77 million loss for the quarter in its pipeline and transportation business, down from a $96 million profit in late 2014. The biggest reason was a big loss of $159 million in its struggling DCP Midstream joint venture, which Phillips 66 attributed partly to lower natural gas margins. However, Garland praised the DCP leadership for bringing costs down and restructuring contracts. DCP’s capital spending will dip about 50 percent in 2016 from last year, including about $233 million from Phillips 66 supporting DCP in 2016. “I think DCP is going to be fine for this environment we’re in in 2016,” Garland said. Garland praised the December startup of the company’s 100,000 barrels-per-day fractionator near Houston that was delayed two months because of a mechanical problem. The Sweeny Fractionator One is southwest of Houston at Phillips 66’s complex in Old Ocean. A fractionator takes natural gas liquids and separates them out into individual component products like ethane, butane and propane. The products are sold to the petrochemical sector and heating markets. The project is supported by 250 miles of new pipelines and a multimillion-barrel storage cavern complex. Phillips 66 will have the ability to export the liquefied petroleum gases produced at the fractionator once Phillips 66’s Freeport LPG Export Terminal is completed south of Houston in the second half of 2016. “It’s on track, on budget with an expected startup in the fourth quarter,” Garland said. Phillips 66 also is building the Bayou Bridge pipeline to move crude oil from Texas to Louisiana markets. Oil is projected to start flowing on the pipeline from Nederland, Texas to Lake Charles, Louisiana by the end of March, the company said. http://everythingshale.com/news/2016/january/29/phillips-66-profits-plummet-43-percent-still-meet-expectations/ http://everythingshale.com/news/2016/january/29/phillips-66-profits-plummet-43-percent-still-meet-expectations/ Fri, 29 January 2016 07:14:30 http://everythingshale.com/news/2016/january/29/where-s-the-silver-lining-metals-market-airs-concerns-over-global-benchmark-process/ Regulation. Regulation. Regulation. Once again it is being blamed for the London Bullion Market Association Silver Price — operated and administrated by CME Group and Thomson/Reuters — settling around 6% below the spot price January 28. A matter of some contention across the market. The jury is well and truly out on whether or not it is the fault of the system, or just another headache embedded by over-regulation. The LBMA Silver Price settled January 28 at $13.58/oz. When the daily auction process kicked off the spot price was $14.42/oz. Questions were raised about the process across the metals market January 6, after it took 60 attempts to settle. One trader said January 28 that he would point the finger of blame at over-regulation of the market. “I would not say it’s anything technical — the auction was functioning as programmed,” he said. “I’d say it’s definitely to do with regulations and supervision.” He said that an arbitrage as wide as the spot and settlement, with nobody picking up the slack, “suggests all dealers/market makers, or whoever, were not allowed to input non-client-related orders.” A bullion banker agreed. “People are too scared to change their orders in the middle of the process so it got stuck,” the banker said. “In the old days, banks would step in and take positions in order to balance the process. No-one dares do that anymore, as then they have to answer to compliance etc.” In July 2014, following a market consultation, CME/Thomson Reuters was chosen to provide a technology, administration and governance package for the calculation of the London silver price. Participants include HSBC, JPMorgan Chase Bank, The Bank of Nova Scotia, Toronto Dominion Bank and UBS. “The system is broken,” said one precious metals dealer. “In the old days, if it was out of line, someone would have bought the fix [now known as the LBMA Silver Price] and then sold the futures. It’s a joke — that’s all I know.” One trader jumped to CME’s defense: “The CME is not at fault here. They don’t charge anything for people to trade on it. Market participants merely have to sign up to be a fixing/agreement member. People can amend orders as the fix is progressing. They don’t tell people not to buy. Blame the regulators.” The official line from the CME was: “The LBMA Silver Price is established through a transparent electronic auction mechanism designed to adjust the price until there is equilibrium between buy and sell orders. Given the orders placed in the auction today by five participants, the buy and sell orders became balanced after 29 rounds and the LBMA Silver price was established at a price of $13.58.” However, an email was circulated, allegedly from the CME to clients, and passed to Platts, saying: “The platform worked as it should, in fact perfectly. It’s as good as the orders the participants enter. If you are a client of a ‘participant’ I guess you should direct this question at them. If you want individual flexibility, become a participant.” A banking source questioned that argument as “nonsensical.” “If you want individual flexibility, become a participant. As their own rules state: A participant has to be a Full Member (Ordinary or Market Making) of the LBMA. The participant also needs to have a Loco London Clearing account. Applicants to be a Full LBMA Member must demonstrate that they actively trade spot, options or forwards in the London Bullion Market, pass KYC procedures and declare conformance with the Non-Investment Products Code. How many producers or consumers meet those criteria?” The blame game, and guessing, continued January 29. Whatever the case, let’s hope this issue doesn’t continue, as the end-users of the global benchmark could be the ones that feel the real impact at a time when producers are struggling along at best. http://everythingshale.com/news/2016/january/29/where-s-the-silver-lining-metals-market-airs-concerns-over-global-benchmark-process/ http://everythingshale.com/news/2016/january/29/where-s-the-silver-lining-metals-market-airs-concerns-over-global-benchmark-process/ Fri, 29 January 2016 06:05:49 http://everythingshale.com/news/2016/january/28/petrobras-cuts-managers-to-save-440-million-a-year/ Brazil’s state-controlled oil company is reducing management positions and streamlining operations to save 1.8 billion reais ($440 million) a year as it navigates the worst oil market in a generation and a sprawling corruption investigation. Petroleo Brasileiro is reducing management positions in non-operational areas by about 30 percent and combining the refining and natural gas divisions to reduce its business units to six, it said in a statement Thursday. The company has nearly 7,500 management jobs, with 5,300 in non-operational areas. The changes will be presented to shareholders for approval, and the first phase of dismissals should be completed in about a month, Chief Executive Officer Aldemir Bendine told reporters in Rio de Janeiro. “It’s a scenario of total stress,” Bendine said at a press conference. “The company has to adapt.” The combination of collapsing crude prices, the largest debt load in the industry and a pay-to-play scandal that has seen some of Petrobras’s former executives go to jail and suppliers go bankrupt, has made the Rio de Janeiro-based producer the worst performing major oil stock in the past year, with a 49 percent plunge. The board was granted the power to name and fire executives and will participate more in decisions, Bendine said. Internally, more decisions, such as signing billion-dollar contracts with suppliers, will be made collectively, inside committees. Carwash prosecutors have blamed part of the scandal on the super powers heads of division had to sign alone billionaire contracts. Petrobras is preparing for oil prices as low as $20 a barrel and its main deep-water projects are still very competitive despite the price plunge, Bendine said. Projects in the so-called pre-salt region that holds Brazil’s largest crude discoveries will remain a priority under the new business model, he said. “We’ve worked with lower Brent prices in the past,” Bendine said. “It’s not the end of the world.” The company is also pursuing asset sales at “full speed” to raise cash for investments, he said. The company may delay a second train for its RNEST refinery in northern Brazil, and is seeking a partner for the Comperj refinery in Rio de Janeiro, he said. When asked it the company could sell majority stakes in some of its businesses units, Bendine said the company will keep an “open mind” on how to divest assets. http://everythingshale.com/news/2016/january/28/petrobras-cuts-managers-to-save-440-million-a-year/ http://everythingshale.com/news/2016/january/28/petrobras-cuts-managers-to-save-440-million-a-year/ Thu, 28 January 2016 17:23:32 http://everythingshale.com/news/2016/january/28/national-and-international-groups-calling-the-shots-in-local-keep-it-in-the-ground-movement/ For years, Energy In Depth has exposed how out-of-state anti-fracking groups have parachuted into our communities to push misinformation while pretending to be “local” groups. Lately this phenomenon has been taken to a whole new level by the “Keep it in the Ground” movement. These activists would have you believe that they are a “local” grassroots campaign fighting to stop fossil fuel development, but in reality, their group is spearheaded by a number of deep-pocketed national anti-fracking groups and the Guardian’s “Keep it in the Ground” movement, which was launched in the United Kingdom. Over the past few months, after declaring that stopping development on federal lands is the next “ key fight ,” “Keep it in the Ground” has staged a number of local stunts in Ohio and Colorado to protest the U.S. Bureau of Land Management’s (BLM) mineral leasing program. However, and in spite of these campaign efforts, the U.S. Department of Interior’s Bureau of Land Management decided last week that they intend to move forward with oil and gas development on federal lands, stating , “We go out of our way to make all of these oil and gas lease sales open to the public.”  BLM Director Neil Kornze also added , “The BLM is proud of the role we play in supporting responsible energy development on public lands.”  This makes sense considering that the data show that oil and gas development on BLM-managed lands support 291,000 domestic jobs and over $77 billion in economic output. Latest iteration of failed international divestment campaign Despite the fact that “Keep it in the Ground” protestors pretend to be “local” concerned citizens, the movement is anything but. In fact, the “Keep It in the Ground” movement is part of the larger failed campaign for global divestment.  The name itself originated with Alan Rusbridger , the former editor-in-chief of the UK Guardian , who teamed up with “divestment” groups in the United States (like 350.org) to launch the effort. Here’s what Nabeelah Shabbir, a journalist at the Guardian, said about the beginning of “Keep it in the Ground”: “Around Christmas 2014, the outgoing Editor in Chief of the Guardian, Alan Rusbridger, was mulling over what regrets he had in 20 years of running the newspaper. Very few – except for coverage of climate change. I don’t think the decision to spend his last few months as editor doing campaigning journalism was an easy decision, but I think it’s the conclusion Rusbridger came to: the climate change threat is central to everything. And so we went about crafting our journalism, in investigations, campaigning, multimedia, across all desks at the Guardian, in a very focused way. We teamed up with 350.org to launch a petition asking the world’s two largest philanthropic organisations, Wellcome Trust and the Gates Foundation, to take their investments out of fossil fuels. The Guardian News and Media group itself took the decision to divest its own funds– actors such as James Franco, Maxine Peake and Jeremy Irons later did readings for us. We investigated ‘carbon bombs’ around the world in interactive format. We even released merchandise around #keepitintheground and we keep in touch with all interested readers. We ran an entire podcast dedicated to climate change, divestment, and the Guardian’s role in it. It’s called the Biggest Story in the World” The Guardian also noted, “James Randerson prefers a more practical solution that readers can get their teeth stuck into – could we take inspiration from the global divestment movement founded by Bill McKibben at 350.org? The powerful thing about divestment is that it provides a moral framework that people can get behind.” The Guardian, and its partner 350.org, announced in April 2015 that the Guardian Media Group would divest £800 million in fossil fuel assets. They also tried to get momentum behind forcing the Gates Foundation and the Wellcome Trust to divest their assets, but these organizations refused. In fact, divestment campaign has failed miserably as academic institutions and foundations, have consistently called the idea “misguided” and a “false solution.”  As a result of this failed effort. The Guardian and 350.org have shifted their focus to what they have said is the next “ key fight ” – to keep us from developing on federal lands. A “Local” Fight? “Keep it in the Ground’s” national groups are on the ground carrying  out its mission.  For example,  350.org , the Center for Biological Diversity , Greenpeace, Food & Water Watch and the Rainforest Action Network and a number of other groups have deployed teams of activists to show up in Ohio and Colorado to oppose oil and gas development on public lands. After staging a recent rowdy protest in at the White House, the Center for Biological Diversity’s mascot, Frostpaw the Polar Bear, and teams of national ban-fracking activists, hopped on a plane (powered by fossil fuels) and flew to Colorado , where they proceeded to block the entrance to a federal government office’s parking lot, despite repeated requests from local law enforcement that they vacate the premises.  “Frostpaw the Polar Bear” flies in to make in appearance in Colorado. Police respond to Colorado federal office as Keep It in the Ground block entrance to the BLM. From Colorado, the activists hit the road again (using fossil fuels) and crisscrossed the United States to appear in Ohio, where they organized an effort that included disrespecting U.S. federal employees . To appear “local” in Ohio, the activists partnered with Buckeye Forest Council (an Ohio-based ban fracking group) to distribute shirts that are worn at the protest, as well as “Keep It in the Ground” flyers, which were made into paper airplanes and thrown at BLM employees. The protest was so out of hand, that authorities were forced to shut down the meeting. Take a look at how all this went down. Keep It in the Ground” tries to appear “local” with Ohio based Buckeye Forest Council. Protesters , wearing “Keep It in the Ground” shirts shouted at federal government employees, and proceeded to throw paper airplanes at BLM officials. Paper planes that were thrown at BLM staff, including “Keep It in the Ground”. Recently , the “Keep It in the Ground” campaign wrote a letter that calls for a “moratorium on new oil and gas leasing.”  This came just after the BLM extended its public comment period on its pending environmental assessment regarding leasing in the Wayne National Forest . In line with its campaign, the Guardian has also been putting out hit piece after hit piece on fracking, the latest being an article targeting Florida for its current efforts to streamline its regulatory process through one single agency (much like Ohio and other states with similar regulatory landscapes). Conclusion “Keep it in the Ground” may missed this but hydraulic fracturing on public lands was reviewed just last year.  Furthermore, less than six months ago the U.S. Secretary of the Interior Sally Jewell pointed out at a breakfast sponsored by the Christian Science Monitor, “We are a nation that continues to be dependent on fossil fuels… It oversimplifies a very complex situation to suggest that one could simply cut off leasing or drilling on public lands and solve the issue of climate change.  You can’t just cut it off over night and expect to have an economy that is in fact the leader of the world.” See added , “Most of you burned fossil fuels one way or another to get here.” In addition, President Obama’s climate initiative, White House climate advisor (and former president of the Center for American Progress), John Podesta, also reported : “If you oppose all fossil fuels and you want to turn that switch off tomorrow, that is a completely impractical way of moving toward a clean-energy future . With all due respect to my friends in the environmental community, if they expect us to turn off the lights and go home, that’s sort of an impractical suggestion . (emphasis added) Podesta also noted that natural gas provides clear environmental benefits: “So I think we remain committed to developing the resource and using it,” Podesta said, “and we think there’s an advantage, particularly in the electricity generation sector, to move it forward.” Further, it’s precisely because of fracking, and the increased use of natural gas, that the United States has achieved dramatic reductions in greenhouse gas emissions. Even the Intergovernmental Panel on Climate Change, which activists have called the “gold standard” for climate science, has said, “the rapid deployment of hydraulic fracturing and horizontal drilling technologies…is an important reason for a reduction of GHG emissions in the United States.” In fact, thanks to natural gas, carbon emissions from electricity production have declined to a 20-year low in the United States. Natural gas has reduced nearly 60% more carbon dioxide emissions than renewables since 2005. Therefore, it’s no surprise that Environmental Protection Agency (EPA) administrator Gina McCarthy said , “Responsible development of natural gas is an important part of our work to curb climate change.” What’s more, the shale revolution has given the U.S. an incredible competitive edge, and benefits have trickled to our domestic manufacturers. This development has provided hope that Americans will once again predominantly see labels on their clothes and toys that say proudly, “Made in America.” As the report states over and over, in the 72 pages of study, the results are in and shale is a clear win-win for the United States and Ohio from an economic AND environmental perspective. If the “Keep It in the Ground” movement were truly focused on lowering global greenhouse gas emissions, they would actually advocate for fracking and natural gas development, not against. Authentic local concerned citizens understand this.  That’s why elected officials, statewide groups, and local stakeholders continue to speak out in opposition to this radical and misguided campaign, which will inevitably be yet another “false solution”. http://everythingshale.com/news/2016/january/28/national-and-international-groups-calling-the-shots-in-local-keep-it-in-the-ground-movement/ http://everythingshale.com/news/2016/january/28/national-and-international-groups-calling-the-shots-in-local-keep-it-in-the-ground-movement/ Thu, 28 January 2016 17:20:09 http://everythingshale.com/news/2016/january/28/2016-washington-auto-show/ America's auto industry is back! Last year, vehicle production doubled while car and trucks sales in the U.S. hit an all-time high. The Energy Department helped support this resurgence — and create over 35,000 jobs — by providing critical funding for advanced vehicle manufacturing and by driving important research and development that revved up fuel efficiency and sparked new technologies for electric vehicles. The future of America's auto industry was on display today at the Washington Auto Show , where Energy Secretary Ernest Moniz announced funding to advance the next generation of fuel-efficient vehicle technologies and a new report highlighting how the Advanced Technology Vehicles Manufacturing program is fueling economic growth in the United States. Scroll through the Energy Department-supported technologies that are lowering carbon pollution and moving America's economy forward! http://everythingshale.com/news/2016/january/28/2016-washington-auto-show/ http://everythingshale.com/news/2016/january/28/2016-washington-auto-show/ Thu, 28 January 2016 16:00:08 http://everythingshale.com/news/2016/january/28/oil-industry-throws-support-behind-energy-reform-bill/ Efforts in Congress to update the country's energy laws got the thumbs up from the oil industry Thursday. In a letter to Senate Majority Leader Mitch McConnell, R-Ky., American Petroleum Institute President Jack Gerard said Thursday his group strongly supports†the legislation, named the Energy Policy Modernization Act. The bill provides a streamlined process for natural gas export projects before the Department of Energy which will accelerate America's rise as a world-class exporter of natural gas, create U.S. jobs, grow our economy, and significantly strengthen the global energy market,†he wrote. The far-reaching bill is currently being debated in the U.S. Senate , where it is enjoying rare bipartisan support. Backers hope to have legislation up for a vote by next week. By 1:30 p.m. in Washington Thursday, more than 80 amendments to the legislation had been filed, as negotiations continue. Ltr Senate Leadership Support S 2012 Energy Policy Modernization Act http://everythingshale.com/news/2016/january/28/oil-industry-throws-support-behind-energy-reform-bill/ http://everythingshale.com/news/2016/january/28/oil-industry-throws-support-behind-energy-reform-bill/ Thu, 28 January 2016 13:05:01 http://everythingshale.com/news/2016/january/28/eagle-ford-completions-are-bucking-the-trend/ In today’s gloomy oil-price news cycle, it’s sometimes easy to overlook the fact that if not for the advent of hydraulic fracturing coupled with horizontal drilling – the Unconventional Revolution – the world would be a much different place. Things in the oil (and stock) market are certainly not super positive today, but without the unconventionals we would likely be looking at well over $100 barrel oil and in a massive bidding war with China and India to secure supply; the Middle East would likely be accumulating and centralizing more wealth and power rather than fracturing apart into sectarian in-fighting; and the ongoing shift from coal to cleaner-burning natural gas would not be as promising. Of course, that is speculation, and today’s reality is that operators foreign and domestic “will produce existing wells at rates that aren’t sustainable to preserve cash flow or compete for market share, because the cost to drill and bring online is already sunk.” Two of the largest success-drivers in the Unconventional Revolution, at least in terms of oilfields, were the previously untappable resources of North Dakota’s Bakken and The Eagle Ford of Texas. The last years’ decline in oil prices has hit the remote Bakken oilfields particularly hard , especially when you count the additional costs of getting that Bakken Crude to market. Bloomberg recently reported on the near-zero dollar value of Sour Bakken Crude . How are things faring in the Eagle Ford? First let’s look at the New Production Capacity that is a result of last month’s drilling activity. New Production Capacity is a Drillinginfo metric that correlates active rigs and permits, compares new wells with nearest-neighbor production, and creates a projection of the production capacity of each new well drilled. The Eagle Ford maintains third place among major plays, behind the almighty Permian Basin and the gas-rich Appalachian. A year ago we would have expected the Bakken, Permian and Eagle Ford to be neck-and-neck for primacy. Still the play maintains a strong position in new activity. Two common methods for operators to increase output per well are 1: to seek the “honey spots” where maximum resources are available, and 2: to increase their engineering efficiencies. To explore the first method, let’s look at rig movement within the Eagle Ford. Clearly the operators are concentrating their activity in the higher grade sections along the lower mid-line of the play area. What sort of impact is that having? Average 24 hour oil test results over the middle 2 quarters of 2015 are showing a definitive trend. Just how much of this trend is simply from hitting the higher grade areas with an open choke vs. increased engineering efficiency, and what sort of impact the aggressive initial production will have on estimated ultimate recovery (EUR) remains to be seen, and we will keep a close watch on 6-month cumulative production from this activity. http://everythingshale.com/news/2016/january/28/eagle-ford-completions-are-bucking-the-trend/ http://everythingshale.com/news/2016/january/28/eagle-ford-completions-are-bucking-the-trend/ Thu, 28 January 2016 13:00:46 http://everythingshale.com/news/2016/january/28/energy-news-roundup-shell-complete-bg-deal-senate-begin-energy-debate-russian-opec-claims/ BG Group PLC's shareholders on Thursday signed off on Royal Dutch Shell PLC's roughly $50 billion takeover bid for the company. [ WSJ ] The Senate has started debating its first comprehensive energy legislation since the George W. Bush administration, a bipartisan measure meant to update the nation's power grid and oil and gas transportation systems. [ The NY Times ] Russian Energy Minister Alexander Novak said on Thursday that Saudi Arabia had proposed oil production cuts of up to 5 percent by each country. [ CNBC/Reuters ] http://everythingshale.com/news/2016/january/28/energy-news-roundup-shell-complete-bg-deal-senate-begin-energy-debate-russian-opec-claims/ http://everythingshale.com/news/2016/january/28/energy-news-roundup-shell-complete-bg-deal-senate-begin-energy-debate-russian-opec-claims/ Thu, 28 January 2016 12:00:39 http://everythingshale.com/news/2016/january/28/ohio-elected-officials-and-statewide-groups-voice-support-for-drilling-in-wayne-national-forest/ Elected officials from both parties recently joined groups from across Ohio to advocate for responsible oil and gas development in the Wayne National Forest (WNF). The support has been overwhelming and bipartisan ahead of the public comment period coming to a close.  U.S. Senator Rob Portman, Congressman Bill Johnson, Ohio Treasurer Josh Mandel, state representatives, state senators, county commissioners, economic development agencies, chambers, and  labor unions submitted a flurry of letters to the Bureau of Land management (BLM) explain that drilling in the WNF will brings jobs and economic prosperity to the state. This news comes just days after the BLM made an announcement that it plans to move forward with oil and gas leasing on public lands. That must have been a blow to anti-fracking activists led by the “Keep it in the Ground” campaign and MoveOn.org’s  national petition, “Just say NO to fracking” on public lands. Despite the efforts of these groups, authentic local Ohio voices are prevailing and making it abundantly clear that there is strong support for drilling in the Wayne. Labor groups, including the International Union of Operating Engineers’ Local 18 attended all three public meetings held on WNF leasing and made the following comments: “The oil and natural gas industry has played an important role in the economic well-being of Ohio, and the state’s production is a strong contributor toward American energy security. … We are asking that the Bureau of Land Management approve leasing and expedite the process, as the U.S. Forest Service has already conducted a thorough NEPA review in 2012.” Bipartisan Monroe County Commissioners Tim Price (D) Carl Davis (D) Mick Schumacher (R) stated : “We are writing on behalf of our constituent and what has been a public outcry from landowners in Monroe County regarding delays with development of private mineral leases located under and adjacent to the Wayne National Forest. The real issue is property rights. In addition, since 2008, mineral development has generated more than $460,000 for local government. In 2015, Monroe County received $33,286.00 in Payment in Liu of Taxes (PILT), of which there was no monies received from federal minerals. We also find this matter concerning from a perspective of “The Secure Rural School and Community Self Determination Act of 2000” (SRS), which is another source of funding from the Wayne National Forest that provide payments to fund important local services “ United States Senator Rob Portman (OH) said : “The exploration of Eastern Ohio’s Utica and Marcellus Shale has placed Southeast Ohio at the forefront of domestic energy production. Harnessing the resources in the Wayne National Forest will help increase our nation’s energy security, create jobs, and provide economic development of much-needed areas.” Representative Bill Johnson (OH-6) also weighed in stating :  “The federal government is hindering shale development throughout significant parts of Southeastern Ohio. Some residents, particularly in Monroe and Washington Counties, have elected to lease their private mineral rights for the purpose of oil and natural gas development. But many are finding themselves in a situation where their private leases are at risk of not being developed because their private mineral leases are adjacent to, or under the surface of, the Wayne National Forest. I urge the BLM to take action on the pending leases in the Wayne National Forest.” Out of State Anti-Fossil Fuel Activists Posing As “Local” Concerned Citizens While officials and prominent labor and business groups who actually live in Ohio overwhelmingly support development in the WNF, the voice of opposition has primarily been from out-of-state anti-fossil groups who have parachuted into Ohio to pose as “local” concerned citizens. For example, here are a few highlights of MoveOn.org’s petitions to stop development in the WNF from “local” concerned citizens.  But notice how many “local” voices are coming from out of state. Whether it’s coming from the Community Environmental Legal Defense Fund (CELDF) , 350.org , or MoveOn.org or the Keep it in the Ground campaign, these out-of-state groups are certainly not representative of local citizens. By contrast, the statewide groups, elected officials and landowners who actually live and work in Ohio have made it abundantly clear that they support drilling.  Some of the supportive comments submitted to the BLM can be found here . Background on Leasing Minerals under the Wayne National Forest In Ohio, anti-fracking groups have pushed for repeated delays over leasing in the Wayne National Forest , which is managed by the U.S. Forest Service. These delays have gone on for years. In 2012, the U.S. Forest Service conducted a review which included an assessment hydraulic fracturing in the WNF and updating the forest plan as part of a Supplemental Information Review (SIR) process.  The agency determined that hydraulic fracturing and leasing of minerals for oil and gas development was entirely permissible.  Despite this relatively recent review, the BLM elected to conduct yet another review only three years later in the form of an Environmental Assessment (EA).  This EA was designed to determine if the 2012 U.S. Forest Service review was indeed adequate to move forward with leasing of federal minerals. As part of this process, the BLM hosted three public meetings to gain valuable input from the community.  The content and tone of these meetings varied significantly.  The first meeting in Marietta was productive and informative, as it was attended by a local audience.  The second meeting in Athens was a circus, as activist groups , coordinated by the Keep It in the Ground campaign, were so rowdy and disrespectful to federal employees that the meeting had to be called off early. The third meeting in Ironton was by and large not attended well and was a mixed audience of both supporters and opponents, but like Marietta, was a productive and civil. Following the meetings in November, the public was granted over two months to weigh in with formal public comment, a timeframe that the BLM extended to ensure local voices were heard.  It closed just last week.  The BLM is slated to make a decision on the Environmental Assessment sometime in March. Conclusion Whether you consider the so-called “Community Bill of Rights” that was defeated five consecutive times in Youngstown,   the statewide groups that have spoken out against the Pennsylvania Community Environmental Legal Defense (CELDF) and their continued attacks on Ohio municipal governments, or landowners that are sick and tired of fringe out-of-state activist parachuting into Ohio, one thing is clear: when it comes to oil and gas development, there is broad support from the Buckeye State. http://everythingshale.com/news/2016/january/28/ohio-elected-officials-and-statewide-groups-voice-support-for-drilling-in-wayne-national-forest/ http://everythingshale.com/news/2016/january/28/ohio-elected-officials-and-statewide-groups-voice-support-for-drilling-in-wayne-national-forest/ Thu, 28 January 2016 11:22:11 http://everythingshale.com/news/2016/january/28/latest-duke-study-on-shale-doesn-t-hold-water/ Researchers at Duke University recently released a study that looks at the consumption of water from 2009 to 2012 in Pennsylvania as shale development increased and the state was just beginning to transition to more natural gas-fired power generation. The study argues that “during the early stages of Pennsylvania’s coal-to-gas transition, production and generation of coal and natural gas contributed to a yearly 2.6–8.4% increase in the state’s water consumption.” But that argument doesn’t exactly hold water. Before we get into the reasons why, it’s worth noting that the authors of the report took the time to acknowledge assistance from John Rogers of the anti-fossil fuel group, Union of Concerned Scientists (UCS): “The authors thank John Rogers of the Union of Concerned Scientists (UCS) for useful conversations and suggestions in the early phases of this project and for providing access to the UCS database on cooling technologies in U.S. power plants.” UCS is the same organization that praised New York’s decision to ban fracking as “ a great example of science trumping politics ” and has a number of fracking “ toolkits ” that are littered with misinformation on its website. That the researchers consulted UCS data is troubling to say the least. Against that backdrop here are the top four facts to know: Fact #1: Fracking has led to significant water use reductions because natural gas requires far less water for electricity generation Several recent studies have shown that as natural gas production has increased, water use overall has plummeted, because electricity from natural gas generation requires so much less water than other energy sources. Researchers at the University of Texas , who studied Texas drought and electricity generation, found that for every gallon of water used in the hydraulic fracturing process, the state actually saved 33 gallons of water by using natural gas in electricity generation. As the report explained, “Although water use for gas production is controversial, these data show that water saved by using natural gas combined cycle plants relative to coal steam turbine plants is 25–50 times greater than the amount of water used in hydraulic fracturing to extract the gas .” Bridget Scanlon, senior research scientist at UT’s Bureau of Economic Geology, explained the data this way: “The bottom line is that hydraulic fracturing, by boosting natural gas production and moving the state from water-intensive … technologies, makes our electric power system more drought-resilient.” A report  by the environmental group, Climate Central, came to a similar conclusion, noting that as more natural gas power plants came online, water withdrawals in areas across the country declined: “Water withdrawals for power generation dropped by more than 1.5 trillion gallons per year in Ohio, New York, and Illinois; 10 states had decreases of 1 trillion gallons or more. Electricity generated from natural gas increased 370 percent on average in those 10 states, with the largest absolute increases coming in Alabama and New York.” Fact #2: Hydraulic fracturing accounts for less than one percent of total water use in Pennsylvania and across the United States Study after study has shown that hydraulic fracturing accounts for less than 1 percent of overall water use both in individual states and across the county. In Colorado, oil and gas development accounts for  0.1 percent  of the state’s total water demand; in Pennsylvania it’s less than  0.2 percent ; in Texas, one of the highest water users, it’s still well under one percent . Interestingly, a recent study by researchers from Duke University acknowledges this noting, “This estimated water use is 0.87% of the total industrial water used in the United States and only 0.04% of the total fresh water use per year in the United States.” (emphasis added) The U.S Environmental Protection Agency (EPA) also highlighted the low percentage of water use for hydraulic fracturing in its landmark draft water study. From that report : “Cumulatively, hydraulic fracturing uses and consumes billions of gallons of water each year in the United States, but at the national or state scale, it is a relatively small user (and consumer) of water compared to total water use and consumption .” (emphasis added) That’s not all. A report from the U.S. Government Accountability Office (GAO), also found overall water usage to be less than one percent of total U.S. water withdrawals. GAO attributed this to new technologies like, “the use of waterless and water-efficient fracturing fluids such as those utilizing liquefied petroleum gas (LPG) and foams, and the technique of channel fracturing, which has been shown to improve operational efficiency while reducing material cost and water usage in selected formations” ( p. 19 ) Even environmental groups have released reports admitting this. A recent Climate Central report explains , “[F]racking to produce gas typically requires 3 to 5 million gallons of water per fracked well, and significant concerns have been raised about local environmental impacts of fracking fluids that are a mix of water and chemicals.  However, in terms of water quantity, fracking consumes a relatively insignificant volume of water …” (emphasis added) As 2015 Pittsburgh Post-Gazette article noted, Pennsylvania’s water use for hydraulic fracturing pales in comparison to other industries: “According to a 2012 report from global consulting firm Accenture, while the amount of water used for shale development is large, it’s relatively lower compared to other sectors, such as agriculture. Pennsylvania’s annual total water consumption is about 3.6 trillion gallons , according to Accenture.” (emphasis added) Fact #3: Researchers admit increased natural gas use for electricity generation significantly reduces water footprint, yet only study data before the transition began A very telling aspect of the study is its time frame. The researchers chose to focus on the years in Pennsylvania when shale production was significantly ramping up and power plants were only in the very early stages of transitioning to natural gas (from 2009 to 2012). What’s interesting is that the authors of the report even admit, “If coal-fired plants continue to transition to natural gas-fired plants, the coal-to-gas transition could result in a net decrease in overall water consumption within Pennsylvania .” ( page 26 , emphasis added) Conversion to natural gas-fired power plants would also have local impacts, as the authors also acknowledge, “For example, sub-basins with increasing shale gas extraction activity could experience water consumption increases if, for instance, coal plants are unlikely to be retired. In other cases, water consumption may decrease if old coal plants are shut down and (perhaps) replaced by gas plants in the same or another sub-basin .” ( page 27 , emphasis added) But an increase in natural gas electricity generation in Pennsylvania is exactly what’s been happening. In the Northeastern part of the state in the Susquehanna River Basin, natural gas-fired power plants are being built or proposed in Bradford , Lycoming , Lackawanna , and Luzerne Counties, and Snyder County is slated for the biggest coal to natural gas conversions in the country. Recently the Scranton Times Tribune even said: “Hydraulic fracturing in the Marcellus Shale in Pennsylvania has turned U.S. gas markets upside down. Now, that seismic shift is spreading to the electric power industry and Northeast Pennsylvania is the epicenter of that change.” Fact #4: Marcellus producers recycle 90 percent of their flowback water The study does provide a short section on page 12 to account for water recycling, which is the practice of using water produced from previous wells and treated in some manner to hydraulically fracture a new well. The study uses Pennsylvania Department of Environmental Protection (DEP) calculations for 2012 that estimated that recycled water was being used in about 13 percent of hydraulically fractured wells. But what the authors don’t include is the fact that in the years since 2012, those numbers have changed significantly thanks to improved technology and best management practices. In fact, in 2013, the Pittsburgh Tribune-Review reported: “Across the state, more than 90 percent of the water that flows back to the surface during the hydraulic fracturing process is recycled for reuse at other wells , according the state Department of Environmental Protection.” (emphasis added) A 2015 DEP presentation looked at data from 2014. This presentation goes a step further to include not only the amount of recycled water now used in Pennsylvania, but also water that is directly re-used. It also shows these two methods being used from drilling fluids, hydraulic fracturing wastewater and produced water as the following charts demonstrate. This means that: “Since 2010, wastewater reuse has increased from 2.6 to over 22 million bbl/yr .” “Since 2010, wastewater recycling has increased from 4.6 to over 7.8 million bbl/yr .” The Duke researchers acknowledge an increase such as this could be helpful in their discussion, yet never mention that it actually is occurring, “ Shale operators, utilities, and governments can and do play a role in actively mitigating impacts to water resources in the coal-to-gas transition. Shale operators can increase water reuse , technology innovation (e.g. propane gel fracturing), use of water sources other than surface water when appropriate and modify the timing of water withdrawals from watersheds.” ( page 27 , emphasis added) Conclusion The bottom line is that its abundantly clear that hydraulic fracturing is helping to reduce our water footprint because natural gas electricity generation uses so much less water than other fuels. Further, the water used in hydraulic fracturing accounts for well under one percent of the United States – and Pennsylvania’s – total water use. And that percentage only continues to decline as producers continue to ramp up water reuse and recycling. Alarmist reports that do not include important context fail to provide the public with the information needed to understand the real impacts of shale development. Once again, researchers at Duke missed the mark. http://everythingshale.com/news/2016/january/28/latest-duke-study-on-shale-doesn-t-hold-water/ http://everythingshale.com/news/2016/january/28/latest-duke-study-on-shale-doesn-t-hold-water/ Thu, 28 January 2016 11:15:39 http://everythingshale.com/news/2016/january/28/fact-sheet-texas-earthquakes-get-the-facts/ http://everythingshale.com/news/2016/january/28/fact-sheet-texas-earthquakes-get-the-facts/ http://everythingshale.com/news/2016/january/28/fact-sheet-texas-earthquakes-get-the-facts/ Thu, 28 January 2016 09:14:17 http://everythingshale.com/news/2016/january/28/cities-introduce-smart-programs-in-divergent-manners/ Cities across the globe have followed multiple tracks in their quest to become smart.†It isn't a question of right or wrong. However, two key themes are emerging in their approach either start with a pilot project that produces quick results, or undertake a comprehensive master plan that strategically lays out the coming years and decades. Every city situation is unique,†said Fred Ellermeier, Vice President and Chief Operating Officer of Smart Integrated Infrastructure for Black & Veatch. We can follow either fork in the road. We've helped clients in both directions.†Jennifer James, Director of Smart City Solutions for Black & Veatch's Smart Integrated Infrastructure business, said many cities are implementing individual projects to get smart programs off the ground. A lot of cities are adopting smart technologies, and putting smart city plans and initiatives in place,†James said. To say that any one city has fully gotten to that point where you can anoint it the epitome of a smart city, that's still a work in progress.†Yet there are some exciting initial projects that hold the promise of further expansion and improvement in the quality of life for citizens, James said. In fact, Black & Veatch recently announced it has partnered with Envision America , a program announced by the White House to advance smart city program planning and implementation. Black & Veatch will apply its engineering, construction, program management and data analytics expertise to help selected U.S. cities develop and deploy smart city programs. Other examples that Black & Veatch is involved with include: A major metropolitan city in the U.S., which is converting more than 7,500 old telephone booths into smart city kiosks that can be used freely by the public; Kansas City, Mo., which is launching a Smart + Connected City framework with Cisco, to create a kiosk information system in conjunction with its brand new street car line. Black & Veatch will support the phase of implementation that incorporates smart water systems and other smart integrated infrastructure aspects; Leak detection programs for a Midwestern and a Southeastern water system to help curb water losses, predict water demand and reduce energy costs; The Hawaiian Electric Company (HECO), which is seeking to identify viable strategies for transforming the island chain's power system to 100 percent renewables by 2045; Master planning of smart communication and electrical infrastructure for a more than 500 acre bayfront redevelopment site in Chula Vista, Calif.; Port of San Diego in California, which is implementing a wide array of programs to encourage energy efficiency and reduce its carbon footprint. The port is landlord for 800 tenants and sub-tenants; The building out of a network of electric vehicle charging stations across the U.S., and assisting with the build out of hydrogen fuel cell stations on both the East and West coasts. Upgrading of streetlights to network-connected LED technology; Resilience and coastal protection programs that address risks from storms, flooding and rising sea levels; Numerous smart grid initiatives to upgrade infrastructure and add advanced sensors, controls and analytics. This will reduce energy losses, improve grid reliability and enable the integration of distributed energy resources. Smart cities of the future will leverage technology to be more sustainable, more efficient, more resilient, and attract more people and businesses to their city or region,†said Steph Stoppenhagen, Business Development Manager, Smart City Solutions. This is in response to increasing urbanization, climate change, dwindling natural resources and challenging economic conditions. The city is going to increasingly be the structure that needs to take action and ensure its own long-term viability.†Master Planning Provides a Roadmap to the Future Mike Bossom, Solutions Lead for Black & Veatch's Smart Integrated Infrastructure, said Black & Veatch is developing a master plan for the city of Chula Vista, Calif ., a greenfield site on the bayfront that will provide an opportunity to build a smart community from the ground up. We'll provide an analysis of the various options, the advantages and disadvantages, the different business models that could be used, as well as expenses associated with each, and an assessment of city ownership vs. leasing or private partnerships,†Bossom said. We'll show the positives and negatives of each outcome.†Because the development is a greenfield site including offices, condominiums, a convention center, restaurants and more city leaders want to make sure the most advanced, flexible technologies are used. They are taking a proactive approach, saying ‘I want to do this once, and I want to do it right,'†Bossom said. The city recognizes that in order to become a smart city, they need to take a look at their energy use, improve operational efficiencies, and in some cases, increase revenues. They need to integrate their infrastructure with a communications network. So instead of going out to individual partners to do that, we were able to come with a single team and a single focus. It is their roadmap to the future.†Reasons for Entering the Smart City Space Just as every city situation is unique, the reasons for launching into the smart city arena are just as varied. Bossom and James said the motivation and benefits often fall into the following categories: Operational Savings A street lighting program that converts standard mercury vapor lights to LED bulbs has an immediate 50 to 60 percent energy savings, Bossom said. Add in controls that allow for dimming schedules, and take another 10 to 15 percent in savings. If today you're spending $1 million on your street lighting bill every year, you can expect to chop $500,000 right off the top,†Bossom said. New Revenue Streams A major U.S. metropolitan city is swapping out old pay phones and installing high-speed interactive kiosks. The kiosks are funded by an advertising model. The city is not only getting new infrastructure, they're getting a revenue stream of about $500 million over 10 years, over and beyond that work,†Bossom noted. Another company Black & Veatch is working with is installing free electric vehicle charging stations at grocery store chains and other high traffic areas, and gaining sponsorship revenue based on the location of the stations. Environmental Impacts Many cities have stated targets of reducing greenhouse gas emissions and lowering their overall environmental footprint. This can be done with electric vehicle charging stations, active building energy management, traffic control, parking control, progressive transportation options, smart water and electric meters, trash bins that can alert when they are full, among others. Safety and Security The sensors and video components that are now available can literally put eyes and ears in specific locations to benefit public safety.  Acoustic detection is used by police departments to identify gunfire; street lights can strobe to emergency flashing red to notify first responders of someone in need; video sensors can monitor crowd control and safety at large events; computers can now handle voluminous amounts of data in real time for license plate recognition to track down criminal suspects. Other factors include improving the resilience of city systems from disruptive events like storms and power outages. Economic Development Just as light rail and new mass transit are known for attracting new businesses and population, businesses are attracted to locations that are smart.†It means they'll have the best in network connections, information and data processing, which in turn will attract talent, foot traffic, quality of life, amenities and entertainment. James noted that economic progress tends to beget more economic progress, and businesses want to be part of that profitable growth. It's highly correlated,†she said. The foundational infrastructure systems energy, water, telecommunications and transportation are going to get smarter and more connected, based upon advances in sensors, cloud computing, edge computing and data analytics, such as our ASSET360 TM platform . Then when you bring in items like public Wi-Fi and smart kiosks that are connected to essential city services,  entertainment and information, that provides an opportunity for improved community engagement,†James said. The city of the future is going to strongly feature the voice of its citizens, and they will be much more active participants in determining how cities operate,†she noted. They'll have much more access to information and collaboration opportunities†Editor's Note: This is the second of a five-part series on smart cities that can be found in the Solutions Online library on bv.com . Story by Gordon Heft, Black & Veatch  Published originally on Black & Veatch Solutions http://everythingshale.com/news/2016/january/28/cities-introduce-smart-programs-in-divergent-manners/ http://everythingshale.com/news/2016/january/28/cities-introduce-smart-programs-in-divergent-manners/ Thu, 28 January 2016 09:00:01 http://everythingshale.com/news/2016/january/28/lay-ups-loom-in-the-dry-freight-market/ I stare out my office window on the 23rd floor and there they are, stretched out as far as my eyes can see, dry bulk vessels sitting pretty in the Singapore strait. Although each vessel is of a different shape and size they all have one common enemy — unemployment. With the engines running and crew on board, these vessels are burning fuel into thin air, literally waiting for orders. Owners are holding steady, with many unwavering in the face of historical lows in the freight market. The time charter equivalent of current Capesize freight voyage rates is around $1,000-$2,000/day in the Pacific, and operating a Capesize vessel even with the current bunker market rout, costs around $6,000-$7,000/day, depending on the vessel specs of course. With these sorts of numbers, do the economics make sense for owners to park their vessels in cold lay-up, i.e. turn off the engine, move the crew onshore, and employ two watchmen to sit on deck? According to sources, the cost of cold lay-up only makes sense if the vessel is squared away for at least a period of time. The upfront fixed cost of putting a vessel into lay-up is high, considering the cost incurred to remove and reinstate the crew and ballast the vessel to and fro. If a vessel is locked in Malaysia’s Labuan, the daily cost of the lay-up was heard to be around $1,000-$2,000/day, over a minimum of six months. In order to bring the vessel back to life, it would take from two weeks up to one month. At the moment, there’s a trickle of vessels calling it quits and heading to rehab, but many more are waiting for a recovery in the market. In effect, it’s like putting a plaster on a cancer cell. The absorption of tonnage has to be significant, culling out the long tonnage currently drifting in North China and Singapore, in order to see rates go back to black. Owners are looking for divine intervention – such as weather disruptions at discharge ports, or a surge in positional tightness from an increase in energy needs in Europe after an unseasonably hot summer. And as the Goddess of Fortune looks down from the Singapore river into the sea, one can only wonder when the tides will return in favor of owners. http://everythingshale.com/news/2016/january/28/lay-ups-loom-in-the-dry-freight-market/ http://everythingshale.com/news/2016/january/28/lay-ups-loom-in-the-dry-freight-market/ Thu, 28 January 2016 05:52:00 http://everythingshale.com/news/2016/january/27/good-news-bad-news-for-us-biodiesel-industry-in-2016/ Traders, marketers, producers and other stakeholders of the US biodiesel industry have converged on Tampa, Fla., this week for the 2016 National Biodiesel Conference to review the last year and look ahead to what 2016 brings. Despite spending 2015 awash in uncertainty due to the US Environmental Protection Agency’s delayed decision on the Renewable Fuel Standard blending mandates, the biodiesel industry ended the year with a few key victories. First, the EPA in late November finally released the blending mandates for 2014, 2015 and 2016, giving the industry guidance into how much biodiesel will be required to be blended into US fuel stocks. Second, the industry for the first time in three years enters 2016 with the federal $1/gal blenders tax credit already in place. Congress reinstated the credit in December through the end of 2016. Finally, biodiesel production remains strong. Data released by the EPA late last week showed that biomass-based diesel volumes reached 1.814 billion gallons, breaking the previous record of 1.79 billion gallons set in 2013. That number far outpaces the 1.73 billion gallons called for in the 2015 RFS mandate. Furthermore, the RFS mandates call for an increase of biodiesel to 1.9 billion gallons in 2016 and 2 billion gallons in 2017. Joe Jobe, the chief executive officer of the National Biodiesel Board, told reporters on Tuesday in Tampa that domestic producers have more than 3 billion gallons of standing production capacity registered with the EPA. But while the industry has secured some milestones, all is not well. The free fall in oil prices and refined products continues to impact the biodiesel industry. Each drop puts biodiesel at a competitive disadvantage to diesel fuel. NYMEX ultra-low sulfur diesel futures fell to 86.57 cents/gal on Jan. 21, the lowest level in more than 10 years. Meanwhile, feedstock soybean oil futures remain in the 30 cents/lb range. The difference between the feedstocks and heating oil futures means that the boho factor, which measures the relationship between biodiesel and diesel fuel that producers use to determine margins, has jumped dramatically in recent weeks. On Jan. 20, the boho factor reached $1.33/gal, the highest level since June 1, 2011. Low ULSD futures put biodiesel at a competitive disadvantage. It doesn’t make financial sense to obligated parties when diesel fuel is so cheap. Obligated parties often find it more prudent to buy Renewable Identification Numbers to satisfy RFS blending mandates. For biodiesel to be competitive again, sources tell Platts,  a few things could happen. First, ULSD futures could rise, cutting into the boho and making physical biodiesel more attractive. Crude oil prices have rebounded slightly in the last few days, but no one can say with confidence that the market has hit rock bottom and prices will rise. Second, soybean oil prices could fall, lowering feedstock costs and making biodiesel cheaper to produce. This could allow producers to lower offers to make the fuel more competitive to diesel fuel. The final option would be a rise in RIN prices. In February, the EPA will release its first set of renewable fuel production numbers for January 2016. If production is low, RIN prices could be forced to rise as obligated parties start buying up RINs before they become scarce. Regardless, traders will be paying a lot of attention to several markets — not just biodiesel — hoping for a clue as to what comes next. http://everythingshale.com/news/2016/january/27/good-news-bad-news-for-us-biodiesel-industry-in-2016/ http://everythingshale.com/news/2016/january/27/good-news-bad-news-for-us-biodiesel-industry-in-2016/ Wed, 27 January 2016 23:01:37 http://everythingshale.com/news/2016/january/27/rep-polis-revisits-backing-radical-and-extreme-measures-that-would-drive-oil-and-gas-out-of-colorado/ National activist organizations backing a slate of ballot initiatives to ban fracking in Colorado may be rekindling a partnership with an old ally. Millionaire Boulder Congressman Jared Polis, D-Colo. hinted this week that he may throw substantial financial support behind one or more of the initiatives activists are pushing to ban fracking. Back in 2014, Polis had been advocating for a pair of statewide initiatives but he eventually pulled his support for them after Gov. John Hickenlooper (D)  described them as “radical” and “extreme measures that would drive oil and gas out of Colorado.” In fact, Gov. Hickenlooper joined with a bipartisan coalition – including a huge swath of Colorado’s business community – to oppose those measures. The coalition was so broad and deep – reflecting the  tens of thousands of jobs and hundreds of millions of dollars in state and local tax revenues  supported by the oil and gas industry in Colorado – Polis ended up backing away from his support of those measures in exchange for creating the oil and gas task force that would craft recommendations. Now, on the heels of a Colorado Oil and Gas Conservation Commission (COGCC) rulemaking on those recommendations, Polis hinted to the Denver Post , that he may revisit his support of those initiatives. As the Denver Post reports: “The Colorado Oil and Gas Conservation Commission has “failed” to protect homeowners and communities from the impacts of drilling, U.S. Rep. Jared Polis said late Tuesday, leaving the door open to his throwing his support behind another citizen-initiated ballot measure this fall.” Should Polis choose to support an anti-energy ballot initiative, he will have options. To date, a group with close ties to Food & Water Watch and the Sierra Club, Coloradans Resisting Extreme Energy Development (CREED) has put forward 11 proposals ranging from an outright ban on fracking to a series of new setback requirements that could cost billions in state GDP and result in thousands of job losses . Another camp, backed by the national group, Community Environmental Legal Defense Fund (CELDF) that fosters an extreme position on bankrupting communities, is also mounting a campaign to ban shale development in the state. And as the Denver Post reports, Polis indicated where he is likely to throw his support should he decide to back the campaign: “I think that setbacks and giving communities a legitimate say on what kind of industrial activity is appropriate in backyards and schoolyards are reasonable solutions that ought to be considered,” Polis said in a statement. “I’m hopeful that all stakeholders can coalesce around a thoughtful plan.” But Polis isn’t likely to have much support from prominent members of his own party. And that should tell the citizens of Colorado something about the fringe ideology fueling the anti-energy campaigns that Polis could once again be wading into. http://everythingshale.com/news/2016/january/27/rep-polis-revisits-backing-radical-and-extreme-measures-that-would-drive-oil-and-gas-out-of-colorado/ http://everythingshale.com/news/2016/january/27/rep-polis-revisits-backing-radical-and-extreme-measures-that-would-drive-oil-and-gas-out-of-colorado/ Wed, 27 January 2016 20:46:57 http://everythingshale.com/news/2016/january/27/winter-energy-saving-tips/ This article will help you find strategies to help you save energy during the cool fall and cold winter months. Some of the tips below are free and can be used on a daily basis to increase your savings; others are simple and inexpensive actions you can take to ensure maximum savings through the winter. If you haven’t already, conduct an energy audit  to find out where you can save the most, and consider making a larger investment for long-term energy savings. Also check out no-cost and low-cost tips to save energy during the spring and summer . TAKE ADVANTAGE OF HEAT FROM THE SUN   Open curtains on your south-facing windows during the day to allow sunlight to naturally heat your home, and close them at night to reduce the chill you may feel from cold windows. COVER DRAFTY WINDOWS Use a heavy-duty, clear plastic sheet on a frame or tape clear plastic film to the inside of your window frames during the cold winter months. Make sure the plastic is sealed tightly to the frame to help reduce infiltration. Install tight-fitting, insulating drapes or shades on windows that feel drafty after weatherizing. Find out about other window treatments and coverings that can improve energy efficiency. ADJUST THE TEMPERATURE When you are home and awake, set your thermostat as low as is comfortable. When you are asleep or out of the house, turn your thermostat back 10° to 15° for eight hours and save around 10% a year on your heating and cooling bills. A programmable thermostat can make it easy to set back your temperature. Find out how to operate your thermostat for maximum energy savings. Also see ENERGY STAR’s June 5, 2008, podcast for video instructions on operating your programmable thermostat. FIND AND SEAL LEAKS Seal the air leaks around utility cut-throughs for pipes (“plumbing penetrations”), gaps around chimneys and recessed lights in insulated ceilings, and unfinished spaces behind cupboards and closets. Find out how to detect air leaks . Learn more about air sealing new and existing homes . Add caulk or weatherstripping to seal air leaks around leaky doors and windows. Find out how to select and apply the appropriate caulk . Learn how to select and apply weatherstripping . MAINTAIN YOUR HEATING SYSTEMS Schedule service for your heating system . Find out what maintenance is required to keep your heating system operating efficiently. Furnaces: Replace your furnace filter once a month or as needed. Find out more about maintaining your furnace or boiler . Wood- and Pellet-Burning Heaters: Clean the flue vent regularly and clean the inside of the appliance with a wire brush periodically to ensure that your home is heated efficiently. Find other maintenance recommendations for  wood- and pellet-burning appliances . REDUCE HEAT LOSS FROM THE FIREPLACE   Keep your fireplace damper closed unless a fire is burning. Keeping the damper open is like keeping a window wide open during the winter; it allows warm air to go right up the chimney. When you use the fireplace, reduce heat loss by opening dampers in the bottom of the firebox (if provided) or open the nearest window slightly–approximately 1 inch–and close doors leading into the room. Lower the thermostat setting to between 50° and 55°F. If you never use your fireplace, plug and seal the chimney flue. If you do use the fireplace, install tempered glass doors and a heat-air exchange system that blows warmed air back into the room. Check the seal on the fireplace flue damper and make it as snug as possible. Purchase grates made of C-shaped metal tubes to draw cool room air into the fireplace and circulate warm air back into the room. Add caulking around the fireplace hearth. Find out more techniques to improve your fireplace or wood-burning appliance’s efficiency . Learn tips for safe and efficient fireplace installation and wood burning . LOWER YOUR WATER HEATING COSTS Water heating accounts for about 18% of the energy consumed in your home. Turn down the temperature of your water heater to the warm setting (120°F). You’ll not only save energy, you’ll avoid scalding your hands. Find other strategies for energy-efficient water heating . http://everythingshale.com/news/2016/january/27/winter-energy-saving-tips/ http://everythingshale.com/news/2016/january/27/winter-energy-saving-tips/ Wed, 27 January 2016 16:00:11 http://everythingshale.com/news/2016/january/27/epa-advisors-contradict-themselves-on-landmark-fracking-study/ The hydraulic fracturing panel of the Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) recently released its draft recommendations on EPA’s landmark draft assessment of hydraulic fracturing and groundwater.  In the document, the SAB suggests that the agency change the language of its primary finding that hydraulic fracturing has “not led to widespread, systemic impacts to drinking water resources” as well as a number of its top line findings. But not once in the over-100 page document, does SAB provide any evidence to support its request. Even more confounding is that the SAB seems to contradict itself at every turn, which raises a lot of questions about how thorough of a review SAB actually did. With the teleconference on the SAB’s draft recommendations coming up early next week, Energy In Depth has laid out the top six contradictions and inconsistencies we found in the text: #1: Using ‘outliers’ to demand ‘systemic’ changes What’s particularly revealing is a comment by one SAB member to Bloomberg : “‘It’s important to characterize and discuss the frequency and severity of outliers that have occurred,’ said panelist Katherine Bennett Ensor, chairwoman of the Rice University Department of Statistics.” (emphasis added) In other words, SAB is asking EPA to alter scientific findings based on what they admit are “ outliers .” By definition, an “outlier” is neither widespread nor systemic. #2: Admit ‘infrequent’ impacts, yet want EPA’s similar finding changed The SAB states, “Page ES-6, lines 20-21: ‘ The number of identified cases, however, was small compared to the number of hydraulically fractured wells .’ The descriptor ‘small’ is vague and subjective. The agency should quantify this statement based on the available data, and acknowledge the uncertainty in the estimates.” SAB takes issue with the descriptor “small” yet admits that impacts happen “infrequently”: “Furthermore, the EPA should provide more emphasis in the Executive Summary on the importance of local hydraulic fracturing impacts.  These local-level hydraulic fracturing impacts may occur in infrequently , but they can be severe and the Executive Summary should more clearly describe such impacts.” (emphasis added) If SAB is admitting impacts are “infrequent,” that’s not any different from EPA’s characterization of the number of cases being “small.” #3: Claim EPA should change spill finding because it has not provided “evidence of absence of impact” On spills, the SAB has this to say: “The EPA’s major finding and conclusion described in Section 5.10.1 of the draft Assessment Report that there were ‘no documented impacts to groundwater’ for the 497 spills evaluated by the EPA, and in Section 10.1.2., on page 10-8, and on page ES-13, where the EPA notes that “ None of the spills of hydraulic fracturing fluid were reported to have reached ground water, ” is not supported by the information and data presented in the draft Assessment Report, due to the EPA’s incomplete assessment of spilled liquids and consequences. The SAB is concerned that this major finding is supported only by an absence of evidence rather than by evidence of absence of impact .” (emphasis added) We’re not exactly sure how one provides “evidence of absence of impact.” But if there’s an absence of evidence of impact, doesn’t that mean that impacts are not widespread or systemic? #4: Demand EPA emphasize “long-distance travel incidents” after admitting they are “rare”  In the flowback section of the report, SAB states that EPA should include “long-distance travel incidents” of contaminates to drinking water resources even though such incidents are exceedingly “rare”: “In fact, researchers have identified some cases where compounds (both tracers intentionally spilled on the land surface for research (Brantley et al., 2014) and contaminants unintentionally spilled on the land surface or leaked from a borehole (Sloto et al., 2013; Llewellyn et al., 2015) entered fractures and moved several kilometers into aquifers. While such long-distance travel incidents have only been rarely reported (Vidic et al., 2013; Llewellyn et al., 2015), the draft Assessment Report should describe the frequency and severity of such events and recognize that such events occur.” (emphasis added) SAB continues, “Thus, the draft Assessment Report should clarify that long-distance travel of hydraulic fracturing constituents is possible, has been reported in the published literature though rarely , and can usually prevented with adequate management practices.” (emphasis added) One of the rare reports SAB quotes is a study led by Garth Llewellyn, which SAB cites no less than eight times throughout the recommendations.   But this study is deeply flawed: in it the researchers argue that contaminates from natural gas wells several miles away seeped into a landowner’s drinking water well.  However, they based their argument almost entirely on the detection of a trace concentration of the compound 2-BE in replacement wells they were collecting samples from. 2-BE can be found in hundreds if not thousands of household products, including things as common as Windex and cosmetics. Notably, 2-BE is also found in Type I/II Portland cement, which is used in water and monitoring well construction – and was specifically used in the construction of these replacement wells . In fact, if talk of 2-BE sounds familiar that’s because in 2011, EPA seized on a “hit” of 2-BE as potential evidence that hydraulic fracturing had impacted water quality in Wyoming, only to be forced later to disavow the report and exit from the case entirely. Later, regulators determined that the contamination was likely a false-positive detection of 2-BE and glycols, traced to the materials EPA used to construct the monitoring wells.  Meanwhile, the Wyoming DEP just released the results  of its 30-month investigation into water contamination in Pavillion, Wyoming: the agency concluded that hydraulic fracturing is “unlikely” to have been the cause. This all leads to the question: which is more likely? Is it more likely that a contaminant originating from the cement used to build the actual well was detected by these researchers? Or is it more likely that the compound detected migrated through miles of solid rock to contaminate the water in the well? But most importantly: if the SAB had to stretch that much to focus on a study that has such shaky science, that’s a pretty clear indication that impacts are not widespread or systemic. #5: Claim top line conclusions are “inconsistent with observations presented in the body of the report” but fail to demonstrate how The SAB claims, “The SAB is concerned that these major findings are presented ambiguously within the Executive Summary and are inconsistent with the observations, data, and levels of uncertainty presented and discussed in the body of the draft Assessment Report.” But at no point does the SAB demonstrate how the findings are inconsistent with EPA’s observations and data.  If SAB is going to criticize EPA for not providing “evidence of absence of impact” shouldn’t SAB have same the obligation to present evidence that EPA’s finding should be changed? #6: Actually claim the general public can’t understand what “no widespread, systemic impacts” means It’s difficult to see how anyone could claim that “no widespread, systemic impacts to groundwater resources” isn’t understandable to the general public.  Yet SAB states, “As currently written, the Executive Summary is understandable to technical experts in geoscience and engineering, but will be less clear to a general audience. It is important that the general public be able to understand the Assessment Report and especially the Executive Summary.” Background on the scope of the study One of the key passages in the recommendations is where the SAB admits, “The conclusory discussion in Chapter 6 notes that fractures created during hydraulic fracturing can extend out of the target production zone and upwardly migrate. The EPA should delete these conclusions from the draft Assessment Report unless the EPA supports these statements with data or modeling .” (emphasis added) In this passage, SAB is clearly stating that there’s no scientific evidence that the fracking process itself has contaminated water, which completely supports EPA’s conclusions. Of course, the whole debate surrounding “no widespread, systemic impacts” has to do with the widened scope of the study, which encompasses many activities outside of the fracking process – and there’s quite a history behind that decision to expand the scope. In 2009, when Congress first asked EPA to conduct a national study, it specified that EPA should focus on the relationship between the fracking process itself and drinking water.  But as a recent Senate Environment and Public Works report noted, EPA, feeling pressure from anti-fracking groups, greatly expanded the scope of the study to include many activities involving water that support hydraulic fracturing: “Despite clear Congressional language, EPA tried to alter the mandated scope of its inquiry to seize any potential opportunity to justify a federal regulatory power grab. Emails obtained by the Committee provide evidence of EPA scheming to push the limits of the study’s parameters . In one instance, an email from an EPA official and member of the hydraulic fracturing study steering committee reveals that as of March 11, 2010: ‘[The official] was successful (at least for now) in getting the most expansive scope definition. Still limited to drinking water, but would include the drawdowns of fresh water (surface, ground or utility supplied) used to make-up the frac fluids (2 to 7 million gallons a frac event), the fracturing process itself, and waste management issues like produced water handling, spills, waste pits that might impact surface or ground water sources.’ (emphasis added). After unilaterally expanding the study, EPA ignored warnings by the Science Advisory Board (SAB) that its scope was too broad, inconsistent, and included aspects not directly related to the hydraulic fracturing process.” (emphasis added) As a meeting summary from 2010 between EPA and environmental groups explains, anti-fracking groups “expressed concern that the study will not include all aspects of the HF and natural gas extraction process. EPA will use a lifecycle framework to organize the study. While a complete mass balance will most likely be beyond the scope of the study, EPA is currently planning to consider all stages of HF activities, including initial water withdrawals and waste storage and disposal.” Not only did EPA significantly expand the scope to include activities other than fracking, it also significantly expanded definition for what constitutes “drinking water.” From the 2015 draft report : “Drinking water resources are defined within this report as any body of ground water or surface water that now serves, or in the future could serve, as a source of drinking water for public or private use. This is broader than most federal and state regulatory definitions of drinking water and encompasses both fresh and non-fresh bodies of water .” (ES-3; emphasis added) Yet even after going above and beyond what they asked – by greatly expanding the scope – activists didn’t get the conclusions they wanted, and since then, they have been exerting a lot of public pressure on SAB to force EPA into revising its key finding, albeit without any evidence. The bottom line is that if there were any evidence to suggest widespread or systemic impacts to drinking water from hydraulic fracturing, it would have been uncovered during the past decade of extensive study of the process, and the SAB would certainly be able to cite it in its recommendations as evidence that that findings need to be changed. Instead, the SAB, without any examples to point to, can only produce a document that contradicts itself at every turn. http://everythingshale.com/news/2016/january/27/epa-advisors-contradict-themselves-on-landmark-fracking-study/ http://everythingshale.com/news/2016/january/27/epa-advisors-contradict-themselves-on-landmark-fracking-study/ Wed, 27 January 2016 10:37:21 http://everythingshale.com/news/2016/january/27/iran-s-parliamentary-elections-inside-the-candidate-approval-process/ As in past elections, the Guardian Council seems poised to disqualify thousands of registered Majlis candidates, and its procedures for doing so are revealing. On February 26, Iran will hold elections for parliament (also known as the Majlis or Islamic Consultative Assembly) and the Assembly of Experts. Initial reports indicate that thousands of candidates have been rejected by the Guardian Council, but no comprehensive list is available yet, and the manner in which candidates are apportioned to individual districts will likely prove more important than the overall vetting statistics. While Supreme Leader Ali Khamenei desires high voter turnout to prove the regime’s legitimacy, on January 20 he cautioned, “This does not mean that those who disapprove of the regime should be voted into the Majlis.” The following day, however, President Hassan Rouhani stated, “During these elections, impartiality, noninterference, the essence of constitution, complete security, and competition…need to be demonstrated,” adding that “the Majlis is a house for the people, not a certain faction.” BACKGROUND There are 290 seats in the Majlis, distributed between 207 electoral districts. With thirty seats, Tehran has the largest delegation of any district; the next largest has only six seats. Members of parliament are elected to four-year terms. According to Article 28 of the Electoral Laws, Majlis candidates are required to meet the following conditions to run: Belief in and practical obligation to Islam and the holy system of the Islamic Republic of Iran. Citizenship in the Islamic Republic of Iran. Loyalty to the constitution and the principle of “absolute guardianship of the jurisprudent” ( velayat-e faqih ). Possession of at least an associate’s degree or equivalent. An acceptable reputation in one’s electoral district. Acceptable physical health (at minimum the ability to see, hear, and speak). At least thirty years of age, and at most seventy-five. According to Majlis Monitor, 165 members of the current parliament are in their first term, 103 in their second or third, and 22 in their fourth or more. The historical reelection rate to the Majlis is 29%. In addition, 33 current members are clerics, and 9 are women. BECOMING A CANDIDATE According to the Islamic Republic News Agency, 12,123 individuals registered for the Majlis elections by submitting their names to the Interior Ministry during the December 17-23 signup period. Tehran province registered 2,477 candidates (2,242 men and 508 women). Guardian Council spokesman Nejatollah Ebrahimian remarked that approximately eight thousand of the applicants would be running in their first election. Responsibility for administering elections and vetting candidates is divided between the Interior Ministry (a large bureaucracy whose portfolio also includes internal security and intelligence organs) and the Guardian Council (a body whose twelve members are appointed directly or indirectly by the Supreme Leader and wield wide-ranging powers). In practice, the ministry verifies the candidates’ legal qualifications while the council assesses their ideological qualifications. Between December 26 and January 4, the Interior Ministry conducted its investigations through legally mandated election boards ( heyat-ha-ye ejrai ) drawn from provincial, county, and district governments and the ministry itself. These background checks included reviewing candidates’ military service, as well as their records with the police, judiciary, intelligence organs, and census registry. The results of these assessments were announced on January 5; rejected applicants were allowed to appeal their status until January 9, and the election boards deliberated on these appeals until January 16. As of January 19, 10,954 of the registered candidates were approved by the Interior Ministry and 814 were rejected. In addition, 498 candidates had withdrawn their names as of January 17 (large numbers of withdrawals are typical during Iranian elections). The second round of vetting is conducted by the Guardian Council through its supervisory boards ( heyat-ha-ye nezami ). Article 99 of the constitution states that the council “is responsible for supervising the elections of the Experts Assembly, the President of the Republic, the Islamic Consultative Assembly, and referrals to the public vote and referenda.” Since 1991, this clause has been interpreted by the council and by law as nezarat-i estesvabi (approbatory approval), applicable to all stages of all elections, including the candidate vetting process. Holding or having held a Majlis seat or even the presidency is not sufficient to ensure approval — according to analyst Yasmin Alem, the Guardian Council rejected forty incumbents in the 1992 elections, eighty in 2004, and twenty in 2008. As of January 20, approximately thirty of the incumbents who applied for the upcoming elections had been rejected. In general, only those candidates approved by the council are allowed to campaign, let alone appear on the ballot. Ebrahimian previously noted that a “tsunami of candidates” had registered for this election, alleging that “some candidates cannot even write their own names.” According to him, “It is possible that some political groups are registering in mass…to reach their own goals…[and they] must know the effect of this on our work.” He also acknowledged that the large number of candidates “decreases the opportunity to investigate individuals’ background,” raising the likelihood that lesser-known first-time applicants would be rejected. Senior Iranian officials disagree on whether the government needs to explain its disqualifications. Interior Minister Abdolreza Rahmani Fazli has stated that candidates should be told why they are rejected, and that investigations need to be exact and according to the law. According to Ebrahimian, however, public announcements of disqualifications “are restricted due to legal reasons,” and relevant statistics will be published later. The Guardian Council has published such data in the past. In 2004, it explained the thousands of disqualifications made that year as follows: 12.5% were for financial corruption, 13.5% for moral corruption, 14.5% for sympathy toward or membership in counterrevolutionary groups, 13.5% for lack of belief in the principles of Islam, 6.8% for publication of untrue statements and disturbance of public opinion, 15.7% for ill repute, 6.5% for acting against national security, and 16.5% for lack of belief in the constitution. This year, Ebrahimian and others — including council secretary Ahmad Jannati and Friday prayer leaders in Mashhad and Tehran — have stated that they will also assess every potential candidate’s role in the disputed 2009 presidential election and subsequent protests, which hardliners commonly refer to as the “sedition.” On January 16, council member Siamak Rahpeyk announced that while official statistics were not yet available, candidates were being directly informed if they were approved or rejected. As of January 20, neither the council nor any official state media had provided final statistics, though Rahpeyk stated that “out of the twelve thousand candidates, approximately 26% were rejected and 28% were not accepted” (a dubious distinction that is becoming increasingly common in official statements on the matter). That same day, Fars News published a table of the council’s vetting results, but it omitted details for Tehran, Isfahan, and seven other provinces, covering only 6,160 candidates in total. The Fars report indicated that in the twenty-two provinces with data available, the council had confirmed 2,667 candidates. According to one council official, “It is likely that during the next vetting round, the Guardian Council will reinstate 10-15% of rejected candidates.” On January 18, immediately following discussions related to the high number of disqualified candidates, the council published a report titled “Essentials for Examining Parliamentary Candidates’ Qualifications and Standards for Members of Parliament According to the Words of Imam Khomeini and Supreme Leader Khamenei.” Sections in this twenty-eight-page document include “The Importance of Understanding These Duties and Preserving the Guardian Council’s Dignity” and “Resistance Against Those Wanting Excessive Concessions in Qualifications.” NEXT STEPS Previous elections have witnessed similar mass disqualifications by the Guardian Council. In January 2004, it rejected 3,600 out of 8,157 candidates for Majlis, including 83 sitting members. Ultimately, around a thousand of these were reinstated after one-third of the Majlis resigned in protest. According to Article 52 of the Electoral Laws, if the Guardian Council rejects a candidate accepted by the Interior Ministry’s election boards, he or she may protest. The council is supposed to announce its final decision to the Interior Ministry twenty days after the initial report of its supervisory boards. This twenty-day period began on January 17 and will continue until February 5. Finally, approved candidates have only a small window for campaigning (February 18-24) and can be disqualified for doing so before that date, including any promotional efforts they conduct through social media or other online outlets. That said, many press articles will appear in the preceding weeks that provide information on individual candidates. Patrick Schmidt is a research assistant at The Washington Institute. Originally Posted on January 22, 2016 ©2016 The Washington Institute for Near East Policy. Reprinted with permission. http://everythingshale.com/news/2016/january/27/iran-s-parliamentary-elections-inside-the-candidate-approval-process/ http://everythingshale.com/news/2016/january/27/iran-s-parliamentary-elections-inside-the-candidate-approval-process/ Wed, 27 January 2016 09:00:06 http://everythingshale.com/news/2016/january/27/shaky-signs-seen-in-us-shale-oil-industry-while-future-looks-rosy-for-natural-gas/ Last night's API report yielded a whopping 11.4 million barrel build to crude stocks, as a combination of planned and unplanned refinery maintenance gives way to a diminished need for crude in the system. Yesterday's rumors and murmurs of OPEC and non-OPEC coordinated cuts have been thrown by the wayside, while focus on the ailing US shale industry returns to the fore amid quarterly earnings results. While widespread capex cuts are nothing new in the current environment, the announcement by Continental Resources the second-largest oil producer in North Dakota and one of the most cost-efficient that it needs prices to rise above $37 to be profitable is spooking the oil industry today. Further stoking these fears is Continental's acknowledgement that it is cutting production this year by 10%  as it has no more wiggle room for innovation. On the flipside, Pioneer Natural Resources is boosting capex modestly ; this is likely facilitated by its aggressive hedging program (at prices much higher than current levels). Onto the economic data front we go. Hot on the heels of yesterday's better-than-expected confidence data out of the US comes decent numbers from France and Germany today. Brazil and Italy were the Debbie Downers, coming in more downbeat than expected. There is a sprinkling of housing data here in the US before the weekly inventory report. Oh, and then we have the small matter of the conclusion of the Federal Reserve's FOMC meeting. While no rate hike will be forthcoming, the subsequent statement following the conclusion of the meeting will be dissected with microscopic precision. While much speculation swirls around the return of higher Iranian crude exports to the market, it mustn't be overlooked that Iran holds the world's largest reserves of natural gas ahead of Russia, Qatar, Turkmenistan and the US. With the lifting of sanctions, Iran is exploring the possibility of reigniting (probably not the most appropriate word to use, but hey) its natural gas exports ambitions. While a timeline of two years seems somewhat over-ambitious, it doesn't seem unrealistic that it could boost LNG exports significantly by the end of the decade. While it is still lacking infrastructure, it does already have in place a network of international pipelines, as well as LNG facilities. It currently exports nearly 1 Bcf/d to Azerbaijan, Armenia and Turkey, and officials indicate it could export more than triple this volume to the EU in the longer term. Yesterday we took a look at oil in relation to Exxon's view to 2040 ; today let's take a peek at the natural gas side of the equation while we are on the topic. As mentioned yesterday, Exxon's long-term forecasts need to be taken with a pinch or two of salt as do all long-term forecasts; but the directional bias of the trends is useful to consider. Exxon sees Russia and the Caspian region extending their lead as the world's top natural gas exporter in the coming decades, rising to over 40 Bcf/d, while African natural gas exports are expected to double albeit from a low base.  North America's exports grow considerably, up to nearly 30 Bcf/d, as domestic unconventional production more than doubles. Europe continues to rely on imports although demand is forecast to remain relatively flat, while rising Asia Pacific demand outpaces unconventional production coming on line in the region. By 2040, Exxon projects that unconventional gas will account for about a third of total global natural gas production. This rise is overwhelmingly led by the US: Finally, according to the latest EIA data, coal's share of the generation mix dropped in November to a record low of 29%   while natural gas maintains its position as the dominant fuel for the fifth consecutive month. A combination of EPA rulings against the coal industry, as well as ultra-low natural gas prices, have pushed coal into unchartered territory.  http://everythingshale.com/news/2016/january/27/shaky-signs-seen-in-us-shale-oil-industry-while-future-looks-rosy-for-natural-gas/ http://everythingshale.com/news/2016/january/27/shaky-signs-seen-in-us-shale-oil-industry-while-future-looks-rosy-for-natural-gas/ Wed, 27 January 2016 08:57:43 http://everythingshale.com/news/2016/january/27/air-regulators-sue-socalgas-over-months-long-well-leak/ LOS ANGELES (AP) — Regional air regulators sued the Southern California Gas Co. on Tuesday, seeking penalties that could surpass $25 million for a monthslong natural gas leak that is blamed for sickening neighbors and has prompted a mass evacuation of a San Fernando Valley neighborhood. The South Coast Air Quality Management District sued the utility for creating a public nuisance. The lawsuit, filed in Los Angeles County Superior Court, further contends that as a result of their negligence, people were injured,†said Kurt Wiese, the agency's general counsel. The gas company does not comment on pending litigation, spokeswoman Kristine Lloyd said. The utility has been under intense criticism and regulatory scrutiny for a leak in an underground storage well at the huge Aliso Canyon storage facility. It was first reported on Oct. 23, and the gas company has said it may not be able to plug the leak until late next month. The utility announced Monday that a relief well designed to intercept the leaking one has now reached a depth of about 8,400 feet and is 200 feet from its target. The natural gas spewing into the air contains a smelly odorant as well as traces of toxic chemicals such as benzene. It has been blamed for ailments including nosebleeds, headaches and nausea in the nearby upscale suburban neighborhood of Porter Ranch. Last Saturday, a South Coast Air Quality Management District hearing board ordered the gas company to permanently close and seal the well. It also ordered the utility to pay for an independent health study for residents of the neighborhood and inspect all 115 wells at Aliso Canyon to help prevent future leaks. The lawsuit said the air quality management district has received more than 2,000 complaints of odor from people living or working near the facility since the leak began. The Los Angeles County Department of Public Health has said that benzene levels in 15 samples of air in the area were more than double normal levels but none exceeded state standards for acute exposure to benzene. Officials have said that they don't expect long-term health problems associated with the leak. About 3,700 households in and around Porter Ranch have temporarily moved out of their homes and around 2,400 more are awaiting relocation. Students from two local schools also have been temporarily relocated. The gas company could be liable for up to $250,000 in civil penalties for each day of the leak if the lawsuit ends with a determination that the utility knowing violated state law, failed to act quickly and caused great bodily injury to the public, Wiese said. That works out to about $25 million to date. http://everythingshale.com/news/2016/january/27/air-regulators-sue-socalgas-over-months-long-well-leak/ http://everythingshale.com/news/2016/january/27/air-regulators-sue-socalgas-over-months-long-well-leak/ Wed, 27 January 2016 08:57:31 http://everythingshale.com/news/2016/january/27/shell-investors-ok-acquisition-of-bg-group/ HOUSTON — Royal Dutch Shell shareholders on Wednesday authorized the $50 billion acquisition of British gas producer BG Group, after promises by executives to cut more overlapping costs amid falling oil prices . The value of the cash-and-stock deal has fallen from more than $70 billion last April, when oil prices hovered near $60 a barrel and Shell and BG Group shares traded higher. At a gathering in the Hague, 83 percent of Shell's investors voted in favor of the deal, and 17 percent voted against it. BG Group investors will vote on Thursday, and if they approve the deal, it will close on Feb. 15. Shell CEO Ben van Beurden said he was pleased by the confidence that shareholders have shown in the strategic logic of the combination of Shell and BG.†Shell will get access to BG Group's large gas production and deep-water drilling businesses, which will expand Shell's gas reserves by a quarter. But oil prices have fallen sharply since the merger was proposed. In response to critics of the deal, Shell executives have said in recent months they would shake loose an extra $1 billion in savings from the BG Group takeover and the two firms would cut an additional 2,800 employees and direct contractors once the transaction closed . That's on top of 7,500 job cuts Shell announced last year. http://everythingshale.com/news/2016/january/27/shell-investors-ok-acquisition-of-bg-group/ http://everythingshale.com/news/2016/january/27/shell-investors-ok-acquisition-of-bg-group/ Wed, 27 January 2016 07:38:33 http://everythingshale.com/news/2016/january/27/oil-s-drop-makes-it-cheaper-to-fill-up-in-houston-than-abu-dhabi/ Drivers in the U.S. oil hub of Houston can fill their tanks for less than the cost in Abu Dhabi and Dubai for the first time since 2008 as falling crude prices push Middle East exporters to cut government fuel subsidies. The price of the cheapest grade in the United Arab Emirates, of which Abu Dhabi is the capital, is 1.51 dirhams per liter ($1.55 a gallon) for January, according to the country's Ministry of Energy. That compares with $1.32 a gallon for the lowest regular fuel in Houston, data compiled by GasBuddy.com show. Houston drivers haven't paid less on average than Abu Dhabi pump prices since 2008, according to the data. Dubai is the second-largest emirate in the U.A.E. which has the same fuel prices nationwide. Benchmark Brent crude prices have dropped 16 percent this year after declining in each of the past three years. That's cutting pump prices for drivers across the U.S., while having the opposite effect in Persian Gulf countries, which supply about a fifth of the world's oil. Saudi Arabia, the U.A.E., Qatar, Oman and Bahrain have reduced or eliminated fuel subsidies over the past six months. The U.A.E. pumped 2.94 million barrels a day last month, according to data compiled by Bloomberg. Texas produced 3.5 million barrels a day in October, according to the latest available data from the U.S. Energy Information Administration. http://everythingshale.com/news/2016/january/27/oil-s-drop-makes-it-cheaper-to-fill-up-in-houston-than-abu-dhabi/ http://everythingshale.com/news/2016/january/27/oil-s-drop-makes-it-cheaper-to-fill-up-in-houston-than-abu-dhabi/ Wed, 27 January 2016 07:27:47 http://everythingshale.com/news/2016/january/27/murkowski-s-energy-bill-set-for-senate-debate/ Far-reaching legislation that could modernize the country's energy sector is set for debate in the U.S. Senate today. Dubbed the Energy Policy Modernization Act, the bill would do everything from give the federal government authority to order power companies to take tougher security measures against cyber attacks to expand the export of liquefied natural gas. The legislation was introduced last summer by Sen. Lisa Murkowski, R-Alaska, chairman of the Senate Committee on Energy and Natural Resources, and Sen. Maria Cantwell, D-Washington. It passed out of that committee by a vote of  18-4, with one objection, among others, coming from presidential hopeful Sen. Bernie Sanders, D-Vermont. Spanning topics as varied as the country's petroleum reserves and wildlife conservation on federal lands, the bill is already drawing attention within Washington over what amendments might be added once it gets to the senate floor. One potential target, outlined by Murkowski last week , could be President Obama's decision earlier this month to put a temporary moratorium on leasing federal land for coal mines. The administration is currently reviewing the revenues derived from domestic coal mining, along with public health impacts and other factors. http://everythingshale.com/news/2016/january/27/murkowski-s-energy-bill-set-for-senate-debate/ http://everythingshale.com/news/2016/january/27/murkowski-s-energy-bill-set-for-senate-debate/ Wed, 27 January 2016 07:00:53 http://everythingshale.com/news/2016/january/26/california-s-contrarian-gasoline-market-reverses-trend-again-for-2016/ The US West Coast market is strange. Disconnected from the rest of the US, it’s a bit of a red-headed stepchild, especially for gasoline. While the Gulf Coast can send refined products up to the Midwest or Atlantic Coast via pipeline, creating natural, obvious arbitrages, no infrastructure extends westward past the Rocky Mountains. This isolation (and strict environmental mandates in California) makes the West Coast one of the most volatile gasoline markets in the world. That unpredictability was exasperated in February 2015, when ExxonMobil was forced to shut the gasoline-producing fluid catalytic cracker at its 149,500 b/d Torrance refinery after an explosion. From the time the explosion occurred through the end of August, the differential for Los Angeles CARBOB gasoline saw a day-on-day price change of at least 10 cents/gal 43 times. During the same period in 2014, the price moved at least 10 cents/gal just five times. The summer is always a busy time for gasoline markets, but that period in 2015 was a different kind of beast for the West Coast. High demand, inconsistent imports and refinery outages created even bigger daily moves than even the most experienced traders were accustomed to seeing. So, naturally, West Coast gasoline differentials have done nothing but fall since the start of 2016. CARBOB’s day-on-day change has averaged around 6 cents/gal over futures since January 1, but most of that has been trending lower instead of dropping one day and jumping the next. While the Torrance refinery hasn’t fixed its FCC issues (if or when it does, there’s an agreement in place for PBF to buy the plant) other refineries along the West Coast have ended planned and unplanned turnarounds, boosting production and pushing gasoline inventories to an 11-month high. Furthermore, trading has been very illiquid lately relative to normal patterns, with summer-grade specifications set to take place in mid-February. http://everythingshale.com/news/2016/january/26/california-s-contrarian-gasoline-market-reverses-trend-again-for-2016/ http://everythingshale.com/news/2016/january/26/california-s-contrarian-gasoline-market-reverses-trend-again-for-2016/ Tue, 26 January 2016 23:01:23 http://everythingshale.com/news/2016/january/26/economist-says-texas-oil-drillers-may-have-unlocked-crude-supply-lasting-decades-into-the-future/ Texas has lost at least 60,000 upstream oil and gas jobs, plus as many as 250,000 supply chain and retail jobs indirectly, as a result of the oil crash, according to an analyst with one of the top industry trade groups in the state. Karr Ingham, a petroleum economist who compiles the semi-annual Texas Petro Index for the Texas Alliance of Energy Producers, also doesn't expect those losses to stall in 2016. The TPI's estimate of 250,000 job losses in Texas is devised from a multiplier tying upstream oil and gas job cuts to jobs elsewhere in the economy. Ingham said he believes four or five indirect jobs are lost for every upstream job in the state. Other economists put that estimate at six to seven indirect jobs, raising by hundreds of thousands the state's potential job losses. But Ingham noted that growth in petrochemical and construction jobs along the Gulf Coast may have helped offset cuts in upstream. Despite massive cutbacks in the oil field, Texas likely broke the state's 43-year-old record for crude oil production with an estimated 1.267 billion barrels in 2015, Ingham said Tuesday at the Petroleum Club in downtown Houston. If we don't hit [that record], we're going to get awfully close to it,†he said. Ingham said he is a little worried†that Texas producers have unlocked so much oil supply that prices could stay depressed for years, as has happened with natural gas prices. The industry has cracked open an energy supply of crude oil and natural gas literally for decades into the future,†he said. The state's crude oil production peaked in March, reaching 3.6 million barrels per day according to the U.S. Energy Information Administration. But production has remained stubbornly high  — despite a massive drawdown that has seen hundreds of rigs sidelined in Texas oil fields  — because many wells were already drilled and completed. We're now on the course of sustained production decline in Texas,†Ingham said. But it's not like it just falls off a cliff.†Texas dropped from more than 306,000 direct upstream oil and gas jobs down to little more than 246,000 jobs by the end of the year, with more job reductions announced in January . The last time oil prices hovered near $30 a barrel was in 2003, when Texas had only about 130,000 oil and gas jobs total; Ingham didn't project job losses to extend that far, but he said a lot more should be expected unless oil prices rebound. If prices were to not recover quickly and not rise much higher than they are now for some period of time, then the outlook in terms of overall activity levels and employment, in particular, is fairly dire,†Ingham said. That's not an industry that needs as many jobs on the payroll as it has right now.†Some projections have oil prices climbing in the second half of 2016, but many predictions for the latter half of 2015 promised a similar rise. They missed it by a country freakin' mile,†Ingham said.      http://everythingshale.com/news/2016/january/26/economist-says-texas-oil-drillers-may-have-unlocked-crude-supply-lasting-decades-into-the-future/ http://everythingshale.com/news/2016/january/26/economist-says-texas-oil-drillers-may-have-unlocked-crude-supply-lasting-decades-into-the-future/ Tue, 26 January 2016 17:40:33 http://everythingshale.com/news/2016/january/26/new-german-study-finds-fracking-doesn-t-contaminate-water/ A new study released this week by geologists at the Federal Institute for Geosciences and Natural Resources (BGR), found that developing Germany’s shale gas and oil resources through hydraulic fracturing would not pose a threat to drinking water resources. While the study itself is currently only available in German, a Reuters report summarized its findings and quoted Stefan Ladage, the lead author of the study, who explained, “We found that the injected fluids did not move upwards into layers carrying drinking water,” Ladage also said that hydraulic fracturing could help Germany ramp up its domestic development of natural gas: “Gas production from domestic resources has been falling for 10 years. Using shale gas resources in Germany primarily bears the potential of mitigating part of the ongoing decline.” Of course, the primary conclusion reached by the BGR geologists – that fracking does not pose a credible threat to water — echoes the findings of several recent reports published here in the states. Most notably, last year the U.S. Environmental Protection Agency (EPA) concluded, after a five-year comprehensive study , the hydraulic fracturing has not “led to widespread, systemic impacts on drinking water resources in the United States.” Another example is Stanford University’s 2015 study , “ The Depths of Hydraulic Fracturing and Accompanying Water Use Across the United States ”. In the study, researchers also found no evidence of fracking fluids migrating up into drinking water aquifers. As the study’s press release states : “Using innovative techniques such as isotopic ‘tracer’ compounds that distinguish the source of chemicals in well water, Jackson has not found evidence that frack water contaminants seep upward to drinking-water aquifers from deep underground.” A recent study from California Council on Science & Technology came to the same conclusion when studying wells in the state. As the report states: “We found no documented instances of hydraulic fracturing or acid stimulations directly causing groundwater contamination in California.” These are just a few in a long list of studies to reach that conclusion. So, whether it’s the United States or Germany (or any other country, for that matter) the science on fracking and groundwater couldn’t be clearer. http://everythingshale.com/news/2016/january/26/new-german-study-finds-fracking-doesn-t-contaminate-water/ http://everythingshale.com/news/2016/january/26/new-german-study-finds-fracking-doesn-t-contaminate-water/ Tue, 26 January 2016 17:06:31 http://everythingshale.com/news/2016/january/26/noble-cuts-dividend-pares-back-spending-budget/ Houston oil producer Noble Energy slashed its quarterly dividend, becoming the latest energy company to pare back its regular cash payments to shareholders amid industry-wide cost-cutting . The exploration and production company lowered the quarterly payment to 10 cents per common share, a reduction of 8 cents, or more than 40 percent. Noble said the move would cut costs in an effort to ride out the worst oil bust in decades. Noble will also trim its capital program to about $1.5 billion, or half last year's spending level, joining other oil producers in cutting spending for 2016. But Noble added that the plan will be flexible to deal with continued volatility in oil markets. The decision to adjust the quarterly dividend, along with a substantially reduced and flexible capital program for 2016, is part of a comprehensive effort to spend within cash flow and manage the company's balance sheet,†Kenneth Fisher, executive vice president and chief financial officer, said in a statement. Despite the lower investment, Noble still expects to produce 390,000 barrels of oil equivalent per day, about the same output as last year. The company will discuss its spending plans further during a conference call with investors Feb. 17 to discuss its fourth quarter financial performance. Noble said it plans to use the dividend reduction, coupled with its recent debt refinancing, to generate $200 million a year to be used in an effort to reduce the company's financial leverage. The company says it remains committed to paying a dividend, adding that its board of directors will reevaluate the payments every quarter. http://everythingshale.com/news/2016/january/26/noble-cuts-dividend-pares-back-spending-budget/ http://everythingshale.com/news/2016/january/26/noble-cuts-dividend-pares-back-spending-budget/ Tue, 26 January 2016 16:46:05 http://everythingshale.com/news/2016/january/26/ban-fracking-activists-call-for-elimination-of-oil-and-gas-conservation-commission-in-latest-temper-tantrum/ Activists accused the industry of being “selfish, greedy and sociopathic” as noted by media Activists addressing a state oil and gas rulemaking hearing this week levied a barrage of accusations and insults toward state officials and even renewed calls to eliminate Colorado’s state agency responsible for regulating oil and gas development. Speaking at the Colorado Oil and Gas Conservation Commission (COGCC) hearing, Lauren Swain, representing national climate activist group 350.org, largely ignored the fact that the rulemaking was supposed to be the focus of the hearing and instead used her time to complain about the agency. From Swain’s testimony : “With this new proposed rule, the COGCC has proven once again that it can no longer be considered a legitimate state agency because the COGCC continues to facilitate the pace of hazardous polluting oil and gas drilling and fracking operations near homes and schools subjecting communities to the risks of toxic emissions, spills and explosions.” But Swain took her testimony even farther by lobbying for disbanding the agency in favor of creating a new agency that would “swiftly” transition the state to 100 percent renewables using the Solutions Project at Stanford as a guide. From Swain : “The COGCC must be replaced with one or more agencies charged with one, facilitating to protect Coloradans from the harmful impact of oil and gas production and two, to aid and foster Colorado’s swift transition to one hundred percent renewable energy production and consumption using the Solutions Project developed at Stanford University as a guide.” Up next was testimony from an activist who has previously accused the oil and gas industry of having a “personality disorder” and of being “socially deviant.” This time, Amanda Harper called oil and gas producers a “short sighted, selfish and sociopathic industry.” It’s worth noting that Swain and 350 Colorado are closely affiliated with another activist organization, Coloradans Resisting Extreme Energy Development (CREED), which is seeking to put a slate of proposals before voters to ban oil and gas development. In fact, the measures backed by Swain and CREED are so extreme that the Greeley Tribune editorial board recently characterized their anti-fracking ballot push to the actions of a toddler. While acknowledging the frustration some feel with the process, the Greeley Tribune editorial board says that is “no excuse” for CREED’s approach: “However, that’s no excuse for the recent temper tantrum displayed by the Boulder-based Coloradans Resisting Extreme Energy Development.” The editorial goes on: “[I]f we sound like a parent here, well, it’s because it’s hard not to look at the Boulder group as a toddler throwing itself on the floor, kicking and screaming in the hopes it will get its way.” And with Harper and Swain’s appearance before the COGCC being the latest example of what the Greeley Tribune calls a “temper tantrum,” it seems clear that these groups are far more interested in grandstanding than actually engaging in the public policy process in a meaningful way. http://everythingshale.com/news/2016/january/26/ban-fracking-activists-call-for-elimination-of-oil-and-gas-conservation-commission-in-latest-temper-tantrum/ http://everythingshale.com/news/2016/january/26/ban-fracking-activists-call-for-elimination-of-oil-and-gas-conservation-commission-in-latest-temper-tantrum/ Tue, 26 January 2016 16:17:44 http://everythingshale.com/news/2016/january/26/keane-group-buys-trican-s-us-business-for-250-million/ Keane Group is buying the U.S. unit of a Canadian oil field services firm, the Houston company said Tuesday, seeking to grow even as the oil crash hammers the drilling industry. Keane's CEO and chairman, James Stewart, said the small oil field company will more than double in size through the deal to acquire the pressure pumping business of Calgary-based Trican Well Services. Keane will also look for additional future acquisitions, Stewart said. The two companies revealed that they were in advanced negotiations in mid-January .  Keane will pay $200 million in cash and give Trican a 10 percent stake in the shares of privately held Keane Group Holdings in the deal valued at$247 million. The companies expect to close by mid-March. Stewart said Keane has a strong balance sheet and is well positioned to survive in a world of lower for longer†oil prices for at least two more years before the industry rebounds. The Trican deal will double Keane's employee count from 550 to 1,100, including 100 workers in Houston. Stewart said Keane will more than triple its hydraulic fracturing, or fracking, capacity from 300,000 horsepower to more than 950,000 horsepower available for dispatch. Keane will grow from seven to 25 hydraulic fracturing teams. We've been a small, well-capitalized completion services company,†Stewart said. And now is a good time to consolidate. We're in a unique position … to potentially roll up more companies.†Although much of the focus is on Houston-based Halliburton buying Baker Hughes and Schlumberger acquiring Cameron International, Stewart said it is inevitable the sector will see lots of consolidation apart from just the biggest companies with oil priced from $30-$40 a barrel. New York-based Cerberus Capital Management bought Pennsylvania-based Keane in 2011 and moved the headquarters to Houston. As such, Keane' strongest position is in the Marcellus shale in the Pennsylvania area. But Keane also has grown in Texas' Permian Basin and North Dakota's Bakken shale. The Trican deal will open up opportunities for Keane in the Eagle Ford Shale in South Texas and parts of Oklahoma and Kansas, while further strengthening Keane in the Permian Basin in West Texas and the Bakken Shale in North Dakota. As the market rebounds, we'll be well positioned,†Stewart said, especially noting all the untapped potential†still remaining in the Permian. Stewart declined comment when asked whether there are plans to take Keane public. In a previous note, Houston-based Tudor, Pickering, Holt & Co. said the deal could be a win-win†with Trican retrenching back to its core Canadian pressure pumping market, and Keane catapulting into the land of U.S. pressure pumping big boys.†As for Trican, CEO Dale Dusterhoft said in a prepared statement that the proceeds will largely go toward debt reduction. The retained equity interest and additional economic interests in Keane provide Trican with upside leverage to a recovery in the U.S. pressure pumping sector and alignment with Keane's high quality, proven management team and platform,â€Â Dusterhoft added. Trican bought Denton-based Liberty Pressure Pumping for $256 million in 2007 and then moved the business to Houston. Just like all other services companies, Trican was hit by the oil slump and eliminated nearly 140 Odessa-based jobs last year.  http://everythingshale.com/news/2016/january/26/keane-group-buys-trican-s-us-business-for-250-million/ http://everythingshale.com/news/2016/january/26/keane-group-buys-trican-s-us-business-for-250-million/ Tue, 26 January 2016 16:01:36 http://everythingshale.com/news/2016/january/26/us-department-of-energy-and-new-mexico-finalize-74m-in-settlement-agreements-for-nuclear-waste-incidents-of-2014/ Washington, DC — Today, the New Mexico Environment Department, the U.S. Department of Energy (DOE) and its contractors signed two settlement agreements to resolve the State of New Mexico Environment Department's claims against DOE and its contractors related to the February 2014 incidents at the Waste Isolation Pilot Plant (WIPP) in Carlsbad and the associated activities at Los Alamos National Laboratory (LANL) . Under the agreements, which provide funding and scheduling parameters for a set of Supplemental Environmental Projects (SEPs) in both the Carlsbad and Los Alamos communities, New Mexico's roads, water infrastructure, and emergency response infrastructure will receive critical improvements. The finalized settlement agreements are based on the State of New Mexico's and DOE's General Principles of Agreement signed by the parties on April 30, 2015 . LANL and WIPP are critical assets to our nation's security, our state's economy, and the communities in which they operate,†said New Mexico Governor Susana Martinez. The funds New Mexico will receive through this agreement will help ensure the future safety and success of these facilities, the people who work at them, and their local communities. We look forward to continuing to work with the federal government to ensure the safety and success of both LANL and WIPP.†We are pleased to resolve the Administrative Compliance Orders so that we can continue to focus full attention on resuming and improving our waste management operations at the Waste Isolation Pilot Plant,†said U.S. Secretary of Energy Ernest Moniz. The projects we are funding as part of this settlement are important investments in the health and safety of New Mexicans who work at or live nearby DOE facilities, and will enhance our operations.†These projects, estimated at a total value of $74 million, include approximately: $34 million to help the N.M. Department of Transportation to make necessary repairs to New Mexico roads used for the transportation of transuranic waste to WIPP in the southeastern portion of New Mexico. The first project is to repair the WIPP North Access Road, an approximately 13-mile stretch of road between Highway 62-180 and the WIPP site. $4 million to fund the construction of and equipment for an offsite emergency operations center near WIPP to be operated by DOE. $1 million to fund enhanced training and capabilities for local emergency responders, in and around Carlsbad, NM, including funding for training and exercises with local mine rescue teams. Up to $12 million to improve DOE-owned transportation routes at LANL used to ship transuranic waste to WIPP. $10 million to replace aging potable water lines and install metering equipment for LANL potable water systems. $7.5 million to design and install engineering structures in canyons in and around LANL to slow storm water flow and decrease sediment load to improve water quality. $2.5 million to fund increased sampling and monitoring capabilities for storm water runoff in and around LANL, with the results of the sampling and monitoring to be shared with the public and NMED. $3 million for agreements to conduct external triennial compliance reviews of environmental regulatory compliance and operations at WIPP and LANL. The agreements further require that DOE and its contractors implement the necessary corrective actions at both facilities in order to ensure safe and sustainable continued operations to resolve the State of New Mexico Environment Department's Administrative Compliance Orders issued in December of 2014, which totaled $54.3 million in civil penalties. The agreement signed by NMED, DOE, Los Alamos National Security and Nuclear Waste Partnership was signed and executed today and is available at: LANL Settlement Agreement WIPP Settlement Agreement http://everythingshale.com/news/2016/january/26/us-department-of-energy-and-new-mexico-finalize-74m-in-settlement-agreements-for-nuclear-waste-incidents-of-2014/ http://everythingshale.com/news/2016/january/26/us-department-of-energy-and-new-mexico-finalize-74m-in-settlement-agreements-for-nuclear-waste-incidents-of-2014/ Tue, 26 January 2016 16:00:07 http://everythingshale.com/news/2016/january/26/epa-extends-deadline-on-air-pollution-data/ The U.S. Environmental Protection Agency has extended the deadline for oil and gas companies to turn over data  on the emission of cancer-causing air pollution from their drilling, pipeline and storage operations. Companies had until today to submit that information. But earlier this month, both the Texas Pipeline Association and the American Petroleum Institute complained to the agency that because of holidays and other EPA requests for information they did not have time to comply. The EPA has now extended the deadline until March 11. The agency is currently studying emission levels of what it terms hazardous air pollutants,†a category that includes 187 compounds including benzene, a chemical found in gasoline. http://everythingshale.com/news/2016/january/26/epa-extends-deadline-on-air-pollution-data/ http://everythingshale.com/news/2016/january/26/epa-extends-deadline-on-air-pollution-data/ Tue, 26 January 2016 15:39:11 http://everythingshale.com/news/2016/january/26/paul-hastings-appoints-new-houston-oil-and-gas-boss/ Paul Hastings announced Tuesday that Rick Burleson will head its oil and gas practice group out of its Houston office. Burleson Burleson's move comes less than a month after he closed his own law firm, Burleson LLP. The firm closed on Dec. 31, a move that Burleson said was necessary after falling crude oil prices made it difficult to sustain the practice that focused on energy-related real estate transactions. It's the perfect move for me,†said Burleson, who said he received several competing offers before opting to join Paul Hastings. The position is a new one Paul Hastings, he said, which already has a robust oil and gas practice. Burleson said that he will be the 29th lawyer in Paul Hastings' office in Houston. Rick is a major player in the energy industry, one of the most experienced oil and gas lawyers in this market and we could not be more pleased that he's starting the next phase of his career at Paul Hastings,†said Greg Nelson, chair of the Houston office. Burleson, who founded his firm a decade ago, announced in November that it would be closing its doors. It had as many as 140 lawyers about three years ago but by November, it was down to 60, including 17 in Houston. Besides its office in Houston, the firm had offices in San Antonio, Denver, New Orleans, Pittsburgh and Midland. Burleson said he was pleased to report that most of his former lawyers have found new legal homes. Some have gone on to launch their own firms while other groups joined existing practices, he said. http://everythingshale.com/news/2016/january/26/paul-hastings-appoints-new-houston-oil-and-gas-boss/ http://everythingshale.com/news/2016/january/26/paul-hastings-appoints-new-houston-oil-and-gas-boss/ Tue, 26 January 2016 15:33:01 http://everythingshale.com/news/2016/january/26/canada-s-pipeline-regulators-can-t-keep-up-with-companies-audit-finds/ HOUSTON — Canada's pipeline regulators need to do more to keep up with the pipeline approval process and the day-to-day of managing existing lines, according to a government audit submitted to the nation's parliament Tuesday. The report, conducted by the Office of the Auditor General of Canada, outlined problems at pipeline regulator the National Energy Board such as outdated technology and inconsistent steps to verify compliance by companies. The National Energy Board referees Canada's pipeline approval process and oversees operating infrastructure. The Board has come under fire recently as it grapples with about $18 billion in new proposed, controversial pipelines carrying oil sands crude. Several of the largest proposed pipelines have ties to Houston, such as Kinder Morgan's expansion to the Alberta-to-British Columbia Trans Mountain pipeline. Our audit concluded that the NEB did not adequately track company implementation of pipeline approval conditions, and that it was not consistently following up on company deficiencies,†said Julie Gelfand , Canada's Federal Commissioner of the Environment and Sustainable Development, in a video statement released with the audit. We found that the board's tracking systems were outdated and inefficient.†The conclusion comes after a flood of criticism from local activists and provincial government about the National Energy Board's pipeline approval process. Opponents of the pipelines have argued that regulators have ignored their concerns or aren't capable of ensuring the lines are built responsibly. Much of the conflict has centered around Kinder Morgan's Trans Mountain pipeline and TransCanada's Alberta-to-Quebec Energy East pipeline, both of which are still being reviewed by the Board. Justin Trudeau, Canada's recently elected prime minister, has said the National Energy Board's approval process is due for an overhaul. But with few details currently available on what that may entail, pipeline companies working their way through the current process have been left on shaky ground. Under the current schedule, the National Energy Board is due to make a final recommendation on Kinder Morgan's Trans Mountain expansion by May 20. Tuesday's audit concluded that the National Energy Board wasn't tracking whether companies had satisfied conditions set for approval of their pipelines. Auditors examined a sample of 49 cases and found inaccurate tracking, key files missing or incomplete analysis in 25 cases. Auditors also called the Board's information management tools outdated and inefficient. In one example, auditors said the list of pipeline approvals provided by the Board was missing recently approved lines. Information problems also included incomplete public access to companies' compliance records and an emergency management plan that needs consolidation. Finally, the audit noted that the Board was having a hard time recruiting and retaining skilled staff. Attrition rates have risen as high as 29 percent in between 2007 and 2008, the report noted. http://everythingshale.com/news/2016/january/26/canada-s-pipeline-regulators-can-t-keep-up-with-companies-audit-finds/ http://everythingshale.com/news/2016/january/26/canada-s-pipeline-regulators-can-t-keep-up-with-companies-audit-finds/ Tue, 26 January 2016 15:20:21 http://everythingshale.com/news/2016/january/26/banks-cut-oil-price-forecasts-on-demand-concerns/ HOUSTON — U.S. crude climbed nearly 4 percent Tuesday on speculation that big oil exporters may eventually agree to ease production. But even as markets regained ground, major banks made big cuts to their annual oil-price forecasts and warned crude could sink further. The World Bank Group said it believes crude prices will average $37 a barrel in 2016, pointing to slowing demand in developing nations, the imminent return of Iranian oil exports and more efficient U.S. shale drilling. Those could prolong the downturn and could keep a recovery small compared to past oil routs in 2008, 1998 and 1986. The international lender's forecast is 27 percent lower than its projection in October. Low prices for oil and commodities are likely to be with us for some time,†said John Baffes, senior economist at the World Bank. While we see some prospect for commodity prices to rise slightly over the next two years, significant downside risks remain.†The Washington D.C.-based World Bank lowered its expectations for 80 percent of the commodities it tracks amid signs of slowing growth in emerging economies. Fast-growing developing nations like China and India have bolstered price of oil and other commodities for more than a decade and a half but have recently declined. The World Bank expects developing nations this year will grow 4 percent, significantly below historical averages,†and somewhat lower than the lender's previous 4.6 percent forecast. It noted the economies of China, Brazil, Russia and South Africa all slowed in 2015, buffeted by sluggish international trade, volatility in financial markets and cheap crude. Downside risks still dominate this fragile global environment,†the World Bank said. Many of the factors underpinning the slowdown in recent years … are expected to persist.†Meanwhile, Credit Suisse said if oil demand growth comes in lower and crude stockpiles keep rising, the domestic oil price could average $30 a barrel in the first quarter and $38 a barrel for the whole year. That's 33 percent lower than its original assumption. The bottom is not yet in,†Credit Suisse said in a client note Tuesday. U.S. crude rose $1.11 to $31.45 a barrel on the New York Mercantile Exchange, gaining some ground lost on Monday. Credit Suisse said an economic slowdown in China and higher production from big oil-exporting nations in 2016 could stall a major oil-price recovery and keep U.S. crude around $54 a barrel next year. Oil markets have become acutely concerned that a global recession, triggered by a ‘hard-landing' in China, will remove oil demand growth, which has been the one solid, fundamental prop so far in this cycle,†Credit Suisse said. Still, the Swiss bank believes prices will return eventually to ranges friendly to U.S. shale drilling as the world's oversupply becomes a supply deficit. Credit Suisse believes the call on U.S. oil production will drop by 590,000 barrels a day this year as inventories continue to swell. But the market could signal it needs  860,000 barrels a day of domestic crude next year, and 1.58 million barrels a day in 2018. At those levels, prices and domestic drilling activity could start to recover, Credit Suisse said. http://everythingshale.com/news/2016/january/26/banks-cut-oil-price-forecasts-on-demand-concerns/ http://everythingshale.com/news/2016/january/26/banks-cut-oil-price-forecasts-on-demand-concerns/ Tue, 26 January 2016 14:56:55 http://everythingshale.com/news/2016/january/26/a-look-at-our-energy-tomorrow/ A couple of the big-picture projections in ExxonMobil's annual global energy outlook : The world's energy needs will grow 25 percent between now until 2040, with oil, natural gas and coal continuing to meet 80 percent of that demand. Now, read what the energy company says about the future of natural gas: The biggest expected growth will be in natural gas, which provides a practical energy solution for many applications while also providing a significant cost advantage versus other options to help reduce climate change risks. This basically describes the U.S. Model†we've been talking about for a number of weeks . It's a model that includes increased natural gas and oil production lifting our economy and benefiting American consumers that also leads to significant climate progress. This model isn't energy theory. It's the current U.S. energy reality. Thanks to the American energy revolution, the U.S. is the world's leading producer of oil and natural gas . The revolution is helping U.S. consumers in the form of lower energy costs , and it is strengthening American security by lowering oil imports. As for climate, increased use of natural gas is a chief reason the U.S. is leading the world in reducing energy-related carbon emissions . It's a proven model, one that can continue to work in the years ahead. ExxonMobil sees the world shifting to cleaner fuels for its electricity out to 2040: Natural gas leads the way with nuclear, wind and solar gaining share and coal declining (from 40 percent in 2014 to 30 percent in 2040). The world will need all economic energy sources†going forward, ExxonMobil says. More: We can expect that new technologies will continue to create new energy options for our growing world. We don't know yet what all those technologies will be, but history tells us that the best ones will be affordable, available on a commercial scale, and not overly reliant on government support. Enabling these technologies will require policies that promote innovation, investments and free trade. Natural gas is affordable, reliable and clean-burning. Safe hydraulic fracturing and horizontal drilling have made it abundant. The natural gas approach is market-driven, which is why the U.S. Model works so well to advance climate objectives that some think require government command-and-control solutions. Not so. Check out this chart from ExxonMobil's forecast, comparing carbon dioxide emissions reductions in the U.S. and Germany: As ExxonMobil's report notes, the two countries show how different paths can reduce CO2 emissions from power generation. The U.S. has shifted to natural gas use with much smaller growth in wind and solar. Germany targeted rising use of wind and solar and phased out nuclear power. Both countries' power sectors cut CO2 intensity, but the United States dropped about three and a half times as much as Germany from 2005 to 2012. API President and CEO Jack Gerard, from his speech last week at the U.S. Energy Association's State of the Energy Industry forum : The U.S. Model recognizes that market forces, driven by consumer preferences, are far better able to achieve our nation's energy, climate and economic goals than government mandates and regulatory dictates. … [T]o sustain and build on our nation's positive energy trajectory our energy policies should foster or at least not hinder America's ability to explore, develop, transport and deliver to consumers the energy they need to heat their homes, run their businesses and enjoy their lives.†The U.S. Model is working and will continue to work with policies that foster access to energy reserves for safe and responsible development, fair and efficient leasing and permitting policies on federal lands and a common-sense approach to regulation that doesn't pile on unnecessary layers of federal regulation that could chill energy investment. The Bureau of Land Management's new methane emissions regulations announced last week fall into that regulatory category . The proposed rules seem to overlook the fact that since 2005 methane emissions from hydraulically fractured natural gas wells have fallen 79 percent,  according to EPA , at the same time natural gas production has increased. Instead supporting the working U.S. Model, unnecessary regulation like this likely will make domestic energy production more difficult and more costly for consumers. Erik Milito, API upstream and industry operations director : Another duplicative rule at a time when methane emissions are falling and on top of an onslaught of other new BLM and EPA regulations could drive more energy production off federal lands. That means less federal revenue, fewer jobs, higher costs for consumers, and less energy security. The goal is to prevent emissions, not impede U.S. energy production.â€Â  By Mark Green Originally posted January 25 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/january/26/a-look-at-our-energy-tomorrow/ http://everythingshale.com/news/2016/january/26/a-look-at-our-energy-tomorrow/ Tue, 26 January 2016 13:00:50 http://everythingshale.com/news/2016/january/26/estimated-ultimate-recovery-eur-finding-minimum-data-requirements/ On my first day at Drillinginfo, I was greeted by a smiling Mark Nibbelink. “You must be the mystery man I’ve heard so much about,” he said with a calm demeanor. A month prior Mark reached out to my advising professor, Dr. Larry Lake, and requested candidates for a database analysis project. The Drillinginfo staff sought to determine the minimum amount of wells needed to predict estimated ultimate recovery (EUR) baskets for acreage grades within a play, specifically the Eagle Ford. Acreage grades measure an area of land’s potential production and are determined using a statistical model that also takes engineering parameters into consideration (azimuth, lateral length, etc). When solving any problem, I constantly ask myself a universal set of questions: What do I know? What do I need to know? Which pertinent method(s) should I use? These prompts help streamline a bulky framework, permit a fluid approach, and ensure a thorough solution. WHAT DO I KNOW? The Eagle Ford Shale ranks among the most heavily invested plays in the world. Surprisingly, the Eagle Ford is mainly comprised of carbonate sediments rather than shales. With estimated proved reserves of 5,172 MMbbl and 23.7 Tcf, the Eagle Ford will remain relevant until hydrocarbons are no longer our primary energy source (EIA). The table below showcases data gathered from DI Desktop, DI Analytics, and DI Classic Unfortunately, the Texas Railroad Commission only requires operators to report liquid and gas production on a per lease basis, and does not require operators to report monthly produced water data. Drillinginfo estimates production rates for each well using a robust algorithm, however, we must make a mental note that some error is already present before we begin our analysis. The data’s interconnectivity presented a challenge. Each database possessed random instances of blank entries. Once I removed all extreme outliers (points outside of Q1-3*IQR and Q3+3*IQR) and ensured continuity, the dataset for analysis was reduced in size. (IQR=interquartile range) WHAT DO I NEED TO KNOW? Each play utilizes a unique grading methodology because no two plays exhibit identical characteristics. The most straightforward solution to the question posed would involve running the Eagle Ford’s grading algorithm numerous times for various sample sizes. After enough trials, the EUR grading bins would eventually converge at a certain sample size. I generated the box and whisker plots below to better understand the EUR distributions for each grade. These graphs are accompanied by a pie chart demonstrating the proportion of grades within the Eagle Ford. I applied association rule learning (ARL) to the data set in order to evaluate which variables best correlate with which grades. Despite the amount of overlap between grades (in other words, a particular EUR value could be present in more than one bin), a clear trend exists of increasing median, Q1, and Q3 values when moving to better quality grades. WHICH PERTINENT METHOD(S) SHOULD I USE? When a clever solution fails to present itself, sometimes brute force is the only way to go. In this instance, the brute force method was an algorithm to calculate the average median and IQR error values for a certain sample size by simulating their random selection thousands of times. The median and IQR error values yielded a normal distribution due to the large amount of repetitions. The plots below demonstrate how average error values change with an increasing sample size. At a sample size of about 175, the average relative median error for grades A-C are roughly 10 percent, while the average relative IQR error values are about 20 percent. In my opinion, this is the best trade off between sample size and error. We are investigating whether these results can be used to provide uncertainty limits on reserve estimations, as well as defining techniques which operators can use to know, at the earliest possible time, when they can reasonably begin to predict well EURs and therefore acreage grade assignments. http://everythingshale.com/news/2016/january/26/estimated-ultimate-recovery-eur-finding-minimum-data-requirements/ http://everythingshale.com/news/2016/january/26/estimated-ultimate-recovery-eur-finding-minimum-data-requirements/ Tue, 26 January 2016 13:00:28 http://everythingshale.com/news/2016/january/26/energy-news-roundup-oil-weakens-stock-market-san-diego-s-renewable-dilemma-ny-mining-controversy/ Wall Street sold off on Monday, pulled lower by further weakness in oil prices as energy shares led declines, with major indexes retreating after last week’s strong gains. [ Reuters ] San Diego is the largest city in the country to commit to using only renewable energy over the next 20 years and now faces the decision of committing to community choice aggregation for its electricity generation. [ NPR ] The offices of the New York attorney general and inspector general have declined to open investigations into the 2013 constitutional amendment that allowed a private company, NYCO Minerals, to conduct open-pit mining on state land in the Adirondack Mountains. [ The NY Times ] http://everythingshale.com/news/2016/january/26/energy-news-roundup-oil-weakens-stock-market-san-diego-s-renewable-dilemma-ny-mining-controversy/ http://everythingshale.com/news/2016/january/26/energy-news-roundup-oil-weakens-stock-market-san-diego-s-renewable-dilemma-ny-mining-controversy/ Tue, 26 January 2016 12:00:51 http://everythingshale.com/news/2016/january/26/prominent-democrats-back-fracking-natural-gas-for-climate-and-energy-saving-benefits/ This week, former Maryland Governor and current Democratic presidential candidate, Martin O’Malley declared his support for hydraulic fracturing and natural gas. At an Iowa campaign stop, O’Malley described natural gas as a “bridge” fuel that can help promote renewable sources of energy like wind and solar. As the Des Moines Register explained , O’Malley said fracking “to harvest cleaner-burning natural gas should be allowed with strict regulations as part of a broader strategy to reduce reliance on other fossil fuels.” O’Malley’s comments are especially interesting considering that he is running on an environmental platform and has vowed to make climate change the priority of his campaign. As the Des Moines Register also noted , “The Democratic presidential hopeful and former Maryland governor has aggressively campaigned as a champion for the environment, promising to push the United States toward fully powering its electrical grid on renewable energy sources by 2050.” In 2014, O’Malley said Maryland was “ ready ” for fracking in the western part of his state. According to a report conducted by the O’Malley’s administration, estimated benefits from drilling and extraction in the region could “support as many as 3,400 jobs and generate millions in tax revenues.” Gov. O’Malley was not the only Democrat to tout the benefits of natural gas this week.  Well-known climate activist, U.S. Senator Sheldon Whitehouse (D-RI), recently announced his support for a 900 megawatt fossil fuel-fired power plant that will be constructed in Burrillville, Rhode Island. In an interview, Sen. Whitehouse said, “I don’t think that it’s valuable from a Rhode Island’s perspective to make Rhode Islanders pay higher gas prices when it doesn’t change the overall complexion of the gas market.” The $700 million natural gas-fired power plant – labeled the Clear River Energy Center – “would be the most efficient generator of electricity that burns fossil fuels in New England,” according to the Providence Journal . And, according to estimates done by a consultant hired by the plant’s owner Chicago-based Invenergy, total carbon emissions from New England’s power plants would be reduced by nine percent if the plant were active today. Governor O’Malley and Senator Whitehouse – Democrats who have both made climate change a top priority – offer important context, showing just how marginalized ban-fracking activists have become. http://everythingshale.com/news/2016/january/26/prominent-democrats-back-fracking-natural-gas-for-climate-and-energy-saving-benefits/ http://everythingshale.com/news/2016/january/26/prominent-democrats-back-fracking-natural-gas-for-climate-and-energy-saving-benefits/ Tue, 26 January 2016 09:51:35 http://everythingshale.com/news/2016/january/26/blm-tackles-waste-methane-pollution-on-federal-and-tribal-lands/ In an important step forward in curbing methane emissions from the nation's oil and gas sector, the Bureau of Land Management (BLM) today announced a regulatory proposal aimed at wasteful practices that shortchange taxpayers, squander energy resources and threaten the Earth's climate.  The proposal, which will apply to both new and existing oil and gas facilities, begins to fill an important gap left by the EPA in August when that agency proposed to reduce emissions only from future facilities, ignoring the millions of oil and gas emissions sources already in operation. Oil and gas companies that operate on our nation's federal and tribal lands are exploiting a resource that belongs to the public and the Native American tribes.  These operators should be held to the highest standards when it comes to avoiding the waste of the resource and minimizing the pollution from their activities. BLM is the federal agency in charge of managing these public and tribal resources.  But the agency's regulatory structure is woefully out-of-date and much too permissive of wasteful and inefficient practices. In 2013, operators leaked, vented and flared 109 billion cubic feet of gas from operations on federal and tribal lands, enough gas to heat 1.5 million homes for a year.  From an environmental perspective, these operators emitted 1 million metric tons of methane to the atmosphere, the same near-term climate impact as the pollution from 23 coal-fired power plants or 19 million automobiles. This wasted gas also means that companies are simply not paying millions of dollars in royalties rightly owed to U.S. taxpayers money that should be going to fund schools and roads and other needs in our communities instead of being pocketed by industry. Today, BLM announced that it is rising to the methane waste challenge by proposing a strong but feasible and cost-effective set of regulations to crack down on waste of the public's resource.  Following the path of leading states, such as Colorado and Wyoming, BLM has proposed requiring operators to improve the efficiency of both existing and future operations by: Prohibiting the harmful practice of venting gas to the atmosphere; reducing flaring by (1) placing a volumetric limit on the amount of gas an operator can flare and (2) requiring the submission of gas capture plans with all applications for permits to drill (APDs); conducting regular inspections of their wells and repairing leaks quickly; and requiring older, inefficient equipment, such as high-bleed pneumatic devices, to be replaced with more advanced low-bleed or no-bleed versions. BLM has also included some flexibility in its proposal so that states that have shown leadership by enacting their own strong regulations will be able to continue drive efforts to curb waste and pollution within their jurisdictions. Even though many leading companies are already implanting these practices, we fully expect the usual voices from the industry trade associations to proclaim that the sky is falling and that they should not be subjected to additional rules when the price of oil is so low.  But lagging prices can never be an excuse for ignoring environmental protection.  After all, we don't abide oil spills just because the price of the oil has fallen.  We shouldn't tolerate wasteful methane pollution, especially from operators exploiting the public's resources. Our staff will pore over the proposed rule in the coming days and weeks and deploy our technical, scientific and legal resources to ensure BLM adopts a strong and durable regulatory regime that protects taxpayers from waste and the planet from harmful methane emissions. By Dan Grossman Originally Published on January 22, 2015 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/january/26/blm-tackles-waste-methane-pollution-on-federal-and-tribal-lands/ http://everythingshale.com/news/2016/january/26/blm-tackles-waste-methane-pollution-on-federal-and-tribal-lands/ Tue, 26 January 2016 09:00:25 http://everythingshale.com/news/2016/january/25/despite-holding-steady-north-dakota-braces-for-oil-supply-crash/ When North Dakota oil production broke above 1 million b/d for the first time in April 2014, many expected that the 2 million b/d threshold would be breached in relatively short order. With WTI spot prices averaging over $100/b in the months that followed, some even speculated that 2 million b/d may be too modest of a goal for a state in the throes of a shale oil renaissance. But prices, and those expectations, have come crashing down. Now, rather than striving for 2 million b/d, state officials are hoping to maintain production above 1 million b/d. And there are indications that a significant drop in Bakken supply may already be underway. In November, less than 1.18 million b/d was produced, the state’s Department of Mineral Resources reported last week. Since December 2014, when North Dakota set an all-time production record of nearly 1.23 million b/d, statewide oil production has averaged just below 1.19 million b/d and has risen for two months in a row despite stagnant demand and plunging prices. While Lynn Helms, the state’s top oil regulator, called recent production numbers “quite a surprise” amidst market shifts largely unsupportive of domestic production, he indicated the relative success would be short lived. Blog post continues below… Request a free trial of: Oilgram News   Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more. While North Dakota supply has remained steady amid falling prices, it’s unclear what has happened since the end of November as prices began their steady dip below $40/b and, eventually, $30/b, a pricing environment where Helms believes the majority of Bakken producers cannot survive. “We cannot sustain production at sub-$30/b prices,” Helms told reporters following the release of the latest state supply data. Helms believes that WTI spot prices will need to average roughly $50/b in order for current production to be maintained. If prices return to the $30-$40/b range, production will likely stay above 1 million b/d, but will likely stay just above that level and will fall steadily, by about 10,000 b/d each month, if prices do not climb above $40/b in the near term, Helms said. There are indications that production may have already fallen off dramatically. The rig count, long seen as a supply bellwether, fell to 47 on Monday, its lowest level since August 2009, when it was 45 and clearly on the rise. A year ago, North Dakota had 157 active rigs and four years ago it had 204. Permitting has also declined substantially, dropping from 152 drilling permits in October to 125 in November and to 95 in December. The all-time high was 370 in October 2012. Helms, who pointed out that permitting was last below 100 in May 2010, pinned the decline on “decreasing optimism” in short-term oil prices. Prices have also impacted flows out of the Bakken. According to data released by the North Dakota Pipeline Authority last week, about 52% of Williston Basin oil, or roughly 645,000 b/d, was exported by pipeline in November while 41% was exported by rail. The data marks the first time since June 2012 that a higher percentage of oil was moved out of North Dakota by pipeline than rail. According to the data, 6% of Williston crude was refined at the state’s two refineries and about 1% of the crude was sent to Canadian pipelines by truck, both percentages that have held steady for years. Since 2012, the last time pipeline and rail traffic reached parity, the percentage of Williston crude shipped out by pipeline fell as low as 17% in April 2013, when total pipeline capacity was about 515,000 b/d, and 75% of oil was shipped by rail, when rail capacity was 1.15 million b/d. Pipeline’s share of total Williston transportation averaged about 23% in 2013, 31% in 2014 and 39% in 2015. The trend towards pipeline and away from rail is likely to continue amid current market fundamentals, according to Justin Kringstad, director of the North Dakota Pipeline Authority. “It will shift more and we will see even more barrels moving on pipelines,” Kringstad said Wednesday. The share has increased mainly due to the shrinking WTI-Brent spread, which has caused waterborne imports to become cheaper than railed Bakken crude for East Coast refiners. How dramatic and sustained that shift will be remains to be seen. And while it’s unclear where prices and, in turn, North Dakota production will ultimately wind up, the shift in fundamentals has altered the conversation. Now, instead of breaking through the 2 million b/d threshold, many are waiting for the 1 million b/d level to be fallen through. http://everythingshale.com/news/2016/january/25/despite-holding-steady-north-dakota-braces-for-oil-supply-crash/ http://everythingshale.com/news/2016/january/25/despite-holding-steady-north-dakota-braces-for-oil-supply-crash/ Mon, 25 January 2016 23:01:33 http://everythingshale.com/news/2016/january/25/a-statement-from-us-secretary-of-energy-ernest-moniz-on-new-leadership-at-lawrence-berkeley-national-laboratory/ The Department of Energy welcomes Dr. Michael Witherell as the new director of Lawrence Berkeley National Laboratory (LBNL). Mike's background includes key academic, research, and management roles as a leading particle physicist teaching at some of America's finest universities, former director of DOE's Fermi National Accelerator Laboratory, and Presidential Chair in Physics at UC Santa Barbara (UCSB).  These experiences will ensure that LBNL continues to advance solutions to pressing scientific and energy challenges under his leadership. We look forward to seeing the important innovations LBNL will produce under Mike's leadership to help realize America's low-carbon economy and advance scientific frontiers. I also thank outgoing LBNL Director, Dr. Paul Alvisatos, for his excellent service since 2009.  As director, Paul continued LBNL's legacy of advancing research and development for physical, life and computer sciences, renewable energy, and energy efficiency.  In addition, Paul was a leader in elevating the Department's strategic relationship with the National Laboratories and in their networked approach to scientific challenges.†http://everythingshale.com/news/2016/january/25/a-statement-from-us-secretary-of-energy-ernest-moniz-on-new-leadership-at-lawrence-berkeley-national-laboratory/ http://everythingshale.com/news/2016/january/25/a-statement-from-us-secretary-of-energy-ernest-moniz-on-new-leadership-at-lawrence-berkeley-national-laboratory/ Mon, 25 January 2016 16:00:36 http://everythingshale.com/news/2016/january/25/infographic-petroleum-products-and-you/ http://everythingshale.com/news/2016/january/25/infographic-petroleum-products-and-you/ http://everythingshale.com/news/2016/january/25/infographic-petroleum-products-and-you/ Mon, 25 January 2016 15:36:30 http://everythingshale.com/news/2016/january/25/the-case-for-prefabricated-data-centers-in-the-oil-and-gas-industry/ Some of the most inhospitable areas on the planet — scorching deserts, volatile war zones and remote and harsh regions — are often home to oil and gas exploration and production sites. Rugged environmental conditions, poor infrastructure, small populations of professional expertise and added transportation time and cost are among the most common challenges of these sites. Yet, these harsh conditions do not preclude oil and gas entities from having the same technology needs as those industries working under “normal” conditions. In fact, the needs can often be greater as new technologies and applications driving efficiency in exploration are also increasing requirements for information processing. And oilfield-based data centers need to be compliant to the highest industry standards in terms of resiliency. Many oil and gas production entities are now faced with an urgent need to modernize IT infrastructures to maximize performance and optimize operational levels. In this two-part blog series, I’ll explain how prefabricated data centers offer a unique solution to meet these growing (and industry-specific) needs. Solving Industry Issues While diverse use cases for new data centers in the oil and gas industry are plentiful, capital investments to build or upgrade these facilities have been primarily targeted at operational technologies such as automation and digitization. Paradoxically, this choice actually adds to the spend since relegating processing capabilities to far-flung data centers in a company’s more urban facility results in the need for large and expensive data connections via satellite. This move also increases risk of delays or downtime. Managers of these sites are sensibly now looking to build data centers on site to alleviate latency issues, reduce costs and avoid conflicting with data protection laws that increasingly require O&G majors to process data within the national borders of those countries where oilfields are located. All above constraints together with very high degrees of unpredictability, potential delays and budget overruns make traditional data center construction in oilfields not viable or efficient. This is where prefabricated data center modules come in, as they address many pitfalls of an industry that very much relies on the accurate and timely processing of E&P data. A prefabricated data center approach, where construction risk is shifted from the field on to a factory controlled environment, guarantees predictable performances, minimizes risk and speeds up time to market of data center operations. Prefabricated Specs These easy-to-transport and portable modules are containerized systems, built in a factory environment and transported to the remote location as a single structure. Individual modules provide power, cooling or IT space and can be built as all-in-one blocks that can be added and relocated over time as business demands evolve. They are pre-engineered, pre-assembled, integrated, pre-tested and meet International Organization for Standardization (ISO) standards for size and dimensions often used in oil and gas deployments. Compatibility issues from using multi-vendor components and the risks associated with on-site build—such as human error—are alleviated, resulting in a 60% faster deployment than traditional stick-built facilities. The flexibility of prefabricated data centers can ease the pains associated with traditional greenfield deployments and brownfield expansions, especially as your oil and gas business grows or consolidates based on the availability of natural resources. The use of prefabricated modules also simplifies management and maintenance, since the way they are built results in more predictable performance (and less risk). Being in the oil and gas business, you know how critical this can be, as personnel often work on rotation cycles and minutes of downtime can result in the loss of millions of dollars. What about the elements? The harsh environments I mentioned at the outset? Prefabricated architecture can provide protection. I’ll dig into the different scenarios in Part II The post The Case for Prefabricated Data Centers in the Oil and Gas Industry appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/january/25/the-case-for-prefabricated-data-centers-in-the-oil-and-gas-industry/ http://everythingshale.com/news/2016/january/25/the-case-for-prefabricated-data-centers-in-the-oil-and-gas-industry/ Mon, 25 January 2016 14:19:35 http://everythingshale.com/news/2016/january/25/eia-natural-gas-prices-could-rise-as-production-finally-slows/ A historic low in natural gas prices should ease over the next two years, according to a forecast released Monday by the U.S. Energy Information Administration . Following a December average of $1.93 for the Henry Hub benchmark, federal analysts predict gas prices will average $2.65 per MMBtu this year and $3.22 in 2017. Oil and gas drillers across the United States have struggled under collapsing commodity prices, driven in part by a boom in domestic shale drilling that has transformed the industry. But the U.S. gas surge is now beginning to taper off. This year U.S. production is only expected to grow by 0.6 percent compared to a 7 percent annual growth rate in 2015. And forecasters are expecting the demand for gas to increase. They pointed to high consumption by the U.S. power sector, as it shifts away from coal and towards gas and renewables. At the same time cheap natural gas had led to increased demand from the industrial sector, which uses the fuel to produce chemicals and fertilizer. Even with a rise over the next two years, natural gas prices are expected to remain historically cheap. Since 2005 the Henry Hub benchmark has averaged $5.18 per MMBtu . The recent price shock comes during a shift in U.S. energy policy. The government has authorized the export of liquefied natural gas, with the first facility, Cheniere Energy's Sabine Pass terminal on the Louisiana Gulf Coast, expected to begin operation this year. Also, the flow of gas through pipelines connecting U.S. fields to Mexico is increasing rapidly. In October more than 98 billion cubic feet of gas was exported to Mexico , a four-fold increase from the same period in 2010. In its report Monday, EIA predicted by the summer of 2017 the United States would be a net exporter of natural gas. That has not happened since 1955. http://everythingshale.com/news/2016/january/25/eia-natural-gas-prices-could-rise-as-production-finally-slows/ http://everythingshale.com/news/2016/january/25/eia-natural-gas-prices-could-rise-as-production-finally-slows/ Mon, 25 January 2016 13:31:17 http://everythingshale.com/news/2016/january/25/energy-news-roundup-scotus-uphold-energy-efficiency-law-exxon-s-bold-forecast-risk-of-pipeline-to-tribal-groups/ In a win for the Obama administration and environmental groups, the Supreme Court on Monday upheld a 5-year-old federal program that pays large electric customers to save energy during times of peak demand. [ ABC News ] Exxon Mobil has claimed oil and gas will still dominate world energy by 2040, in a statement released today as part of its long-term energy forecast. [ CBS ] A proposed pipeline-expansion project in Canada will put the fishing rights and cultural heritage of US tribes at risk, a lawyer representing several Washington state tribes told Canadian energy regulators. [ The Guardian ] http://everythingshale.com/news/2016/january/25/energy-news-roundup-scotus-uphold-energy-efficiency-law-exxon-s-bold-forecast-risk-of-pipeline-to-tribal-groups/ http://everythingshale.com/news/2016/january/25/energy-news-roundup-scotus-uphold-energy-efficiency-law-exxon-s-bold-forecast-risk-of-pipeline-to-tribal-groups/ Mon, 25 January 2016 12:53:25 http://everythingshale.com/news/2016/january/25/leading-business-group-says-fracking-provides-substantial-economic-benefits-for-colorado/ A new report from one of Colorado’s leading business and economic development organizations shows that hydraulic fracturing has been a driving force behind Colorado’s growing economy. The Metro Denver Economic Development Corporation (Metro Denver EDC) found that with nearly 50,000 people directly employed in the sector, Colorado ranked sixth in the nation for jobs with a workforce that represents nearly three percent of the total employment in the fossil fuels industry nationwide. Economists estimate that 2,340 fossil fuels related companies operated in the state in 2015 and the report specifically credits hydraulic fracturing for driving that job growth and investment. From the report : “Like many other recent oil and gas plays in the nation, technological advances in horizontal drilling and hydraulic fracturing techniques allow for greater production in the Niobrara shale formation within the Denver-Julesburg Basin along the Front Range. These advances have drawn significant attention from oil and gas companies, providing substantial economic benefits including capital investment, high-wage job creation, and export possibilities.” The authors attribute Colorado’s position as a “powerhouse producer” to an abundance of natural resources coupled with a “large pool of talented, well-educated and highly skilled workers.” And according to the report, the state is well poised to continue as a leader in shale development. From the report : “Colorado’s Niobrara shale formation—located in northeast Colorado’s rich Denver-Julesburg Basin (DJ Basin) and extending into parts of adjacent Wyoming, Nebraska, and Kansas—has led to substantial economic benefits including job creation, infrastructure development, export possibilities, and technological development. The 7,000-foot-deep geographic layer could hold more than 4 billion barrels of recoverable oil reserves.” Researchers also found that the state has been rising in the rankings in terms of production as well. Highlights from the report include : Natural Gas – Colorado ranked sixth among natural-gas producing states, accounting for 6.3 percent of U.S. natural gas production. Oil – Colorado ranked as the nation’s seventh-largest oil producer in 2014, producing a record 94.4 million barrels of crude oil. Colorado ranked seventh in the number of active rotary rigs as of October 2015, and Colorado had the seventh-highest proven oil reserves in the nation totaling 1,170 million barrels in 2013. The analysis sheds further light on the implications of national activist organizations that are targeting the state with a series of job-killing ballot initiatives. The political agenda these groups are seeking to impose would not only threaten Colorado’s economy, but would have the effect of sidelining a significant portion of our nation’s energy reserves and employment. Of course, this analysis is just the latest to show how important shale development is to Colorado’s economy. Simply put, without the oil and gas industry, Colorado’s economists would be telling a very different story. http://everythingshale.com/news/2016/january/25/leading-business-group-says-fracking-provides-substantial-economic-benefits-for-colorado/ http://everythingshale.com/news/2016/january/25/leading-business-group-says-fracking-provides-substantial-economic-benefits-for-colorado/ Mon, 25 January 2016 12:31:37 http://everythingshale.com/news/2016/january/25/williams-cuts-its-capital-budget-by-more-than-1-billion/ Williams Co. will slash its 2016 capital budget by more than $1 billion, the company said Monday, as the Oklahoma pipeline giant prepares to be acquired by Dallas' Energy Transfer Equity. The 35 percent capital budget cut from last year comes amid the ongoing oil crash and just two weeks after Moody's Investors Service downgraded Williams' credit rating. Williams said it is slicing its capital budget from $3.3 billion down to $2.1 billion for the year. Williams said it is canceling or delaying multiple projects because of the ongoing slump in oil and gas prices. As producers extract less soil and gas, there's less product for companies like Williams to transport, process or store. Our strategy remains intact and the underlying fundamentals of our business are strong despite the slower growth rates producers currently face,†said Williams CEO Alan Armstrong in a prepared statement. Armstrong noted the majority of capital spending will go toward the expansion of its Transco pipeline system running from Texas to New York. Williams also is looking to make about $1 billion in asset sales during the first half of the year. But the company has generated more news of late because, in September, Dallas-based Energy Transfer announced it reached a $32.9 billion deal to acquire Williams. Both Williams and Energy Transfer have most of their assets in their master-limited partnerships, Williams Partners and Energy Transfer Partners, respectively. The deal is expected to close in the second quarter of the year, and Williams on Monday again reiterated its focus on seeing the deal finalized. The sale would create the nation's largest energy infrastructure company. The midstream pipeline industry is somewhat protected from low oil prices because of long-term fee contracts, but the midstream sector is not immune from the whims of Wall Street and many pipeline companies have seen their stock values plummet, including Williams and Energy Transfer. http://everythingshale.com/news/2016/january/25/williams-cuts-its-capital-budget-by-more-than-1-billion/ http://everythingshale.com/news/2016/january/25/williams-cuts-its-capital-budget-by-more-than-1-billion/ Mon, 25 January 2016 11:44:56 http://everythingshale.com/news/2016/january/25/gasoline-prices-plummet-as-storage-levels-hit-25-year-highs/ Prices at the pump are continuing to plummet as the nation's gasoline storage inventories hit their highest levels since 1990. The Houston area sees an average of just $1.61 per gallon of regular unleaded gasoline on Monday, which is down more than 4 cents in a week, while the national average dropped 6.5 cents to $1.82 a gallon, according to GasBuddy survey data. Texas overall is averaging $1.62 a gallon. Gasoline prices are at their lowest point in seven years courtesy of cheap oil prices and weakening fuel demands during the winter months, including much less driving in the Northeast because of the effects of winter storm Jonas. Gasoline prices nationwide have now dipped for 19 consecutive days, according to GasBuddy. Gas prices could continue declining through February until refineries begin undergoing maintenance to switch to more expensive summer-blend fuels. The U.S. benchmark for crude oil is currently hovering just over $31 a barrel, while gasoline inventories are at about 245 million barrels in the county. As the Northeast digs out from the brutal blizzard Jonas, commodities markets are attempting to dig themselves out of their recent hole,†said Will Speer, GasBuddy senior petroleum analyst, in a prepared statement. Crude oil futures have lost 18 percent of (their) value since the end of 2015 and have cleared the way for the retail gasoline price decline. Ample supply has been attributed as the cause of prices falling at the pump.†Speer cautioned that gasoline prices could spike briefly this week — following a brief jump in oil prices last week — but any such increase would prove temporary before coming back down again. Nationwide, gasoline prices are averaging as little as $1.51 a gallon in Oklahoma and as much as $2.67 a gallon in California, which has faced supply issues from refinery outages. In Houston, pump prices are as cheap as $1.32 a gallon at an Exxon station at Fondren Road and Harwin Drive, and as pricey as $2.59 per gallon in the Galleria area and along Interstate 10. http://everythingshale.com/news/2016/january/25/gasoline-prices-plummet-as-storage-levels-hit-25-year-highs/ http://everythingshale.com/news/2016/january/25/gasoline-prices-plummet-as-storage-levels-hit-25-year-highs/ Mon, 25 January 2016 10:54:03 http://everythingshale.com/news/2016/january/25/russian-japanese-economies-continue-to-be-impacted-by-crude/ We've had a number of economic releases out of Russia, all of which point to a country feeling the pain of low oil prices. The Russian economy contracted by 3.7% in 2015 , the biggest drop since 2009, while industrial production shrank by 4.5% YoY in December (worse than the -4.2% expected) and retail sales dropped by -15.3% YoY (although not as bad as the -16% expected). The unemployment rate remained at 5.8% in December. Russian crude production is up at post-Soviet records despite low prices, as the government tries to pull in as much revenue as possible. Oil exports accounts for ~70% of Russia's total export revenues ; Russian oil production reached a Soviet-era high of 11.4 million barrels per day in 1987, before dropping to a low of 6.1 mn bpd in 1996. Driven by a shrinking population and increasing fuel efficiency for vehicles, Japanese crude oil imports have fallen to their lowest level since 1988. Oil product demand peaked in the fiscal year of 1999 , and has been in decline since. According to the Japanese Ministry of Finance, imports fell by 2.3% last year. According to our ClipperData , Japanese imports fell by 3% in 2015 on the year prior. The Arab / Persian Gulf overwhelmingly accounted for the largest portion of crude imports last year at 86%. Saudi Arabia accounted for 34% of total crude imports, followed by UAE (26%) and Qatar (11%). Japanese crude imports by load region (source: ClipperData) As we all know so well, all paths lead back to energy, hence Japan's annual trade deficit has narrowed last year, led by…..bah bahpah bahpah bahpah!!…falling energy costs. The trade balance swung back into a surplus in December, as both imports and exports shrank by more than expected. Imports in December fell by a whopping 18% (h/t lower energy costs), while exports shrank by 8% (h/t slower demand from China). OPEC Secretary General Abdalla Salem El Badri has been speaking at a conference today in London, with his slidedeck kindly posted onto the OPEC website . The chart below was the pick of the bunch, illustrating the relationship betwixt commercial crude stocks and prices: excessive stock surpluses impact crude prices. Finally, the chart below illustrates the impact of fossil fuel subsidies on the GDP of some countries. The IEA estimates that these subsidies totaled $493 billion in 2014, while the drop in oil prices is giving way to a huge opportunity for some of these countries to unwind these subsidies. According to a study last year , scrapping subsidies in 20 nations would cut CO2 emissions by an average of 11% within five years. While subsidies were originally implemented to provide a financial benefit to consumers, the result has instead been excessive consumption. http://everythingshale.com/news/2016/january/25/russian-japanese-economies-continue-to-be-impacted-by-crude/ http://everythingshale.com/news/2016/january/25/russian-japanese-economies-continue-to-be-impacted-by-crude/ Mon, 25 January 2016 09:09:04 http://everythingshale.com/news/2016/january/25/coal-is-no-longer-king-in-china/ New data suggests China has tipped past peak coal. Electricity generation from coal-fired power plants in China dropped by an estimated 4 percent in 2015, according to new government data reported by the Institute for Energy Economics and Financial Analysis . More significantly, year-over-year thermal power capacity utilization fell from about 54 percent in 2014 to 49.4 percent in 2015, the first time thermal power capacity was not the majority of electricity generation. The new data comes after questions last year as to whether coal consumption was falling as fast as some thought in China, given conflicting data. One of the major reasons for the slump in coal consumption was the sluggish Chinese economy, which had its slowest growth rate in overall electricity demand since 1998. The Chinese government also reported this week the slowest economic growth rate in 25 years , a trend that is expected to continue. Cuts to coal imports in China were even more severe than the consumption rate, according to IEEFA, down more than 30 percent from 2014. This telling import data confirms the last flicker of hope has been snuffed out, not least for Australia's Galilee Basin,†Tim Buckley, director of energy finance studies for Australasia at IEEFA, wrote in his analysis. It also carries massive negative implications for Indonesia's coal export market, given the concurrent collapse in Indian demand,†he said. Besides the slow economy, another key to China's energy mix is the contraction of its heavy industry, which burns nearly one-quarter of all coal used in the country. IEEFA reported electricity use by heavy industry fell nearly 2 percent during 2015, while the service sector’s electricity consumption grew by more than 7 percent. In 2013, the service sector in China overtook the industrial sector for the first time, according to the U.S. Energy Information Administration. China is moving away from using its thermal generation capacity, but that doesn't mean the country isn't adding more. IEEFA reported 64 gigawatts of new thermal power capacity that is essentially idle, an addition that makes no sense,†Buckley said. While there are still investments in thermal generation in China, renewables and nuclear are making up an increasing portion of power investment. Clean-energy investment in China was $110 billion in 2015, about equal to the investment of the U.S. and Europe combined last year, according to the latest figures from Bloomberg New Energy Finance . IEEFA forecasts a record 18 gigawatts of solar in China in 2016, along with 24 gigawatts of wind and 16 gigawatts of new hydro. At the same time, China's National Energy Agency announced it will not approve any new coal mines for three years and will close approximately 1,000 small mines. Although data from China's National Energy Agency will continue to be scrutinized, the implications of these changes are huge,†Buckley said of the country's slow push away from coal, adding that China's total emissions could peak a decade earlier than the country’s official target of 2030. By Katherine Tweed Originally published on Greentech Media , January 21  2016 http://everythingshale.com/news/2016/january/25/coal-is-no-longer-king-in-china/ http://everythingshale.com/news/2016/january/25/coal-is-no-longer-king-in-china/ Mon, 25 January 2016 09:00:57 http://everythingshale.com/news/2016/january/25/halliburton-sheds-another-4-000-jobs/ Other stories we're following: Shell to cut thousands more jobs around the world Schlumberger CEO says layoffs at company may finally be over   Oil field services giant Halliburton shed another 4,000 jobs in the final three months of 2015, as the Houston-based company continued to aggressively cut costs amid the worst oil crash in decades . With the latest job cuts, Halliburton has reduced its global workforce by 25 percent, a total of about 22,000 employees since its peak in 2014. And more cuts could be on the way if a recovery in crude prices stalls, company executives said Monday morning. 2016 is shaping up to be one tough slog through the mud and the industry is going to have to take it a quarter at a time,†CEO Dave Lesar said. The company lost $28 million in the three-month period ending Dec. 31 due to impairment charges from asset write-offs and severance pay for laid-off workers. Halliburton has continued to feel pressure from a global retreat from the oil patch. The company's fourth quarter loss of loss of 3 cents per share was down sharply from a $901 million profit, or $1.06 per share, during the same three-month time period last year, the company reported early Monday morning. Still, Halliburton executives celebrated the company's performance, noting that its revenue, which slipped 28 percent, didn't fall as sharply as the 35 percent decline in the global rig count and worldwide spending on drilling and completions. Instead of bouncing back as some had expected, crude continued to collapse in 2016, tumbling below $30 a barrel earlier this month for the first time in 12 years . Given the uncertainty over commodity prices, oil companies have been reticent to announce spending plans for 2016, leaving oil field services companies unable to chart a path forward. Exploration and production capital spending appears poised to fall for the second year in a row, marking the first time that's happened since the ruinous bust in the late 1980s, Lesar said. Some surveys indicate that oil companies may trim their spending budgets by 30 to 50 percent from last year in North America. That's in addition to the 40 percent spending cut that happened in 2015, Lesar said. The reality is: Due to the macro-uncertainties, many of our customers are managing their businesses in real-time, rig by rig,†he said. Accordingly, we are going to take this market week-by-week, and in some cases, crew by crew. This is unlikely to change until our customers have confidence in a sustainable and economical oil price.†In addition to the layoffs, Halliburton has also slashed costs by consolidating offices in more than 20 places around the world and shutting down operations in two countries. The company declined to provide more details. Halliburton ended the year with a reduced spending budget of $2.2 billion. Executives said the company will slash its capital expenditures in 2016 to $1.6 billion. Despite intense regulatory scrutiny , Halliburton remains committed to closing its acquisition of rival services provider Baker Hughes. Halliburton recently provided the U.S. Department of Justice with proposals for additional divestitures in an attempt to satisfy concerns about competition, Lesar said. The justice department had previously announced that plans to spin-off about $5.2 billion in assets didn't go far enough to assuage worries that the combined companies would wield too much control over certain markets. Halliburton also informally notified of the European Commission of its stepped-up divestiture plans as it works to provide remedies to antitrust regulators' concerns. The companies remain in discussions with interested buyers, Lesar said, but declined to provide additional details. Given the longer-than-anticipated regulatory process, the companies have extended the closing date to April 30, but can agree to extend it further if necessary, Lesar said. We strongly believe that the proposed merger is good for the industry and for our customers,†he said. The combination is expected to create en even stronger company and achieve substantial efficiencies, enabling us to compete aggressively to provide efficient, innovative and low-cost services. http://everythingshale.com/news/2016/january/25/halliburton-sheds-another-4-000-jobs/ http://everythingshale.com/news/2016/january/25/halliburton-sheds-another-4-000-jobs/ Mon, 25 January 2016 07:43:52 http://everythingshale.com/news/2016/january/25/opec-s-el-badri-calls-on-global-oil-producers-to-help-curb-glut/ The head of the Organization of Petroleum Exporting Countries said he wants oil producers outside the group to assist in reducing the global oversupply, signaling once again that OPEC won't make output cuts alone. It is vital the market addresses the issue of the stock overhang,â€Â Secretary-General Abdalla El-Badri said Monday at a conference in London. It should be viewed as something OPEC and non-OPEC tackle together.†Crude sank to the lowest in more than 12 years this month as supply swamped demand. With OPEC effectively abandoning its output ceiling in December, Russia pumping near record levels and U.S. shale fields proving more resilient than forecast, the global surplus has continued to swell. Crude stockpiles in the U.S., the world's largest oil consumer, were more than 100 million barrels above the five-year average at the end of 2015. It is crucial that all major producers sit down to come up with a solution to this,†El-Badri, 75, said at the Chatham House think-tank. There are signs supply and demand will start to come back into balance this year, he said, citing a forecast increase in global demand of about 1.3 million barrels a day, and a contraction in non-OPEC supply of about 660,000 a day. Risking Investment Brent oil, the global benchmark, is down about 16 percent this year as volatility in global markets adds to concern over brimming U.S. stockpiles as well as the prospect of additional Iranian exports following the removal of international sanctions. The slump in prices is putting future investment in new oil supply at risk, according to El-Badri. New barrels are needed not only to increase production, but to accommodate for decline rates from existing fields,†he said. OPEC's de facto leader, Saudi Arabia, has refused to curtail output as it pursues a strategy to defend market share and pressure rival producers with lower prices. The kingdom has said it won't reverse course unless non-OPEC nations play their part in production cuts, a view backed by El-Badri on Monday. Until 2015, all of the supply growth since 2008 has come from non-OPEC countries,â€Â he said, conceding that this dynamic changed†last year, when OPEC supply grew by about 1 million barrels a day. The five-year average level of commercial stockpiles in the Organization for Economic Cooperation and Development rose to a surplus of more than 260 million barrels at the end of 2015 from a negative 85 million barrels in 2013, he said. El-Badri, a Libyan native, was given another extension at the last OPEC meeting to remain as secretary-general until July. Originally due to step down in 2012, El-Badri's term has been extended several times as members fail to agree on successors proposed by Saudi Arabia, Iran and Iraq. http://everythingshale.com/news/2016/january/25/opec-s-el-badri-calls-on-global-oil-producers-to-help-curb-glut/ http://everythingshale.com/news/2016/january/25/opec-s-el-badri-calls-on-global-oil-producers-to-help-curb-glut/ Mon, 25 January 2016 07:17:31 http://everythingshale.com/news/2016/january/24/how-quickly-can-iran-get-its-oil-groove-back-fuel-for-thought/ Iran’s speed of re-integration into the global oil market is a million b/d question mark hanging over the industry. How much additional oil will flow from Iran will depend on how quickly Tehran can ramp up after several years that effectively shut in a chunk of its production and how fast it can make new inroads into an already crowded market. The International Energy Agency is fairly bullish about Iran’s ability to get production up in the near term, suggesting that shutting in some production during the past few years will have increased well pressure, thus making it fairly easy for Tehran to achieve a quick volume boost. Indeed, it says, some of Iran’s core oil fields such as Ahwaz, Marun and Gachsaran may actually have been revived under the sanctions. A bigger challenge for Iran, perhaps, will be selling the additional barrels in the volumes targeted by oil minister Bijan Zanganeh — 500,000 b/d in the immediate post-sanctions period and a further 500,000 b/d over the following months, leading to a doubling of the current 1 million b/d export level within six months of the lifting of sanctions. Goldman Sachs suggests that the ramp-up in production may turn out to be more measured, noting that Iranian exports through the second half of last year held at a two-year low. This is more likely to reflect greater competition between Middle East heavy crudes than Iran’s inability to maintain output, it says. So, even if Iran does have the capacity to boost exports, it’s likely to have to offer discounts, and, the bank says, given already low prices, this could lead to a more gradual rise in exports. Blog post continues below… Request a free trial of: Oilgram News   Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more. The IEA also highlights the marketing challenge and expects Iran not only to be competitive in its pricing policy, but also to be open to crude-for-product swaps and deferred payment terms. In the meantime, the IEA believes Iran has made considerable progress in readying its oil network and identifying prospective buyers and reckons an additional 300,000 b/d of crude could be flowing by the end of the March this year, although it does make the point that for now this volume is speculative. It estimates that Iran increased production by 40,000 b/d between November and December to help fill storage tanks at the Kharg Island loading terminal in preparation for the lifting of sanctions and expects Iranian oil flows to rise towards pre-sanctions capacity of 3.6 million b/d within six months. According to the IEA, 60% of Iran’s initial 500,000 b/d of new exports could be made up of Iranian Heavy, 30% of Iranian Light and the remainder consisting of a new heavy grade called West of Karun, which is due to make its debut in the second quarter. Who will buy Iran’s oil? The IEA thinks Iran will try to place around 200,000 b/d of additional oil with existing customers in Asia such as China, India, South Korea and Japan, and around 250,000 b/d In Europe, mainly with Mediterranean refiners that were traditional users of Iran’s sour crude. Fereidun Fesharaki, chairman of consultancy Facts Global Energy, expects a 300,000 b/d export boost by end-March and another 300,000 b/d by end-June. Early volumes will head largely to Asia, where mechanisms for taking Iranian crude are already in place, he says in a note, while operational and banking issues will delay the European ramp-up to the second quarter. Iran is unlikely to achieve its target of boosting exports by 1 million b/d within six months of the lifting sanctions because, he says, while Tehran wants to recover its market share, it doesn’t want an all-out price war. Fesharaki says the first wave of exports is already placed but that further increases are likely to present more of a challenge, and that Iran’s marketing strategy is likely to evolve over the year ahead. Fesharaki says the volume of condensate is somewhere between 30 and 50 million barrels whereas the volume of crude stored afloat is between 10 and 15 million barrels. The bulk of the floating condensate is likely to go to China, Japan and South Korea, he says. Iran will need to free up its tanker fleet as soon as possible to deliver crude but selling these condensate barrels, given their “specialized nature,” could prove to be tough, the agency says. So, until substantial volumes of this ultra-light oil can be sold, Iran will likely concentrate on selling crude from Kharg Island. — Margaret McQuaile http://everythingshale.com/news/2016/january/24/how-quickly-can-iran-get-its-oil-groove-back-fuel-for-thought/ http://everythingshale.com/news/2016/january/24/how-quickly-can-iran-get-its-oil-groove-back-fuel-for-thought/ Sun, 24 January 2016 23:01:39 http://everythingshale.com/news/2016/january/22/tax-tips-for-energy-savers-get-money-back-for-greening-your-home/ Good news for you in 2016! Congress renewed the previously expired Residential Energy Efficiency Tax Credit and extended the Residential Renewable Energy Tax Credit for solar energy systems as part of the Consolidated Appropriations Act. This means that any qualified efficiency updates you made in 2015 are eligible for credits when you file your taxes in the coming months. Plus, updates you make in 2016 will be eligible for credits when you file next year. And that solar energy or hot water project you were considering? You may be able to claim a tax credit for 30% of the cost to install one. RESIDENTIAL ENERGY EFFICIENCY TAX CREDIT Previously expired at the end of 2014, the efficiency tax credit has now been retroactively renewed from January 1, 2015, through December 31, 2016. If you made energy efficient home improvements last year (or plan to this year), use the list below to find out if your project could save you money. The following products are eligible for tax credits: Building envelope improvements Insulation materials and systems Exterior doors and windows, including skylights Roofs—pigmented roofs designed to reduce heat gain, and asphalt roofs with cooling granules Heating, cooling, and water heating equipment Advanced main air circulating fan Natural gas, propane, or oil furnace or hot water boiler Electric heat pump water heater Electric heat pump Central air conditioner Natural gas, propane, or oil water heater Biomass stoves Each of these products has specific requirements to qualify for the tax credit; be sure to review the Residential Energy Efficiency Tax Credit requirements carefully before making a claim on your 2015 taxes or committing to a new purchase in 2016. RESIDENTIAL RENEWABLE ENERGY TAX CREDIT If you’re planning a renewable home energy project, such as installing a geothermal heat pump, small solar energy system, small wind energy system, or fuel cell property, those tax credits have also recently been modified. The 30% tax credit for solar electric property and solar water heating property has been extended through 2019, with a gradual decrease in the tax credit amount in successive years through 2021. There has been no change in the tax credits for fuel cell property, small wind energy property, and geothermal heat pumps. The tax credits are for 30% of qualified expenditures, with no maximum credit (except for fuel cells), and they expire at the end of 2016. Because implementing any of these technologies can entail a good deal of planning, you’d be wise to start now to ensure the systems are placed in service by the end of the year. Please see the Residential Renewable Energy Tax Credit for more on the requirements for each. LEARN MORE Energy Saver has a number of resources to get you started in your planning: Planning for home renewable energy systems Small solar electric systems Small wind electric systems Geothermal heat pumps Solar water heaters And because you’ll need to understand the ins-and-outs of the tax credits, head over to ENERGY STAR for its summary of the credits and comprehensive frequently asked questions about the tax credits . These resources are also helpful if you installed a system in 2015 and will be claiming the credit on your 2015 taxes. Finally, check out one of our previous blog entries for more on the various incentives and financing options  that you should explore when taking on a large home energy project. Happy planning! http://everythingshale.com/news/2016/january/22/tax-tips-for-energy-savers-get-money-back-for-greening-your-home/ http://everythingshale.com/news/2016/january/22/tax-tips-for-energy-savers-get-money-back-for-greening-your-home/ Fri, 22 January 2016 16:00:34 http://everythingshale.com/news/2016/january/22/us-energy-revolution-missing-in-state-of-the-union/ It's become a  State of the Union  tradition: President Obama touts the  benefits of oil and natural gas production  without identifying the American energy revolution as their source. This year, the president implied that government investments in wind and solar are the reason the United States has cut our imports of foreign oil by nearly 60 percent, and cut carbon pollution more than any other country on Earth.†Gas under two bucks a gallon ain't bad, either,†he continued. The  New York Times  was quick with a rebuttal, writing: Private oil and gas companies, however, were a driving force behind the most important changes in the United States' energy landscape over the past seven years: lower fossil fuel emissions and a reduction in dependence on imported oil. … A glut of domestic oil has helped lower prices and imports. The new supply of domestic natural gas has helped lower greenhouse gas emissions. Electric utilities have traditionally relied on coal as the cheapest fuel source, but turned to natural gas as it became cheaper.†We couldn't have said it better ourselves. In fact, that's pretty much the definition of what we've been calling  the U.S. model   the combination of market forces that have lowered emissions and consumer costs while increasing oil and natural gas production, not to mention economic growth. All without government mandates. Just as those who don't know history are doomed to repeat it, those who don't recognize the contributions of the American energy revolution are likely to undermine it. The assumption that energy production and emissions reductions are mutually exclusive has been rendered obsolete by the facts, and policies based on this flawed idea could damage the economy and harm consumers. The American energy resurgence has  created jobs , generated economic growth and government revenue, driven significant emissions reductions , slashed  energy costs  and enhanced our security. Leaving this reality out of a speech is one thing, but ignoring it in policy development is a serious mistake. By Jack Gerard  Originally posted January 21 , 2016 Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America's oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry. http://everythingshale.com/news/2016/january/22/us-energy-revolution-missing-in-state-of-the-union/ http://everythingshale.com/news/2016/january/22/us-energy-revolution-missing-in-state-of-the-union/ Fri, 22 January 2016 13:00:35 http://everythingshale.com/news/2016/january/22/energy-news-roundup-chesapeake-surges-markets-rally-2015-hottest-year-on-record/ Chesapeake Energy Corp surged 8% in premarket trade Friday, after the company said it is suspending its quarterly preferred stock dividends in an effort to save cash. [ MarketWatch ] U.S. stocks are rising Friday as energy prices continue to climb and give a boost to energy companies. [ ABC ] Last year shattered 2014's record to become the hottest year since reliable record-keeping began, two U.S. government science agencies have announced in yet another sign that the planet is heating up. [ The Washington Post ] http://everythingshale.com/news/2016/january/22/energy-news-roundup-chesapeake-surges-markets-rally-2015-hottest-year-on-record/ http://everythingshale.com/news/2016/january/22/energy-news-roundup-chesapeake-surges-markets-rally-2015-hottest-year-on-record/ Fri, 22 January 2016 12:24:37 http://everythingshale.com/news/2016/january/22/pennsylvania-announces-plan-for-strongest-methane-rules-in-the-nation/ Pennsylvania leaders have a duty to protect Keystone residents from oil and gas pollution.  Fortunately, Governor Wolf and the Pennsylvania Department of Environmental Protection  took an important step in that direction this week when they released a blueprint for cutting methane pollution from the natural gas industry. The goal here is to cover not only new sources of methane and VOC emissions [from oil and gas facilities], but also existing sources over time,†DEP Secretary John Quigley told hundreds of viewers during a live Facebook town hall event yesterday. We want to have a comprehensive emissions program that is nation-leading. I think it's the strongest set of provisions in the country, and I think the number two natural gas producing state in the nation  should have the best regulations, and that's what we're going to have in Pennsylvania.†That's a bold and laudable commitment one that deserves our support to help make sure the promise becomes reality. As the second largest gas-producing state in the nation, it's critical that we get the rules right in Pennsylvania.  In 2014 alone, Pennsylvania operators produced more than 4 trillion cubic feet of gas.  That amount of production comes with an environmental cost that cannot be ignored. Methane, the primary component of natural gas, is a highly potent climate pollutant responsible for about a quarter of the global warming we are experiencing right now. Methane leaks are ubiquitous up and down the natural gas supply chain.  They result from both intentional venting and accidental leaks that come from poorly maintained equipment and sloppy field performance. The ongoing disaster at the natural gas storage facility in Aliso Canyon, California puts a painful spotlight on the need for strong rules and vigilant oversight. It also highlights the fact that emissions are probably much greater than we realize. Traditional emission estimates often fail to capture big leaks in their numbers, so industry-reported data very likely underestimate methane emissions by a wide margin. Leaking methane also allows smog-forming volatile organic compounds and other toxic air pollutants to escape increasing the risk of real health impacts to local communities. So, eliminating methane emissions is a win-win, helping reduce the climate impacts from natural gas and protecting communities from health-damaging pollution. A key feature of Governor Wolf's announcement is the commitment to regulate natural gas operations that are already up and running today not just new facilities that will be built in the future. The U.S. Environmental Protection Agency has proposed rules to regulate emissions from future operations, and that's an important first step. But it won't address emissions from the thousands of well sites, compressor stations, pipelines and other natural gas facilities that Keystone residents are living with every day. The EPA needs to put a national framework in place for both new and existing sources of methane so all citizens are protected from harmful emissions no matter where they live. But Pennsylvanians shouldn't have to wait.  That's why action from the Wolf administration is so important. Pennsylvania is also in a position to help shape a national framework for regulating methane emissions. At EDF, we have long supported state leadership and have encouraged the EPA to look to pioneering states like Colorado and now Pennsylvania as models for regulating methane. Governor Wolf's proposal is just the beginning of the process in Pennsylvania. Now, it is up to the Department of Environmental Protection to propose, finalize and implement actual regulations as soon as possible. EDF is committed to working with the administration and other stakeholders to ensure Pennsylvania meets its commitment to adopting the strongest and most protective methane regulations in the country. By Andrew Williams  Originally Published on January 20, 2016 The Energy Exchange Blog is a forum where EDF energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX http://everythingshale.com/news/2016/january/22/pennsylvania-announces-plan-for-strongest-methane-rules-in-the-nation/ http://everythingshale.com/news/2016/january/22/pennsylvania-announces-plan-for-strongest-methane-rules-in-the-nation/ Fri, 22 January 2016 09:00:44 http://everythingshale.com/news/2016/january/21/us-ethanol-seems-to-resist-the-siren-song-of-low-gasoline-prices/ US ethanol’s recent pursuit of gasoline’s nosedive has reminded me of the Gin Blossoms classic, “Follow You Down.” In the chorus of that 1996 hit, the band sings, “Anywhere you go, I’ll follow you down. I’ll follow you down, but not that far.” That’s basically where US ethanol prices are at right now: Looking at gasoline prices, saying, “I’ll follow you down, but not that far.” Ethanol maintained a discount to gasoline as long as possible, following gasoline all the way down to levels not seen in more than a decade. As gasoline tracks crude into 12-year lows, ethanol has also ventured into its cheapest price since before the US Renewable Fuel Standard was originated in 2005, when the government began requiring blenders to use ethanol at escalating levels. On January 13, the Platts benchmark Chicago Argo ethanol assessment reached $1.2650/gal, the lowest level since June 2005. Meanwhile, the Platts CBOB Chicago pipe assessment was at 90.33 cents/gal, which was a fourth straight record-low assessment that was further topped in the ensuing four sessions, dipping to 82.25 cents/gal on January 20. The ethanol assessment, on the other hand, shifted gears, stringing together its first five-day rally since October. Ethanol seems to be putting its foot down, unwilling to go any lower. While gasoline wanders lower and lower, flirting with the treacherous $1/gal threshold, ethanol prices seem to have reached a floor. Ethanol producers have seen the writing on the wall for a while now. With all indications pointing to lengthy bearishness in the petroleum complex, US ethanol production was pushed to the limit as producers sought out maximum margin returns while they were still there. Ethanol production finally topped the milestone 1 million barrels per day mark for the first time in November and has done so two more times since then, US Energy Information Administration data shows. Because those mammoth production rates outpaced the escalating flow of exports, stockpiles approached 22 million barrels for the first time since March 2012. The swelling supplies alongside the steady production allowed wiggle room for producers to continue to chase gasoline prices down toward the $1/gal mark, not to mention the fact that an ethanol RIN is still worth a healthy 65-70 cents to keep the blending incentive there. But now that corn has taken an unexpected nudge north and China has again closed shop on the flow of dried distillers grains that helped prop up margins throughout 2015, holders of ethanol finally have a few reasons to be bullish. Basically, without the extra help from DDGs and cheap corn, producers can’t afford to chase gasoline prices anymore. The biggest question is, where do we go from here? Do US ethanol producers continue to pump out 1 million b/d and seek export opportunities to thrive around the 10% blend wall? E85 is steadily growing, but competing with gasoline prices near $1.50/gal is a far less-than-ideal environment to push higher ethanol blends, especially if you have to ask consumers to pay more for the fuel. Until gasoline prices rebound significantly, US ethanol might be forced to settle into its new-found role as a costlier fuel option. Ethanol simply can’t follow gasoline down that far. http://everythingshale.com/news/2016/january/21/us-ethanol-seems-to-resist-the-siren-song-of-low-gasoline-prices/ http://everythingshale.com/news/2016/january/21/us-ethanol-seems-to-resist-the-siren-song-of-low-gasoline-prices/ Thu, 21 January 2016 23:01:54 http://everythingshale.com/news/2016/january/21/energy-department-announces-58-million-to-advance-fuel-efficient-vehicle-technologies/ WASHINGTON U.S. Department of Energy Secretary Ernest Moniz announced more than $58 million in funding for vehicle technology advancements and released a report highlighting the successes of DOE's Advanced Technology Vehicles Manufacturing (ATVM) loan program while touring the newest vehicle technologies at the Washington Auto Show today. Continuing the Obama Administration's commitment to supporting the domestic automobile industry, Secretary Moniz announced a $55 million funding opportunity that will solicit projects across vehicle technologies like energy storage, electric drive systems, materials, fuels and lubricants and advanced combustion. Secretary Moniz also announced that two innovative projects at CALSTART and the National Association of Regional Councils will receive $3 million to develop systems that help companies combine their purchasing of advanced vehicles, components, and infrastructure to reduce incremental cost and achieve economies of scale. These technologies will help save American consumers money and decrease carbon emissions by increasing the fuel efficiency of conventional cars and trucks, while also supporting DOE's EV Everywhere Grand Challenge to make plug-in electric vehicles (PEVs) as affordable to own and operate as today's gasoline-powered vehicles by 2022. Our work refining cars that are efficient, affordable and can plug into the grid will also help propel us to even greater progress on reducing pollution and boosting energy security,†said Secretary Moniz. These successful investments in next-generation vehicle technologies are a clear example of the impact innovation can have on industry and consumers.†Since President Obama took office, he has spurred critical investments in the domestic automobile industry. DOE has played an important role in both supporting American automakers and driving U.S. research and development in advanced and efficient vehicles. The ATVM loan program has invested $8 billion in supporting the production of more than four million fuel-efficient cars and creating more than 35,000 direct jobs across eight states. Projects supported by this new funding opportunity announced today will develop battery materials, components, and models; advanced electric drive vehicle motors; improve lightweight materials; address grid modernization and showcase plug-in electric vehicles and infrastructure. DOE will fund cost-shared projects with private industry, national laboratories, and university teams. For more information and application requirements, please visit the EERE Exchange  website or Grants.gov . The ATVM report is available at Energy.gov . http://everythingshale.com/news/2016/january/21/energy-department-announces-58-million-to-advance-fuel-efficient-vehicle-technologies/ http://everythingshale.com/news/2016/january/21/energy-department-announces-58-million-to-advance-fuel-efficient-vehicle-technologies/ Thu, 21 January 2016 16:00:18 http://everythingshale.com/news/2016/january/21/the-biggest-mistakes-to-avoid-when-setting-up-your-b2b-e-commerce-website/ Setting up a B2B e-commerce website can be a lucrative aspect of your business. It can also be an unmitigated disaster if you don't set up the site correctly. All too often, companies make mistakes that make their websites unnecessarily cumbersome or not useful to their audience. As a result, they waste time and money, and miss out on valuable marketing potential and brand-building potential. By avoiding the most common and destructive mistakes, though, your B2B website can be useful to potential partners and customers. If you are in the process of developing a new site for your small business, or your existing site isn't performing to your expectations, consider whether any of these issues could be the culprit. Inadequate Hosting If you are spending money on Web design and development, why would you cut corners on hosting? Yet so many businesses do, settling for hosting service that doesn't present their business in the best light. The foundation of an effective website is hosting with an e-commerce solution that understands the unique demands of an e-commerce site and doesn't suffer from slow loading times, outages, and other issues that can plague hosting services. If nothing else, keep in mind that free†or low-cost services often keep their rates low through advertising — and you may not always have control over the advertisements that appear on your site. The damage that inappropriate or misaligned advertising can do to your brand cannot be understated. Poor Navigation Visitors to your site want to know who you are and what you do right away — studies show that users expect to see that information within 10 seconds of landing on your site. If they can't find it easily, they are likely to get frustrated and leave. Navigation needs to be intuitive, requiring no more than two to three clicks for users to find what they are looking for. Advanced search capability is also a must. Research shows that customers who use your on-site search capabilities and find what they need are three times more likely to convert than customers who don't, so invest some time in developing more advanced search capabilities to ensure that every visitor can find what they need. It's Hard to Make a Sale If a potential customer wants to talk with someone about your products or service, do they know how to reach you? Just as a cumbersome checkout process increases cart abandonments, not having adequate, easy-to-locate contact information can reduce your conversions. In addition to your forms, emails, and live chat functions, every page should include a phone number that prospects can call to talk with an actual person before making a purchase decision. Not Offering Premium Content B2B marketing is all about building relationships and making sales. Capturing visitor contact details is a key part of creating those relationships, but many people are reluctant to share their information. Offering premium content in exchange for an email address (or other contact information) is a growing strategy among B2B marketers. By offering certain content, such as case studies, whitepapers, and features that augment blog posts and other articles on your site, you give visitors a reason to share their information. Just be sure to offer valuable free†content as well, so visitors will be excited about signing up. Being Boring Too many B2B marketers equate serious†and business†with boring.†Instead of telling a compelling story using bold visuals, clear value propositions, and actionable content, too many businesses use stock photos and boring product descriptions. Research shows sites that use stock, manufacturer descriptions for products perform poorly in terms of SEO and customer retention, so spend some time building your brand story. Let your customers speak for you, and incorporate elements like video, infographics, and storytelling throughout every page. Think in terms of headlines and bullet points, not jargon and specs. Focus on get leads to call you — you can get into the specifics then. Effective B2B e-commerce sites require a different approach than typical B2C websites. Still, many of the elements that attract customers to a shopping site apply to B2B: Make information easy to find, make it interesting, and make sure that everything works the way that it should. When you focus on these important aspects , your traffic will increase — along with your leads and conversions.   http://everythingshale.com/news/2016/january/21/the-biggest-mistakes-to-avoid-when-setting-up-your-b2b-e-commerce-website/ http://everythingshale.com/news/2016/january/21/the-biggest-mistakes-to-avoid-when-setting-up-your-b2b-e-commerce-website/ Thu, 21 January 2016 14:00:52 http://everythingshale.com/news/2016/january/21/the-price-of-oil-looking-ahead-without-all-the-noise/ The one given in this industry is that the analyst community is consistently wrong about where the price of oil is going in the near to mid-term. Just as $100 oil was a sentiment driven price that baked in the risk of every potential negative impact on the supply chain, $28, $30 or $40 dollars is equally sentimental, assuming that any and all incremental barrels are and will be available AND demand will slow or stop. 2013 and 2015 forecasts. (forecasting sentiment is hard) Image Sources:    EIA So let’s just step away from the current noise and focus on a non-controversial outcome… that oil will be much more valuable in the future than it is today. What, exactly, will that future look like? Today’s pricing sentiment is driven by a global economic “Pick 6” today… US production rates, Saudi Arabia’s ability to grow production, Iran’s latent ability to produce more oil, Chinese economic slowdown and its impact on consumption, Russia’s ability to add global production, and OPEC’s inscrutable strategy. Let’s stipulate a couple of assumptions. First, people will produce existing wells at rates that aren’t sustainable to preserve cash flow or compete for market share, because the cost to drill and bring online is already sunk. Second, new wells will not be drilled if there isn’t at least an outlook to breakeven producing them. That means an expectation of a sustained price over 1-3 years or until the well has been paid out. US Production Rates Image Source: Drillinginfo Production Report for Unconventional US Onshore Plays (Combined MBOE 20:1) over last six years. Note the lag in production reporting means Q42015 and even some Q32015 reports are not finalized. First, let’s look at the US, the simplest and most transparent of the “Pick 6” issues bandied about as a price driver. Certainly the unconventional revolution has been a huge factor in global production increases over the last 6 years. The item NOT generally recognized is that production typically lags drilling by some 5 months, thus the drilling in December 2014 is discernible in production records in April 2015. That analysts were alarmed at increasing production and supply during the 1st half of the year suggested that they DIDN’T understand this dynamic, nor did the business press.  We predicted in April  that monthly production would peak in May and then jump around between -100k bopd and -350k bopd for the rest of the year. When looking at additional production month over month, it is important to remember that it is building on a sloping foundation of natural decline. For instance, in 2014, as the US added some million barrels of daily production, it had to produce 2.2 million NEW barrels of production to do so. The slope of that foundation required 1.2 million NEW barrels to just flatten it out. First year production in the US has had a blended annual decline that has increased from 41% in for 2010 era wells to 47% for 2013 era wells. Therefore, 2014 era wells were likely to have declined 49% and 2015 by 51% in their first year. Second year declines show less of a pattern, ranging from 10-20% decline from the end of the prior year. In other words, we will see  REAL production declines in 2016  as the full impact of 2015 drilling reductions are cycled through. Depending on the variability of the second year declines, this could range from -400k BOPD to well over -1MM BOPD. So, the US isn’t going to be the bringer of oil glut news going forward. In fact, the US oilpatch has severely damaged its capacity to rebound from an Oil Field Services point of view, with companies foregoing normal maintenance to just survive. This deferred maintenance will have permanent consequences. SCORE: NOT a Driver. Saudi Arabia’s Ability to Grow Production Whereas Saudi’s rig count is up, so is it’s production. They are producing  record amounts  and most analysts believe that there is little if any behind valve production. SCORE: NOT a Driver Iran’s Latent Ability To Produce More Oil When sanctions hit Iran, they immediately dropped 600k BOPD from their official production levels. That they report the same production to the barrel since cause their official number to be quite suspect. Iran has not been investing in their  infrastructure  and they require outside dollars to reinvest in existing production, ranging from $30 billion to $500 billion over the next 5 years, depending on the source to maintain what they have. $30 oil is not an environment amenable to outside tender offers. Some claim that there will be no NET new production in the near term, that Iran will merely start to recognize the production of oil it has sold in the black market. In any case, 500k NEW BOPD are baked in as of last week. SCORE: NOT a Driver Chinese Economic Slowdown and its Impact on Consumption As the year has progressed, the Chinese economy exhibits signs of extreme duress, suggesting that demand growth could weaken materially. Imports of metals and building materials are down substantively. Oil is not. China continues to  import crude oil  at increasing rates, most likely taking advantage of the low price environment to strengthen strategic reserves. China’s growing “guns vs butter” investment shift isn’t likely a bearish sign for crude oil, either. The IEA and EIA’s production growth estimates both suggest that the market isn’t going to elastically respond to lower crude prices, in essence saying that lower price will not drive higher consumption for the first time ever AND despite the surprise increase in consumption in 2015   SCORE: NOT a Driver. Russia’s Ability to Add Global Production Russia found itself in a fun position in 2015 as economic sanctions hammered the ruble down 50%. Essentially, Russia had a half price drilling environment and was effectively hedged by its cratering currency because it pays for new wells in rubles and sells its crude in dollars. This advantage doesn’t exist at  commodity prices this low . Russia isn’t likely to spend a buck to get back 20 cents in the first year. SCORE: NOT a Driver. OPEC’s Inscrutable Strategy Forget all the rest of the “Pick 6”. If anyone assumed OPEC wasn’t in charge of global oil prices, they were dead wrong. And by OPEC, let’s be honest and say Saudi Arabia. Only Russia, Saudi Arabia, and the US technically have the production base to unilaterally affect the price of crude without completely undermining their net production rates, and the US regulatory environment is focused on efficiency and safety and not price, because, alone of these three, the US until recently was thought to be a net beneficiary of low priced crude oil. Saudi Arabia, tired of being the only player ceding market share in an organization comprised of members that continually and habitually cheat on their production allotments, is  flexing their global geopolitical muscle  to enforce their control over the organization and to affect the amount of money available to global E&P projects in light of the new beta in crude oil pricing that is recognized today. So, as a result, the US finally sees production declines of the celebrated unconventionals; Iran and Russia are starved of cash, along with the rest of the OPEC members, some to the point of existential crisis. How big a stick does Saudi Arabia wield right now? Very big, I think. So what about the US oilpatch? The global price of crude is as ridiculously priced today as it was at $120 per barrel. A 2% oversupply in a world where we cannot even measure within 5% with any certainty drops the price of crude over 70% and has every analyst that claimed just 2 years ago that we would never see crude below $100 again now claiming that we won’t see oil above $40 anytime soon. They were wrong then, and they are wrong now. Image Source: http://www.bloomberg.com/news/articles/2016-01-18/oil-speculators-raise-bets-on-falling-prices-to-all-time-high What IS different is that the cost of capital in the US has gotten much higher. That won’t be changing soon. Banks and other lenders have already started changing the cost of capital. Warrants are being demanded at closings. Even when oil recovers, this will not change rapidly. Watch the industry get a lot better, because their breakeven for cost of capital will have gotten worse. The oilfield service sector has suffered more than a glancing blow. It will not be able to ramp up as quickly as it was laid down. A lot of its equipment is shot for lack of proper maintenance. The Fed is reported to be advising banks to push for asset liquidation in lieu of bankruptcy. This is actually a good idea if the point is to preserve value for lenders and equity holders. There is nothing more damaging to producing oil and gas assets as a bankruptcy trustee. Great for the eventual acquirer, bankruptcy trustees know how to make sows ears from silk purses by their reluctance to fund what Texas Independent Producers and Royalty Owners (TIPRO) chairman Raymond Welder calls the “recurring, non-recurring” expenses such as workovers necessary and common in the oilfield. http://everythingshale.com/news/2016/january/21/the-price-of-oil-looking-ahead-without-all-the-noise/ http://everythingshale.com/news/2016/january/21/the-price-of-oil-looking-ahead-without-all-the-noise/ Thu, 21 January 2016 13:00:37 http://everythingshale.com/news/2016/january/21/energy-news-roundup-navy-launches-biofuel-voyage-exxon-charges-devon-announces-layoffs/ The US navy on Wednesday launched its first carrier strike group powered partly by biofuel a mix made from beef fat, calling it a milestone toward easing the military's reliance on foreign oil. [ The Guardian ] California's attorney general is investigating Exxon Mobil on whether the company lied to the public and shareholders about the risks of climate change. [ The NY Times ] Devon Energy Corp. executives said Wednesday they are planning layoffs over the next few months. [ NewsOK ] http://everythingshale.com/news/2016/january/21/energy-news-roundup-navy-launches-biofuel-voyage-exxon-charges-devon-announces-layoffs/ http://everythingshale.com/news/2016/january/21/energy-news-roundup-navy-launches-biofuel-voyage-exxon-charges-devon-announces-layoffs/ Thu, 21 January 2016 12:00:26 http://everythingshale.com/news/2016/january/21/why-data-analytics-must-be-part-of-your-next-infrastructure-project/ It used to be that the quality of infrastructure was measured by its lifespan. Water systems might last a century, and power plants at least half that. Those were measurements of solid assets, well worth the investment. But today, dependable infrastructure is just not enough. While it must be resilient and have an extended life cycle, now it must also be intelligent and communicate with other systems in ways that were unknown only a few years ago. Together, community leaders are going to build a smart city , and that's going to take a whole number of players, from transportation, water, the electric grid, telecommunications, and from the public and private sectors to come together,†said Fred Ellermeier, Vice President and Chief Operating Officer of  Smart Integrated Infrastructure for Black & Veatch. You'll be converging all of these systems into one they'll be working in harmony together.†This changing landscape the convergence of multiple systems has led to the creation of Black & Veatch's Smart Integrated Infrastructure (SII) business. As the smart cities movement sweeps across the globe, it will change the way utilities view the future. Smart Integrated Infrastructure starts with infrastructure that has built-in intelligence. This intelligent infrastructure produces high volumes of data that provides substantial opportunities to be leveraged,†Ellermeier said. The next dimension of SII is data analytics, and we've built a smart analytics platform called ASSET360â„¢ that is already making life easier for utilities and communities.†ASSET360 gathers and analyzes vast amounts of data to help users understand their system's behavior and make more informed decisions. The cloud-based platform applies a wide range of math and visual tools to assure that the needed actions are identified and taken. It eliminates the guesswork. You find out what is going on in your system that you would not be able to detect with the natural eye or the natural mind,†Ellermeier said. Analytical Solutions for Operations and Planning ASSET360 provides two key types of analytic solutions: Operational Intelligence and Adaptive Planning, Ellermeier said. Operational Intelligence provides the day-to-day insight into current performance with a focus on increasing efficiency and reliability of operations. Information is conveyed through web-based portals and dashboards. Operational Intelligence supports monitoring and diagnostics functions that can alert a user to potential issues and help determine causes and impacts. For instance, early problem detection allows utilities to replace or fix parts before a full failure or outage occurs. Adaptive Planning helps users make more informed planning decisions using scenario analysis and predictive analytics. These tools use historical and current data, along with forward simulations, to help users understand asset maintenance, long-term capital expenditures, compliance and other planning scenarios. This helps users to prepare for the coming months, years and decades. Much of today's planning involves integrating smart city concepts to expand sustainability, resilience and efficiencies of operations, Ellermeier said. Smart Integrated Infrastructure is about converging these two components smart infrastructure and smart analytics and bringing them into high-end solutions for our clients,†he noted. Key Drivers for Intelligent Infrastructure Scott Stallard, Vice President and Director of Smart Analytics for SII, noted that distributed generation , microgrids and energy storage are types of intelligent infrastructure solutions that will be deployed at scale in the near future. We're moving from a centralized production system into a very distributed, very diverse set of assets and owners, and these assets need to work and effectively scale together,†Stallard said. We're talking about an infusion of cash into our infrastructure systems that will fundamentally reshape how these industries act and perform.†Distributed generation is forcing the electrical grid to be much more fluid and intelligent, while enabling deeper contributions from renewables. There's this bilateral opportunity to trade energy produced locally at a customer site back to the grid and, conversely, share energy from the grid when the customer needs it,†Stallard said. That interactive component is the reality of where we're heading in the energy space. What used to be a fairly decoupled issue is now highly interrelated.†Savings in Operations Through Smart Analytics Stallard added that significant savings in operational expense are possible once utilities are able to see deeply in their systems. It really starts with the idea of transparency you can't act on what you can't see,†he noted. Within a big, complex system, that 5 or 10 percent of what could be eroding profitability might not be visible without this information.†He said the emphasis within ASSET360 is always looking for information that can lead to actionable decisions. You can develop strategies to take action to improve performance, to remedy equipment that's not performing correctly, to understand how emerging issues are affecting capacity or reliability. Once armed with that, then you can save significant money both in terms of operational costs and as well as replacement costs.†Planning with a Long-Term View Stallard said it is reasonable for utilities to plan for the next 10, 25, or even 35 years. This is due to increasing renewable portfolio standards being implemented by most states, thereby boosting the use of wind, solar, geothermal, biomass and other energy alternatives. For instance, Black & Veatch has been assisting the Hawaiian Electric Company (HECO) with its long-term planning, as the utility seeks to develop its approach toward reaching the state government's goal of using 100 percent renewable energy by the year 2045. We've used ASSET360 and its Adaptive Planning capability to help HECO evaluate and compare alternative approaches,†Stallard said. In mapping out strategies to the year 2045, it is critical to leverage the power of the platform and the cloud to explore a very wide range of options. Our predictive analytics engines are able to identify feasible, cost-effective, and environmentally sound options. This enables HECO to make informed decisions about changes they need to implement in their grid so that they can fully meet their customers' needs as their generation becomes more and more distributed. That's what the predictive side of analytics can do for you.†The issue becomes even more complex when considering that power must always be available, regardless of infrastructure changes. We're talking about a massive transformation, massive substitution of technologies, and yet they have to continue to produce energy and serve their customers through the transition,†Stallard said. We're able to demonstrate the value of exploring a wide range of options. They can then understand the plusses and the minuses of different choices around technology, investments and operational goals.†Stallard said while most utilities are not looking to convert to 100 percent renewables, many are looking for best ways to leverage existing coal assets, which are rapidly becoming marginalized. Transition planning is still vital in this case, it's a question of how to make the best of a challenging situation. For some, coal might be reduced to a secondary level for energy production relative to natural gas, and combined cycle plants are really becoming the foundation of the centralized generation,†he said. So it may be the investment profile of coal assets needs to change because the roles are changing, and likewise, they've got gas assets that need to be looked at differently because those roles and values are also changing.†Similar challenges exist for water utilities, as aging infrastructure and new technology options allow for more efficient water production, distribution and utilization. We are seeing similar opportunities in water for infrastructure to become more intelligent and responsive to changing water resource needs,†Stallard noted. This is being driven by changes in regulations, diminished water supply, and demanding water run-off/reuse issues.†The Smart City Transformation It is the ongoing transformation of the utility industry that is driving the need for Smart Integrated Infrastructure, with its smart analytics capabilities. Black & Veatch recently added a new application to ASSET360 called the Smart City Accelerator, which helps cities identify smart projects based on feasibilities, risks, benefits, costs and tradeoffs with a wide variety of investment options. It can score various strategies against metrics defined by the user. It is also highly interactive, allowing the many metrics to be assessed across years and decades at the push of a button. The modernization of the city is generally taking place element by element, with each element becoming smarter, but without directly looking at how these different elements are going to fit together,†Stallard said. Ultimately, the vision of a smart city is that all of these systems are operated in harmony, and that needed information is shared between systems.†He said the goal is to modernize the electric grid and create intelligent infrastructure in order to increase resiliency and to improve the quality of life. As cities become more densely populated and as associated economic benefits move to the forefront, these smart digital devices will allow us to fundamentally transform how problems are solved.†Editor's Note: This is the first part of a five-part series on smart cities that can be found in the Solutions Online library on bv.com . By Gordon Heft, Black & Veatch  Published originally on Black & Veatch Solutions http://everythingshale.com/news/2016/january/21/why-data-analytics-must-be-part-of-your-next-infrastructure-project/ http://everythingshale.com/news/2016/january/21/why-data-analytics-must-be-part-of-your-next-infrastructure-project/ Thu, 21 January 2016 09:00:20 http://everythingshale.com/news/2016/january/21/methane-emissions-in-pa-continue-to-drop-as-natural-gas-production-increases/ Pennsylvania Governor Tom Wolf held a Town Hall meeting on social media this week to discuss air emissions, climate change and a new proposed set of regulations targeted at the methane emissions from the natural gas industry. But what wasn’t really discussed is how voluntary best management practices across the Marcellus Shale have already led to a substantial drop in methane emissions in the Commonwealth. Marcellus Shale Coalition President David Spigelmyer explained this to the Pittsburgh Tribune-Review : “ These positive results are a function of the industry’s widespread use of operational best practices and continuous investments aimed at protecting and enhancing our environment . We welcome Gov. Wolf’s efforts to expand new manufacturing opportunities in the commonwealth through affordable homegrown natural gas and are committed to working with lawmakers as well as state officials to focus on common-sense policies that encourage job-creating natural gas development.” In fact, the latest Department of Environmental Protection (DEP) air emissions inventory , which included data from 2013 and was released in April 2015, showed that methane emissions were down 13 percent since 2012 — all while natural gas production increased . Further, in May 2015 researchers at Drexel University released a study that low levels of air emissions at well sites across the Marcellus Shale. From that study : “Most notably, we did not observe elevated levels of any of the light aromatic compounds (benzene, toluene, etc.) that have previously been observed in oil and NG operations. With the exception of CH43OH, which was observed at one compressor station and has been observed at NG well pads, all of the other VOCs detected have been attributed to on-road engine exhaust.” (Page E; emphasis added) The study also explains: “Additionally we have shown that in contrast to other unconventional NG resources there are few emissions of nonalkane VOCs (as measured by PTR-MS) from Marcellus Shale development .” (Page H; emphasis added) The trend of emissions reductions has continued to improve each year, as the 2012 inventory showed. For that inventory, DEP also highlighted that the total emissions reductions, which have not only decreased during production, but additionally because of the increased use of natural gas in electricity generation, represented “ between $14 billion and $37 billion of annual public health benefits .” Then DEP Secretary, Chris Abruzzo, went on to say: “It is important to note that across-the-board emission reductions … can be attributed to the steady rise in the production and development of natural gas , the greater use of natural gas , lower allowable emissions limits, installation of control technology and the deactivation of certain sources.” (emphasis added) Most notably, the U.S. Environmental Protection Agency (EPA) released its Greenhouse Gas Inventory  in April 2015, which showed a dramatic decline in methane emissions across the country from natural gas production in recent years. According to the EPA, methane emissions from natural gas production have fallen 38 percent since 2005 at the same time that U.S. natural gas  production increased by 26 percent . Further it’s precisely because of our production of natural gas that Pennsylvania’s greenhouse gas emissions have also plummeted. As DEP Secretary, John Quigley, noted during the Town Hall: “And again, natural gas is one of the most important reasons why Pennsylvania’s greenhouse gas emissions have fallen 20 percent since 2007 .” ( 23:03 ) And the EPA’s October inventory showed a 13 percent decrease in emissions from 2011 to 2014 from both the petroleum and natural gas systems sector, as the following chart shows: Secretary of Energy Ernest Moniz has even said : “About half of that progress we have made [on greenhouse gas emissions] is from the natural-gas boom.” And the Intergovernmental Panel on Climate Change also actually credits hydraulic fracturing and natural gas as the causes for the United States’ dramatic reduction of greenhouse gas (GHG) emissions: “A key development since AR4 is the rapid deployment of hydraulic fracturing and horizontal drilling technologies, which has increased and diversified the gas supply…is an important reason for a reduction of GHG emissions in the United States.” (Ch. 7,  p. 18 ) What’s more is the increased use of natural gas in power generation has led to a 20 year low in carbon emissions, according to a 2015 Bloomberg New Energy Finance report . In fact, on an emissions rate basis the report declared that “2015 will be the cleanest year in over 60 years for which we have historical data.” At the end of the day it is clear that Pennsylvania’s natural gas industry is making great strides to reduce methane emissions—and like the other trends seen across the country—has been successful in doing so. Meanwhile, it’s because of our increased use of natural gas that greenhouse gas emissions have substantially declined. That’s a win-win across the Commonwealth. http://everythingshale.com/news/2016/january/21/methane-emissions-in-pa-continue-to-drop-as-natural-gas-production-increases/ http://everythingshale.com/news/2016/january/21/methane-emissions-in-pa-continue-to-drop-as-natural-gas-production-increases/ Thu, 21 January 2016 07:29:00 http://everythingshale.com/news/2016/january/21/the-oil-big-five-what-news-is-good-news-for-oil-in-2016/ Welcome to the first version of The Oil Big Five for 2016, when we round up some of the biggest news and trends from the global oil industry and think to ourselves: Wow, things sure have changed since our first post . But then, that’s oil for you: Things are always changing, and yet some things remain the same. We asked our oil editors and analysts around the world for what they think are outstandingly important drivers in the markets, and these are items they chose, in no particular order. This is also your chance to weigh in. Tell us in the comments whether any of these topics ring especially true to you, or whether we’ve neglected some other topic that you think is really interesting or has the potential to shake markets. You can also find us on Twitter @PlattsOil and can share your thoughts on this post with the hashtag #oilbig5 . 1. US crude exports — to Europe Last month, the newly unfettered access of US crude oil to global markets made our list, but that’s not the end of the story. One senior editorial leader here said, “The Big Five should really become the Big One this month, all about US crude exports.” While many wondered whether somewhat dubious economics would hobble exports, it turns out that the WTI/Brent spread doesn’t solely determine whether shipments will hit the open seas , and the first cargo of US crude set sail before 2015 closed. Furthermore, European refiners, which have been on a bit of a tear this year with crack spreads , are now eyeing attractive gasoline and naphtha cracks that could help drive up demand for US light sweet crude and condensate. On the other hand, European refiners have been spoilt for choice recently . So can European demand for US crude last? Blog post continues below… Request a free trial of: Market Data Direct   Platts Market Data Direct helps you access and interpret our energy, petrochemicals, metals, shipping and agriculture data faster and easier than ever. Saving you time and effort, an API streams real-time prices, historical and reference data directly from Platts and integrates them into your proprietary systems. Alternatively, you can access our data via an intuitive Excel plug-in, which speeds up your searches and simplifies data interrogation. 2. Western Canadian crude prices and production While the light sweet crude of the US shale plays gets a lot of attention, heavy Canadian crudes rule much of North America and are dealing with some significant pressures. The US dollar price of Canadian heavy has dipped below $20/b for several grades so far in January. Canadian heavy benchmark Western Canadian Select, an unconventional heavy sour, hit $19.82/b January 8, the lowest outright price since Platts started assessing it in April 2006. (The WCS price was alarming the market back in August at $27.47/b , too.) As a result of the price pressure, some companies are pushing up maintenance, and there’s been talk that production could be shut in. Winter is traditionally a period of peak activity in Western Canada, with an average of 530 rigs in operation during a “good” winter drilling season in Alberta, Saskatchewan, Manitoba and British Columbia. But for the week ended December 18, that figure was 158, according to data from the Canadian Association of Oilwell Drilling Contractors. Will prices stifle production this winter, and if so, who could feel the impact most keenly — conventional and heavy producers, or oil sands players? 3. North Sea spot market backwardation Despite generally weak crude values, physical differentials in benchmark North Sea crude oil grades saw big swings in January, with bids and offers for neighboring cargoes showing a wide divergence in values; a dual market seems to be emerging in the region. January loading cargoes were bid at a significant premium to February loading cargoes of the same grade, meaning there’s backwardation in the spot North Sea market while the rest of the physical and financial crude complex is trading in contango. What gives? PetroIneos, a joint venture between Ineos and PetroChina, became the largest bidder for North Sea crude in the Platts Market on Close Assessment process and bidding for January-loading cargoes 34 times as of January 7, compared with seven bids for December-loading cargoes and no bids for November-loading cargoes. Traders told Platts that PetroIneos’ buying interest appears focused on specific dates, different crude grades than usual for the company, as well as on January-loading cargoes held by Shell. One of our crude managing editors put it into perspective, saying, “This looks at a huge trend in crude buying in the North Sea which was quite controversial, and which demonstrated a very different structure for the January Brent market than that seen for other months.” Is this something that will continue through the rest of January and the winter? Will PetroIneos continue its bidding, or will it back off? And what could prompt the North Sea market to fall back in line with the larger crude complex? 4. US Gulf Coast vacuum gasoil Refined oil products along the US Gulf Coast are at multiyear lows — as are products around much of the world — and it’s a good time to remember that crude isn’t the only input to start the refinery process, one managing editor said. VGO producers in various parts of Europe and Russia are traditionally long in the product, and market sources in the US are reporting cargoes of feedstock are coming to US shores regardless of whether there’s demand or open arbitrage opportunities. VGO is used to make gasoline, among other things, but while gasoline demand is strong , outright prices are also dipping under $1/gal . On January 15, VGO barges at Houston fell on news that there will be a US-bound cargo coming from Colombia, and high-sulfur VGO has held value or fallen 25 of the last 26 trading days. Looking later in the year, a new Russian refinery is expected to add to the Transatlantic flow of VGO. “I guess people are getting a real shock with ships entering Gulf Coast waters unsold,” a European feedstocks trader said to Platts. “I think now there is a sudden realization that this market is not in good shape.” Will VGO values continue to fall as potentially more cargoes stack up in the Gulf of Mexico, and what sort of ripple effects could this have on downstream gasoline or diesel? 5. The Saudi-Iran conflict’s impact on oil prices The worldwide glut of crude oil means that the way markets respond to news is much different than in the past, as we noted on The Oil Big Five in February 2015 , when Saudi Arabia’s King Abdullah died. We got a reminder with the new year, when a conflict between Saudi Arabia and Iran didn’t send prices soaring as it may have in years gone by. International oil prices were momentarily lifted , but analysts don’t view the escalated tensions between the two countries as threatening to the global oil supply anytime soon. Together the countries account for 13 million b/d of global oil output, but as we’ve noted before, OPEC members are battling for market share both among themselves as well as within a larger world of well-supplied producers. So what would it take for global oil prices to lift significantly? What sort of news could bump up prices and, more impressively, keep them up? http://everythingshale.com/news/2016/january/21/the-oil-big-five-what-news-is-good-news-for-oil-in-2016/ http://everythingshale.com/news/2016/january/21/the-oil-big-five-what-news-is-good-news-for-oil-in-2016/ Thu, 21 January 2016 05:01:31 http://everythingshale.com/news/2016/january/20/achieve-operational-excellence-with-enterprise-asset-performance-management/ Organizations today are focused on improving efficiency throughout every area of the business. From an asset management perspective, they’re leveraging the Industrial Internet of Things and analytics to keep equipment running safely for as long as possible. With limited capital and operational budgets, this is accomplished with a comprehensive Enterprise Asset Performance Management (APM) solution . Enterprise APM enables organizations to exceed safety, reliability, and performance goals through data collection and analysis coupled with actions and optimization for proactive and predictive maintenance execution. As a result, plant personnel are empowered to act before costly equipment failures occur. Enterprise Asset Performance Management solutions integrate all the various elements of a comprehensive maintenance program, making valuable information accessible and delivering context for smarter decisions. It requires a broad portfolio to collect data on assets, analyze it, determine the next course of action and use that action to further refine and optimize processes. The end goal is to deliver the greatest economic return for all asset types. This is made possible by integrating various technologies and devices, and applying advanced analytics to determine where improvements should be made. Benefits span all functional areas from strategic, to operational, to financial and safety. Operational benefits can be achieved through the early identification of equipment problems to reduce or eliminate unplanned downtime. Engineers can spend less time sifting through raw data and spend more time improving the reliability and performance of the assets that drive the profitability of the company. There are financial and safety benefits to be achieved through increased asset utilization and reduced downtime, as well as the opportunity to identify equipment problems before a major failure causes significant or catastrophic damage. Schneider Electric offers the most comprehensive Enterprise APM solution that manages the collection of data from any number of sources, incorporates advanced analytics technology that combines machine learning with analytic rules and provides a complete enterprise asset management platform to manage asset lifecycle and maintenance processes. It also includes a variety of interactive visualization capabilities for presenting this information in intuitive ways on mobile devices and platforms. Using the Enterprise APM solution, organizations can monitor their assets to identify, diagnose and prioritize impending equipment problems – continuously and in real time. Learn more about the comprehensive Enterprise Asset Performance Management solution  in this paper . The post Achieve Operational Excellence with Enterprise Asset Performance Management appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/january/20/achieve-operational-excellence-with-enterprise-asset-performance-management/ http://everythingshale.com/news/2016/january/20/achieve-operational-excellence-with-enterprise-asset-performance-management/ Wed, 20 January 2016 23:58:48 http://everythingshale.com/news/2016/january/20/the-dying-embers-of-britain-s-blast-furnaces/ Blast furnaces across the UK are under threat as the steel industry bounces from one crisis meeting to another. And, as the last flames in the furnaces flicker in the headwinds, commentators are scrambling to find out what has gone wrong. China is the easiest fall guy with its huge increase in low-priced exports flooding the international markets. But the scaling back of the British steel industry is as much down to historical bad decision-making as it is the current threat of foreign competition. Indian-based Tata Steel is the largest producer in the UK, having taken on many of the British steel assets when it bought the European operation, formerly known as Corus, for a whopping £6.2 billion in early 2007. The UK division of that business is now a forlorn shadow of its former self with headcount diminished and many of the assets mothballed. The company announced a further 1,050 job cuts Monday with the majority of jobs to be cut located at its blast furnace-based Port Talbot plant in south Wales. Talks are ongoing regarding the sale of its long products division, centered around two active blast furnaces in Scunthorpe, the assets of which have had their value written down to zero. Sources close to the negotiations with Greybull Capital suggest that if Tata cannot sell the division by the end of March, then operations will be halted as the Indian parent company finally loses patience. With the liquidation of the Teesside slabmaking business, SSI UK, in October last year, one of Europe’s largest furnaces was rendered another relic of a former industrial powerhouse. Undoubtedly it will face the same fate as Ravenscraig, a giant symbol of Scottish steelmaking that was closed in 1992 and demolished in 1996. Sources suggest Port Talbot may itself run out of funding without a radical restructuring to restore profitability, hence this announcement of further job cuts. The current chapter in the story of the British steel industry is one of accelerating rationalization as businesses find it increasingly difficult to compete in one of the world’s most globalized industries. But why is the UK, once the giant of the industry, such an uncompetitive place to produce steel? Blog post continues below… Platts Global Metals Awards   The 2016 Platts Global Metals Awards is taking place on May 19th at the Marriott Grosvenor Square in London. This Awards program offers 14 categories both for business and individual achievement. Most companies self-nominate and multiple nominations are encouraged. It’s simple and free, so nominate now. The deadline for all entries is February 29th. Contact Amanda Wolz directly to discuss categories and content ideas at Amanda.Wolz@platts.com or on +1 720 264 6840. Nominate Now The commentariat points the finger at imports, energy costs, business rates and government procurement policies. While these factors are accelerating deindustrialization, there are more crucial deep-rooted reasons why once proud production sites appear impotent in what are now critical times for the sector. Throughout the escalation of this crisis, politicians and trade unions have called on the state to intervene. State intervention, much like protectionist trade measures, is booming in the global steel industry as governments look to save jobs. The shadow chancellor John McDonnell used Italian steelmaker Ilva, Europe’s largest steel production hub, as a case study for positive state action. “The ­government intervened, they took over, they invested and turned the situation around,” he said. In reality, the financial backing of the heavily-indebted steelmaker meant the company could lower sales prices without risk of bankruptcy. Tata Steel is among a host of companies competing with Ilva in Europe and it suddenly faced the prospect of competing on price with a huge local mill selling at Chinese prices. This drove the market down and hammered the margins of much of the European industry. Even European steel producers’ association Eurofer has complained to the Commission about Italian aid for Ilva, saying it is against state-aid rules. Tata Steel’s UK division suffers from legacy issues relating to its own former days as a state-owned, bureaucratic behemoth whose commercial decisions were influenced by political pressures. The reason Port Talbot is such a production hub dates back to British Steel’s desire to shift investment and jobs to south Wales. This was as a result of a need to bring jobs to a particularly poor region suffering from high unemployment rather than any apparent commercial benefits. The Teesside production site has a large dock and a huge blast furnace allowing it to benefit from economies of scale in both its production process and deliveries of raw materials. However, investment shifted away and the site was mothballed before its resurrection under Thai ownership. This strategic misstep of spreading production facilities is critical in understanding Tata’s current difficulties in such a thin margin environment. The company’s recently mothballed Scottish plate mills are supplied with slab cast miles away in Scunthorpe. The plate is then freighted back to the West Midlands where its main distribution hub is located. Liberty Steel, the company behind the revival of another south Wales rolling mill, plans to buy the Scottish mills and supply them with competitively priced slab on the merchant market. It is likely the scale of the production would also be reduced to tailor the needs of the market, rather than the needs of government to provide jobs. The subsequent privatization of British Steel presented new problems, with independent ports adding extra margin pressure with their cargo discharging costs significantly higher than those seen on the continent. The direct comparison is Tata’s other major European production hub based in Ijmuiden, Netherlands. This unit of the business produces more steel, has its downstream operations on site and state-of-the-art technology after investment was centred on a single location. It seems increasingly likely Tata will base its future operations at this division. The UK industry is fragmented but the demand for steel means there is a future for steel processing companies. However, it appears the iconic blast furnaces, and the huge number of jobs that come with them, will soon be nothing more than ashes and dust. A future for EAFs? Perhaps electric arc furnace-based production has a future in the UK. The country has a reservoir of scrap; currently most of this is shipped to Turkey and Asia, which could be melted in domestic furnaces — as happens at Celsa. Liberty, which is becoming the darling of the UK industry, continues to invest heavily in the steel industry. After restarting its hot strip mill in Newport, where it also says it will begin remelting, it has acquired a slew of assets from the stricken Caparo Group and is also in talks with Tata and Greybull over the Scottish plate mills. Unlike Tata, Liberty has acquired all of its assets in a very tough market, and subsequently paid cheaper prices. Therefore it will not have to keep up high debt payments — Tata’s misery was compounded recently by a credit rating cut by Standard & Poor’s. (Standard & Poor’s, like Platts, is owned by McGraw Hill Financial.) Liberty has also invested in a power station in Newport, which could theoretically reduce costs by supplying the steelworks, and is buying downstream assets such as Caparo’s tube business, guaranteeing it a market for its coil. Others have taken this tack in the UK, notably Thamesteel and Celsa, to varying degrees of success; Thamesteel went out of business after one of its wholly owned fabricators ran into financial difficulty, and amid a lack of support from its parent company. Celsa is still running, but the company’s financials are always a source of keen debate in the close-knit UK market. http://everythingshale.com/news/2016/january/20/the-dying-embers-of-britain-s-blast-furnaces/ http://everythingshale.com/news/2016/january/20/the-dying-embers-of-britain-s-blast-furnaces/ Wed, 20 January 2016 23:01:34 http://everythingshale.com/news/2016/january/20/new-anti-fracking-group-just-a-relaunch-of-old-so-called-local-campaign/ A pair of Washington D.C. based political activist organizations appear to be rebranding their Colorado anti-fracking campaign by launching a “new” group called the League of Oil and Gas impacted Coloradans, or LOGIC. Put simply, LOGIC is just the latest attempt by nationally focused groups, Clean Water Action and the Clean Water Fund , to put a “Colorado” face on a national agenda. A report from Complete Colorado provides the details on how these groups are simply relaunching their old campaign, “Fracking Front Lines” , (an effort to pressure Colorado’s oil and gas task force), under a new name. From Complete Colorado : “Today, heading into the 2016 election, the Fracking Front Lines campaign has relaunched under a new name: The League of Oil and Gas Impacted Coloradans (LOGIC). It is led by Sara Lu – also known as Sara Lu Loflin – the same Clean Water Action and Clean Water Fund operative who was in charge of Fracking Front Lines. As you might expect from a newly launched anti-fracking group in Colorado, LOGIC immediately denied being anti-fracking. “We are not pro-or anti-fracking,” LOGIC declared in a statement and again in an interview with The Colorado Independent . Clearly, anti-fracking activists in Colorado must be hoping public officials and the press can’t remember what happened two years ago.” Despite Loflin’s claims to be neither “pro-or anti-fracking,” her history shows that she may be taking a more aggressive stance against fracking as LOGIC’s executive director than she is letting on. Writing in a Spring, 2014 Clean Water Action newsletter , Loflin said: “Right now, the oil and gas industry is spending a fortune on TV and radio ads, trying to convince Colorado voters that fracking is safe and necessary for Colorado jobs and ranchers, when the truth about this water-intensive, polluting practice is something else altogether.” Later, Loflin was a key figure in the “Fracking Front Lines” campaign that was launched to counter overwhelming support for oil and gas development from citizens, civic leaders and the business community during hearings of Colorado’s oil and gas task force. Arguing that “fracking is infringing on our freedoms and disrupting our lives,” the campaign’s website featured nine personal stories, and urged the public to “[t]ell our lawmakers some things shouldn’t be fracked.” Now, it appears that LOGIC plans on deploying similar tactics. From LOGIC’s website : “The League of Oil and Gas Impacted Coloradans (LOGIC) seeks to elevate the voices of Coloradans around the state living near current and proposed oil and gas operations” But with close ties to national organizations, LOGIC’s attempts to appear local may backfire because the Clean Water Fund is obviously a  national group with headquarters in Washington, D.C. Further, the Clean Water Fund and its affiliated group, Clean Water Action, have taken a hit to their credibility after they joined   other “ban fracking” activists in playing politics with Colorado’s historic floods in 2013 by making misleading statements to the media in an attempt to scare the public about the impact of oil and gas operations in the flood zone. They were even singled out by Denver Post  editorial page editor Vincent Carroll who wrote in a column titled “The shameless use of Colorado’s floods to attack drilling.” Carroll writes : “[A]nti-fracking groups swiveled into combat mode almost immediately, raising alarms about the quality of planning by regulators and energy companies. It would be inspiring to see representatives of Clean Water Action and Earthworks, who were quoted in a Denver Post article, offer constructive ideas for the next epochal deluge if their credibility weren’t undercut by pervasive anti-drilling bias. Clean Water Action, for example, has supported fracking bans or moratoriums in several states as well as anti-fracking events here. Its idea of sound planning is apparently an industry shutdown.” Yet even as LOGIC is seeking to refocus and expand their interests in the state, they may find that a majority of Coloradans overwhelmingly supports oil and gas development. In fact, recent polling commissioned by the American Petroleum Institute and the Colorado Petroleum Council found that, in Colorado, 95 percent of Republicans, 84 percent of Independents, and 69 percent of Democrats consider “producing more oil and natural gas here in the U.S.” important to them. And with the industry continuing to provide significant economic benefit to the state, logic says that Colorado LOGIC has a lot of work to do. http://everythingshale.com/news/2016/january/20/new-anti-fracking-group-just-a-relaunch-of-old-so-called-local-campaign/ http://everythingshale.com/news/2016/january/20/new-anti-fracking-group-just-a-relaunch-of-old-so-called-local-campaign/ Wed, 20 January 2016 16:43:01 http://everythingshale.com/news/2016/january/20/watch-our-co2-drop/ Last Tuesday, President Obama gave his final State of the Union address to Congress. Part of his speech focused on the exciting advancements being made in our energy sector, from the great strides that renewable technologies are taking towards deeper market penetration, to the drastic improvements in our nation's energy independence, to the many jobs created to support these growing industries. At one point, he got into brass tacks about some pretty impressive numbers: “And meanwhile, we've cut our imports of foreign oil by nearly 60 percent, and cut carbon pollution more than any other country on Earth.” Let's dive into those CO2 numbers to understand more. President Obama was not kidding when he said that we've reduced carbon pollution more than any other country on earth. It’s not even close. The U.S., highlighted in green above, has reduced by four times as much carbon as its nearest neighbor. If you were like me, you were surprised to see how drastically the U.S. has reduced its CO2 emissions compared to other countries. What's going on there? A skeptic may point out that the U.S. has more than 300 million people, and therefore can be expected to have a much higher total amount of additions or reductions. If a tiny country made cuts — even really big ones — to their carbon emissions, it couldn't match raw numbers with a big country like the U.S. So let's take a look at global carbon dioxide reductions per person. This will give us a normalized metric to work with for all countries. Clicking over to Per Capita CO2 Emissions,†we still see some good news. Though the U.S. isn't the leader anymore, it still has reduced its carbon pollution per person more than 90 percent of other countries. We've reduced our CO2 per person at almost twice the rate of our friends across the pond, the United Kingdom, and three times the rate of our neighbors to the north, Canada. These are all good signs for the U.S. If you want to learn more about the importance of reducing our carbon pollution, read our recent report about how climate change threatens our energy infrastructure . Curious about the total amount of carbon we emit into the atmosphere? Check out this recent graphic that shows how we stacks up to other countries. http://everythingshale.com/news/2016/january/20/watch-our-co2-drop/ http://everythingshale.com/news/2016/january/20/watch-our-co2-drop/ Wed, 20 January 2016 16:00:27 http://everythingshale.com/news/2016/january/20/us-interior-review-will-likely-find-ways-to-fix-federal-coal/ The US Interior Department announced January 15 that it is going to “review” the Bureau of Land Management’s leasing program of federal lands upon which an estimated 41% of all US coal is currently produced, and is putting a hold on all new lease applications while the three-year review is underway. The announcement raised immediate suspicions in some quarters that the department was angling at more than a mere review of leasing procedures, a possible royalty fee hike and a benign moratorium on future leases. At the very least, the announcement was seen as a shot across the bow of coal production in the US. The Secretary of Interior, Sally Jewell, said the department wants to “identify and evaluate” potential reforms to the federal coal program “in order to ensure that it is properly structured to provide a fair return to taxpayers and reflects its impacts on the environment.” Jewell also called the review “another step” along the path that President Barack Obama announced in his recent State of the Union address to improve the way the US manages its fossil fuel resources “and move the country towards a clean energy economy.” Jonathan Downing, the executive director of the Wyoming Mining Association, was emphatic in his response. “This is yet another salvo in the president’s efforts to kill the coal industry. He and his allies in the extreme environmental movement know full well that this measure will make federal coal uneconomical to mine, thereby locking up America’s most abundant and reliable source of electricity generation.” Downing added that coal remains a main source of baseload power in the US, one that renewable generation such as wind and solar is “unable to provide regardless of the billions in federal subsidies currently being funneled their way.” Blog post continues below… Request a free trial of: Megawatt Daily   Megawatt Daily provides detailed coverage of power prices in major US and Canadian electricity markets, up-to-date information about solicitations and supply deals, and information about complex state and federal power regulations. Coal squeaked past gas for power gen in 2015 Even as it has been rearranging generation portfolios, retiring coal-fired facilities and switching from coal to gas, the US power sector nonetheless has an enormous stake in the Interior Department’s review. Literally hundreds of generating firms and utilities are big coal buyers. In 2015, coal fueled 33.8% of all power generation, compared to 32.6% by natural gas, according to data released January 12 by the Department of Energy’s Energy Information Administration. Moreover, the Interior Department said Friday that 14% of the country’s electricity was generated by federal coal. Total coal production in the US in 2015 was 890.5 million short tons. The electric power sector consumed 754 million short tons of that total. In fiscal year 2014, 402 million short tons of coal were produced on federal lands. According to the Interior Department, the Bureau of Land Management has responsibility for coal leasing on 570 million acres “where the coal mineral estate is owned by the federal government.” As of fiscal year 2014, there were 310 federal coal leases that encompassed 475,692 acres in 10 states that had recoverable coal reserves of 7.75 billion short tons. The BLM receives revenue from coal leasing from bonuses paid at the time it issues a lease; rental fees; and production royalties. In 2015, according to the BLM, its coal program had taken in about $1.29 billion in royalties, rents and bonuses. The Powder River Basin as the federal coal epicenter Pointing to the huge Powder River Basin coal producing area in Wyoming and Montana, the Interior Department noted last week that over 85% of all federal coal is the low-sulfur, low-priced PBR coal. The BLM says that 19 coal mines and 91 coal leases in the Wyoming portion of the Powder River Basin produced 382 million short tons in 2014 and employed over 6,500 personnel. The largest PBR mine, owned by Peabody Energy, is the North Antelope Rochelle facility, which produced 117.9 million tons in 2014, according to the BLM. The second largest is Black Thunder, which produced 101 million tons in 2014 and is owned by Arch Coal. On January 12, Arch Coal filed for bankruptcy protection in a federal court in Missouri in an effort to shed some $4.5 billion in debt. In the first 10 months of 2015, Arch delivered 73.7 million short tons of PBR coal to 51 clients. The biggest Arch customer in the 10-month period was Tennessee Valley Authority, which took delivery of 7.5 million short tons of Wyoming coal. Alabama Power received 5.1 million short tons from Arch. MidAmerican Energy, Entergy Arkansas, Consumers Energy and Kansas City Power & Light each received more than 4 million short tons. The 2,697 MW coal-fired Parish facility received just over 2 million short tons of Wyoming coal from Arch in the first ten months of 2015. The ‘pause’ and climate change The Interior Department, which issued Order 3338 outlining the review, said that in its “pause,” the BLM will not hold lease sales or process new lease applications for surface and underground coal. Jewel, noted there had not been a comprehensive review of the program “in more than 30 years,” and said there is “concern” about the “fair return” on the leases, 90% of which, she argued, received bids from only one bidder, and, she said, the current royalty rate of 8% for underground mines and not less than 12.5% for surface mines, “may be inadequate.” From her statement, though, it seemed clear what was really on her mind. The “second broad category of concerns” about the federal coal program “relates to its impacts on climate change,” she said. She said that the US has “pledged to the United Nations Framework Convention on Climate Change to reduce its greenhouse gas emissions by 26-28% below 2005 levels by 2025.” “At the same time, the federal coal program is a significant component of overall US coal production and, when combusted, federal coal contributes roughly 10% of the total US GHG emissions,” she said. The Interior Secretary said that many stakeholders have highlighted the contradiction of producing very large quantities of federal coal while pursuing policies to reduce US GHG emissions substantially, including from coal combustion. “The current leasing system does not provide a way to systematically consider the climate impacts and costs to taxpayers of federal coal development,” she said. One suspects the review will figure out how to fix that. http://everythingshale.com/news/2016/january/20/us-interior-review-will-likely-find-ways-to-fix-federal-coal/ http://everythingshale.com/news/2016/january/20/us-interior-review-will-likely-find-ways-to-fix-federal-coal/ Wed, 20 January 2016 05:00:54 http://everythingshale.com/news/2016/january/19/what-s-up-with-new-drilling-permits-january-2016-update/ Last Thursday when we published our latest DI Index of New Production Capacity (NPC), a relatively large increase in new (month over month, national) permits filed (18%!) raised the question, “what’s up with permits?” So we dusted off a few of our various spyglasses and microscopes in the DI Gallery and looked into the increase. DI Index First, we took a look at the DI Index itself. Permits aside, NPC – which is a measurement of oilfield activity that accounts for the type, size and placement of active rigs in order to give a more accurate prediction of what today’s drilling activity will ultimately generate in production – for the month of December was down a little bit verses November, as has generally been the case throughout the year. Our daily DI Rig Count, has also been showing a downward trajectory. When we drilled down into some of the monthly basinal and geographical reports we didn’t immediately see a spike in permitting activity in, say, The Permian Basin or the Eagle Ford. (We do have a neat perspective on Bakken activity this month which you should check out). DI Activity Maps Next we turned on our handy DI Activity Maps, and looked at our 30 day permitting heatmap to look for any weirdness. Clearly the areas that we expect to see activity are burning brightly – the northern counties in the Eagle Ford, the Midland and Delaware basins, Colorado’s Niobrara, the Bakken in North Dakota, the Appalachian plays. But California looks like it has some new heat, as does Wyoming. DI Classic A quick check of new drill permits (as opposed to re-entries) in California showed a rather sizable spike in Kern County (from 749 in November to 1284 in December) adding 535 permits in one month, which accounts for a large portion of that 18% M/M increase. A recent county ordinance to fast-track permitting may explain that spike. In fact, in both November and December, Kern County had the highest number of permits of any county in the country by far, so this increase has a big impact on the national total. Mapping the new Kern County permits shows that the great majority are within the confines of known fields. Kern county also had 422 re-entry permits filed in December, so most of this activity is just more straws into the milkshake. Converse County, Wyoming (Niobrara) also had a significant jump in permits – from 53 in November to 153 in December. In this county, a large number of permits look to have been filed in the second half of December in a few select leases. http://everythingshale.com/news/2016/january/19/what-s-up-with-new-drilling-permits-january-2016-update/ http://everythingshale.com/news/2016/january/19/what-s-up-with-new-drilling-permits-january-2016-update/ Tue, 19 January 2016 13:00:15 http://everythingshale.com/news/2016/january/19/shipping-ahoy-mending-broken-hearts-and-noses-in-tehran/ ‘There is no place like Iran in the world, Iran is the heart of the world, And we are people of heart’. So went the poem quoted by the master of ceremonies at the conference held by the National Iranian Tanker Company in Tehran, the day after nuclear sanctions were lifted. Iran the heart of the world? That may be stretching the point a little but there’s no doubt something significant has happened here over the last couple of days.   The imminent return of Iranian oil to the global market, happily coinciding with the 60th anniversary of NITC’s foundation, prompted the company to invite a host of businesses to Tehran in anticipation of renewing activities which were interrupted by the tightening of sanctions in 2012. The number of attendees – perhaps not as many as the official number of 650 people, comprised of 300 from overseas and 350 from Iran, but still enough to be impressive – showed how significant this country is for the international business community. Moreover, the range of companies in attendance, including but not limited to shipbrokers, shipowners, ship managers, trading houses, classification societies and IT suppliers, demonstrated the desire for market participants to grab a piece of the action as Iran’s doors open once more. Coming at a time when oil prices have crashed and tanker freight rates have started 2016 on the slide, these businesses recognise the return of a major global player as a potential opportunity that cannot be ignored. For the Iranians themselves, this marks the end of a very challenging period. During the conference, the former managing director of NITC Mohammad Souri spoke of the difficult times for the company finally being over. NITC has had arguably the most challenging experience of any shipping company over the past 30 years. The recent sanctions aside, the company shipped 2.5 million tons of crude oil per day during the late 1980s at the height of the war with Iraq. Its vessels came under attack over 200 times during the Iran-Iraq war and more than 150 sailors were killed. While mindful of these experiences, NITC is keen to turn a new page and the talk now is of international cooperation, foreign investment and, significantly, diversification. NITC’s managing director Ali Akbar Safaei told Platts that the strategic plan is to diversify the company’s sources of income, relying not just on crude oil revenues but also shipping more LPG, LNG and even providing offshore services. NITC is ready to partner with foreign investors and intends to list a portion of its shares on the international market. At a time of falling freight rates, Mr Safaei was keen to stress that the company would not bring more than its existing 15.4 million deadweight of vessel capacity to the market. However this would still allow for some purchasing of second hand or even new-building tonnage, which would be offset by scrapping older vessels. The overriding message from the Tehran gathering is that Iran is open for business, and from spending just a few days in Tehran that’s the wider impression the city gives. Our first meaningful interaction with an Iranian was with an elderly gentleman on the flight into Tehran from Dubai. Delighted that a British citizen was visiting his country, he immediately offered to share a cab into the city. At the conference, a Norwegian delegate told us about bumping into a young Iranian man while walking in the city, who then happily spent 45 minutes showing him around. The sophistication and modernity of the Iranian youth are there to see in a country whose official name portrays conservatism. On a walk around the bazaars of Tehran, it is a common sight to see young men and women walking around holding hands, along with scores of ladies with bandaged noses after undergoing plastic surgeries. Tourist attractions in Tehran include the Shah’s old palaces which, despite representing an era that the revolution did away with, have been respectfully preserved and put on display. In the same way, with both a keen sense of history and hard-won experience as well as a new sense of outward-facing optimism, NITC and the country as a whole turns its heart and its head towards the next chapter on the world stage. http://everythingshale.com/news/2016/january/19/shipping-ahoy-mending-broken-hearts-and-noses-in-tehran/ http://everythingshale.com/news/2016/january/19/shipping-ahoy-mending-broken-hearts-and-noses-in-tehran/ Tue, 19 January 2016 11:57:50 http://everythingshale.com/news/2016/january/19/iran-s-post-sanctions-oil-plans-and-their-market-impact/ This weekend the world witnessed what has been hailed as the most significant diplomatic breakthrough since the collapse of the Soviet Union: the lifting of nuclear sanctions against Iran. The lifting of sanctions, which came late Saturday, followed confirmation from the UN’s International Atomic Energy Agency that Tehran had fulfilled its obligations under an agreement last summer to limit its nuclear program. The IAEA report triggered Implementation Day, which will give Iran access to billions of petrodollars frozen in foreign banks and remove the constraints that have capped the country’s crude exports at just 1 million b/d over the past four years. Iran on Sunday activated plans to lift oil production by 500,000 b/d. Below Platts highlights details of the sanctions that have been lifted, Iran’s plans to raise oil production and exports, and what this means for an already oversupplied global oil market. Iran’s oil exports then and now (click to view larger) Sanctions lifted The European Council lifted its nuclear-related sanctions January 16. Sanctions lifted by the US include a ban on commodities trade for non-US citizens, who will now be permitted to trade with Iranian government institutions and sell goods and services. Companies from outside the US will be able to start doing business with Iran immediately, without sanction from the US. Sanctions will no longer apply to non-US persons providing underwriting services, insurance, or re-insurance for the Iranian energy sector, including vessels for the transport of crude oil, gas, oil and petrochemical products to or from Iran. The insurance ban had made it hard for many of Iran’s remaining crude customers in Asia to arrange transport of their oil purchases. Companies will no longer be sanctioned for investments in Iran’s oil, gas and petrochemicals sectors, or buying and transporting Iranian crude, oil products and petrochemicals. The sale of refined products and petrochemicals to Iran will also no longer come under US sanctions, nor will transactions with Iran’s energy sector. Blog post continues below… Request a free trial of: Oilgram News   Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more. Some US sanctions remain A number of older US sanctions against Iran remain in force, including those imposed for Iran’s alleged support of terrorism and human rights violations, which experts say might be tricky for companies to navigate. Still in force is a US trade embargo preventing US entities from conducting business with Iran and which bans the import of Iranian oil into the US. It also effectively prohibits any US dollar transactions with Iran since those typically transit through US banks. Restrictions on exports of US upstream and downstream technology to Iran, unless granted a license by the Obama administration, will also remain in force. However, the US Treasury Department has said it will permit foreign subsidiaries of US companies to operate in Iran, provided there is no involvement of US citizens, technology or financing. Iran’s oil plans Iran’s oil ministry activated its planned 500,000 b/d oil output increase Sunday, issuing an order to its state-owned companies to increase production and placing the National Iranian Oil Terminals Company on standby. If achieved, this volume would take Iranian output to around 3.39 million b/d and exports to 1.5 million b/d. Top Iranian officials including Mehdi Assali, oil ministry head of OPEC affairs, and Amir Hossein Zamaninia, deputy oil minister for international and commercial affairs, said Iran plans to regain its lost market share but in a manner that would have the least impact on oil prices. Iran has based its next budget for March 2016-March 2017 on an oil price of $40/b and exports of 2.25 million b/d, Gholamreza Kateb, a government spokesman said Sunday. Iran hopes to attract top international oil companies to its upstream sector to help it develop its vast reserves of oil (estimated at 157 billion barrels) and gas (about 1,200 Tcf). It has designed a new upstream contract model that it will present in London in February. Iran is currently pumping less than 3 million b/d. A Platts survey estimated that the country produced 2.89 million b/d in December. The International Energy Agency has said it expects Iran to be able to achieve crude output of 3.6 million b/d — similar to the 2011 level — within six months of the lifting of sanctions. Immediate impact on supply The immediate impact on exports is expected to come from Iran’s considerable floating storage. According to latest data from cFlow, Platts trade flow software, between 47 million and 49 million barrels of Iranian crude oil and condensate is stored on a combination of vessel classes on ships of the state-owned National Iranian Tanker Co. and other ship operators. Market sources have estimated 65% of this volume to be condensate and expect some of this to trickle into the spot market in Asia. They have, however, said that Iranian condensate has limited outlets in Asia due to its high sulfur content. Key buyers Only six oil importers are currently allowed to buy crude from Iran — China, India, Japan, South Korea, Turkey and Taiwan — down from around 20 before sanctions were tightened in mid-2012. Zamaninia said Sunday that China, which imported an average 539,509 b/d of Iranian crude over the first 11 months of 2015, would remain Iran’s top buyer. All Asian buyers have said they will be interested in Iranian oil as long as the pricing is competitive. The EU had imported nearly 600,000 b/d of Iranian crude and condensate before the tightening of sanctions in 2012. Most of this volume went to Spain, Italy and Greece. Spanish and Italian refiners have said they are interested in resuming Iranian crude imports once sanctions are lifted. Increased supply from Iran could affect demand for West African, Russian, Caspian, North Sea and Iraqi crudes, among others, which have replaced Iranian volumes. http://everythingshale.com/news/2016/january/19/iran-s-post-sanctions-oil-plans-and-their-market-impact/ http://everythingshale.com/news/2016/january/19/iran-s-post-sanctions-oil-plans-and-their-market-impact/ Tue, 19 January 2016 08:45:58 http://everythingshale.com/news/2016/january/19/video-drill-our-way-to-lower-gasoline-prices-mr-president-yes-we-can/ Remember when President Obama said over and over “we can’t drill our way to lower gas prices”? Well in this year’s State of the Union address, he admitted, “gas below two bucks a gallon ain’t bad, either.”  As experts have said, these lower prices are due to the energy boom we’ve experienced, thanks to fracking. Drill our way to lower gasoline prices, Mr. President? Yes we can. We already did! http://everythingshale.com/news/2016/january/19/video-drill-our-way-to-lower-gasoline-prices-mr-president-yes-we-can/ http://everythingshale.com/news/2016/january/19/video-drill-our-way-to-lower-gasoline-prices-mr-president-yes-we-can/ Tue, 19 January 2016 07:16:45 http://everythingshale.com/news/2016/january/19/grow-a-tree-burn-a-tree-a-rethink-of-biomass-philosophy/ A re-evaluation of biomass for electricity generation appears a certainty, and the evolution of sustainability criteria is likely to retard market growth, just as it did for biofuels, although their implementation will run into industry and political resistance. However, the experience of biofuels and doubts over biomass-fired power generation raise a broader question. The world has a functioning energy system in the production of food. The energy source for this system is the sun. Plants are the generation system and animals the end-users and recyclers. Humans have required additional energy to raise their standard of living, whether it be using cow dung for heat and cooking fuel, or electricity to browse the internet. To date, the vast bulk of this additional energy has been sourced from biomass, either fresh, or from the raid on the millennia old solar energy store that are fossil fuels. This raid has now become unsustainable. The use of biomass today represents a subtraction from the food/energy system for alternative use, whether that biomass be a direct food stuff, such as palm oil, an intermediary, such as sugarcane, or inedible wood. It represents a disturbance to the ecosystem that carbon accounting is showing to be much more complex than the simple ‘grow a tree, burn a tree’ philosophy suggests. It may be no more of a disturbance than modern agriculture, which is necessary to raise and concentrate the productivity of the ecosystem in order to feed the world’s population. But modern agriculture is itself emissions intensive and cannot function without additional energy inputs. There is a clear negative trade-off between using biomass both for food energy and for electrical or locomotive energy. Using biomass for power generation and for biofuels puts additional and unpredictable  demands on the  ecosystem, when raising the productivity of that system already requires external energy inputs, not subtractions. Biomass is just early stage fossil fuel. Other sources of energy are external to this cycle. Solar and wind power are not really forms of energy production at all – they are harvesting techniques. They are not even commodities that can be owned. They represent a bigger drawdown of what might be termed ‘natural’ energy. Marine energy systems, including hydroelectricity, are also essentially harvesting techniques. Geothermal energy taps an additional source of energy which is not sustained by the sun – the heat of the earth’s core — so it too is external to the hydrocarbon cycle. And then there is the atom. Though there are many well-reasoned environmental and social concerns with nuclear fission technology as is currently constituted, the energy contained within the atom is a seemingly limitless source of additional energy that could sustain and raise the productivity of the hydrocarbon cycle. The latter is a cycle, or system, that doesn’t simply sustain life, it is life. http://everythingshale.com/news/2016/january/19/grow-a-tree-burn-a-tree-a-rethink-of-biomass-philosophy/ http://everythingshale.com/news/2016/january/19/grow-a-tree-burn-a-tree-a-rethink-of-biomass-philosophy/ Tue, 19 January 2016 05:04:23 http://everythingshale.com/news/2016/january/18/the-impact-of-saudi-ethane-price-increases-on-competitiveness/ At the end of December, Platts reported that Saudi Arabia increased the price of gasoline, domestic gas for power generation and ethane feedstock in its 2016 budget, part of a broader program to cut subsidies and reduce its budget deficit. As a part of this, the ethane price more than doubled from the long-standing fixed price of $0.75/MMBtu to $1.75/MMBtu, according to the official Saudi Press Agency. So what does this mean for Saudi Arabia’s position as the world’s lowest-cost ethylene producer? Setting the stage According to Platts Analytics, Saudi Arabia has 13 steam crackers currently operating with a total ethylene capacity of 15.7 million mt/year. For 2016, we expect capacity to reach 16.9 million mt with the start of the 1.5 million mt/year Sadara cracker. Additionally, the country will have a full year of production from the Petro-Rabigh unit 2 cracker, which started up in mid-2015. The largest facility in the country is the 2.45 million mt/year Petrokemya steam cracker in Al Jubail. The facility has a naphtha-based cracker with a capacity of 700,000 mt/year (Unit 1), an ethane/propane mix cracker with a capacity of 950,000 mt/year (Unit 2), and an ethane-based cracker with a capacity of 800,000 mt year (Unit 3). Approximately 62% of the ethylene produced in Saudi Arabia is from ethane, followed by 25% from propane, 10.8% from naphtha, and 1.4% from butane according to Platts Analytics. By 2024 we expect the percent of ethylene produced from naphtha to increase to 17%. The question of competitiveness How will this affect the competitiveness of Saudi ethylene producers in the region and the world moving forward? As reported by Platts, Saudi Arabia will remain the world’s lowest cost ethylene producer despite the significant increase in the cost of ethane. In order to compare regional prices we must look at everything on a $/mt basis. Using typical conversion factors, the $1.75/MMBtu Saudi ethane price on a $/mt basis is approximately $86/mt. (To convert from $/MMBtu to $/mt we multiplied the $/MMBtu price by 66,000 Btu/gal. We then multiplied that by 742 gal/mt, and then divided by 1,000,000 to achieve the $/mt price.) Even with the more than doubling of the ethane price, the feedstock cost for Saudi producers is much lower than the other producers in the Middle East using ethane and the US producers. The average US ethane price for January 12 was 15.13 cents/gal, or $112.26/mt using the aforementioned conversion factors. The price of naphtha in NW Europe and NE Asia for the same time period is $309.75/mt and $342.88/mt, respectively. However, we must consider the amount of feedstock needed to produce one metric ton of ethylene. Using the typical cracker yields shown below, Platts Analytics calculated the price of feedstock to produce 1 mt of ethylene. The estimated price of the amount of feedstock needed to produce 1 mt of ethylene is: $108.50/mt in Saudi Arabia using 100% ethane, $142.10/mt in the US using 100% ethane, $303.80/mt in other countries in the Middle East using 100% ethane, $911/mt in NW Europe using 100% naphtha, and $1,008.47/MT in NE Asia using 100% naphtha. When we factor in the co-products, and add estimated variable and fixed costs, we have the following approximate production costs. Regional production costs The production costs above were calculated based on a 1 million mt/year cracker in each region using 100% of the same feedstock. However, this is often not the case. For instance, in the US, most crackers use a mixed feedstock comprised of NGLs, and the percentage of each component in the feedstock varies month to month. In Europe and Asia, producers are increasing flexibility in their units to take more LPG. In Saudi Arabia, as well as the Middle East, many crackers are using ethane, LPG, and naphtha in their feedstock mix. The column chart above however can be viewed as the upper or lower end of ranges in production costs for each region. For instance, the Saudi ethane price shown in the chart can be interpreted as the lowest cost in the region. As mentioned above, most crackers are using a mixed feed of naphtha and LPG. The production costs for NW Europe and Asia naphtha crackers can be interpreted as the higher end of the range, as most crackers in both regions continue to increase flexibility to utilize more LPG. Strategies to maintain margins Saudi producers still hold the position as the most competitive ethylene producer globally followed by the US. The increase in production costs in Saudi Arabia will however erode margins. With only three components in the equation to work with — including net feedstock cost, variable cost and fixed cost — producers will have to increase efficiency in order to lower the variable costs. Some strategies to increase efficiency by lowering variable cost can include horizontal and/or vertical integration including refinery/petrochemical integration or integration through the value chain — in this case, polymer plants. Integration has proven to increase profitability by lowering costs through shared utility and labor costs, but does have its own costs added to it, including capital, transaction, and re-organization/management costs. We will see later this year how the producers in the Kingdom offset the higher production costs in order to maintain margins. Platts Global Polyolefins Outlook Platts Global Polyolefins Outlook report and accompanying dataset helps you to understand how today’s wide cracking margins are incentivizing a rush for new capacity and how this might erode the US feedstock advantage after 2017. http://everythingshale.com/news/2016/january/18/the-impact-of-saudi-ethane-price-increases-on-competitiveness/ http://everythingshale.com/news/2016/january/18/the-impact-of-saudi-ethane-price-increases-on-competitiveness/ Mon, 18 January 2016 23:01:01 http://everythingshale.com/news/2016/january/18/west-virginia-s-marcellus-shale-production-remarkable/ When discussing the Mighty Marcellus , it’s often Pennsylvania that one thinks of because of the sheer size of the Marcellus Shale across the state and the record breaking natural gas production that has occurred here. But the latest data from the West Virginia Geological & Economic Survey (WVGES) shows that Pennsylvania is not the only Marcellus state with amazing production results. From a recent Wheeling Intelligencer article : “They are remarkable. They are shocking,” Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said of the numbers. “We were at about 260 billion cubic feet in 2008. Now, it just keeps going up because of fracking and horizontal drilling.” Just how much natural gas are we talking about? Well, just one well in Ohio County produced enough gas in 2014 to supply electricity for over 24,000 homes! In fact, in 2014 the state produced over one trillion cubic feet of natural gas. According to Energy.gov , that’s enough natural gas to, heat 15 million homes for one year; generate 100 billion kilowatt hours of electricity; and fuel 12 million natural-gas powered vehicles for one year. And it’s not just natural gas that is booming. The state also produced 8.3 million barrels of liquids like ethane and propane, along with the natural gas developed. These feedstocks are used for heating, manufacturing and making plastics, and will be a huge boon for the region if an ethane cracker facility is built in the area to treat ethane. In addition to the natural gas and liquids, Ohio County had one well that produced over 45,000 barrels of light crude oil in 2014, and the state overall produced 5.2 million barrels. What’s even better? West Virginia has barely scratched the surface of its potential when it comes to shale development. From a recent Wheeling Intelligencer article : “I remember when we got to 100 Bcf and thought that was great,” Corky Demarco, executive director of the West Virginia Oil and Natural Gas Association, said. “The thing is, we’ve probably only permitted about 5 percent of the potential Marcellus wells in West Virginia.” But with this five percent, West Virginia has already seen incredible economic benefits. For instance, Marshall County sits near Wheeling, which was recently named the fifth fastest growing metropolitan in the country thanks to shale development . Marshall County’s proximity to not only shale development, but infrastructure as well, has helped to improve the economic outlook in the region. The county’s unemployment rate was 5.5 percent near the end of 2015, and community leaders are hoping to create even more jobs with a cluster of petrochemical, manufacturing and natural gas plants that will use the liquids found in the county. From the Tribune-Review , “Officials want to lure manufacturers that can use the cheap natural gas and liquids to power their operations or as a base component for plastics once they are converted at a cracker, such as the one Thai company PTT Global Chemical is considering just across the river in Ohio at a former coal-fired power plant. “ We really hope to attract the crackers and downstream opportunities to get those long-term jobs ,” Dennison said. PTT is spending $100 million on engineering studies as it considers the site, and could build additional facilities for processing that would employ several hundred people .” (emphasis added) But like the rest of the Appalachian Basin, West Virginia is currently awaiting approva l for new pipelines that will be built to provide a means to sell this gas to market and further benefit communities within the state. The Atlantic Coast Pipeline , the Rover Pipeline , the Leach XPress Pipeline , the Mountain Valley Pipeline and the Nexus Pipeline are currently under review by the Federal Energy Regulatory Commission (FERC). And once approved , these pipelines will allow operators to increase production further. As Tim Greene, owner of Land and Mineral Management of Appalachia and a former inspector for the West Virginia Department of Environmental Protection, told the Wheeling Intelligencer : “If there is already this much production, try to imagine what there can be when we get more pipelines.” Imagine indeed. As more infrastructure is built, West Virginia will become an even more important part of the shale development taking place across the Appalachian Basin , providing energy across the country. http://everythingshale.com/news/2016/january/18/west-virginia-s-marcellus-shale-production-remarkable/ http://everythingshale.com/news/2016/january/18/west-virginia-s-marcellus-shale-production-remarkable/ Mon, 18 January 2016 13:50:36 http://everythingshale.com/news/2016/january/15/the-science-on-fracking-in-california/ Hydraulic fracturing (“fracking”) is used throughout the United States to produce oil and gas from “tight” shale formations bringing along with it good-paying jobs , economic growth , and reduced CO2 emissions . California is nation’s third largest energy producing state and fracking here is a bit different than elsewhere in the country. Check our EID’s new infographic that looks at what scientists and experts have to say about fracking in the Golden State: http://everythingshale.com/news/2016/january/15/the-science-on-fracking-in-california/ http://everythingshale.com/news/2016/january/15/the-science-on-fracking-in-california/ Fri, 15 January 2016 15:02:50 http://everythingshale.com/news/2016/january/15/governor-cuomo-bans-fracking-announces-major-climate-plan-powered-by-natural-gas/ Governor Andrew Cuomo announced New York’s aggressive plan to tackle climate change this week during his State of the State address . The plan calls for a mandate that half of the Empire State’s power come from renewable energy within 15 years. But the real backbone of the plan to reduce emissions is, of course, an even greater increase in natural gas use. Since New York has banned fracking, that gas will have to be imported. Wall Street Journal ’s Amy Harder perhaps said it best on Twitter : . @NYGovCuomo in ’14: We’re banning fracking & in ’16: NY will be coal-free by ’20 Meanwhile, natural gas provides most of NY’s electricity — Amy Harder (@AmyAHarder) January 13, 2016   New York City is following suit. Mayor Bill de Blasio has set a plan in motion that calls for an increase of natural gas usage to meet climate change goals. So, the state that banned fracking plans to import more natural gas than ever to tackle climate change! Needless to say anti-fracking activists are not happy. As Mark Dunlea wrote in an opinion piece in City Limits , “Unfortunately, the de Blasio plan envisions a large role for natural gas.” Meanwhile the co-founder of New Yorkers Against Fracking, Sandra Steingraber, is now turning her attention to fighting the infrastructure needed to support this increasing demand. In her speech at a rally organized around the State of the State address, she proclaimed, “We seek to replace every burner tip—from power plants to basement furnaces—with energy systems that look up—to the sun and the wind—instead of down at the graveyards of Devonian fossils. Governor Cuomo, we want you to tell the world that New York is so done with keeping the lights on by building more crematoria for the burning of more prehistoric plants and animals, whose extraction from the ground and transportation to the flame destroys our climate, our water and our health. An end to fossil fuels is our united goal.” The Catskill Mountainkeeper , Ramsey Adams, recently told Politico New York : “New York should not be permitting new methane gas pipelines and must shut down bomb trains’ ability to transport dirty, dangerous fossil fuels through our communities.” Apparently activists like Steingraber are living under a rock to have missed the clear environmental benefits already occurring in their home state. Thanks to domestic natural gas development, and associated infrastructure , New York City is currently experiencing its cleanest air in over 50 years. According to former NYC Mayor Bloomberg, the cleaner air is estimated to have prevented as many as 800 deaths and 2,000 hospital visits per year. New York is also seeing wholesale electricity prices plummet as power plants transition to affordable natural gas. From a recent Bloomberg article : “ New York power is becoming so cheap that it’s threatening to fall below prices in the area surrounding Washington . Electricity at the two hubs is only about $1 apart now, down from almost $23 a megawatt-hour in 2013.” (emphasis added) Cleaner air and lower bills are great news for New York consumers. It’s just unfortunate that Governor Cuomo has banned the process that would provide that gas and bring so many jobs to an area of the state that needs them the most. http://everythingshale.com/news/2016/january/15/governor-cuomo-bans-fracking-announces-major-climate-plan-powered-by-natural-gas/ http://everythingshale.com/news/2016/january/15/governor-cuomo-bans-fracking-announces-major-climate-plan-powered-by-natural-gas/ Fri, 15 January 2016 11:59:04 http://everythingshale.com/news/2016/january/14/why-won-t-steyer-say-if-he-is-funding-colorado-s-anti-fracking-campaign/ While activists pushing a slate of ballot initiatives targeting Colorado’s energy industry continue to dodge questions about who is bankrolling their efforts, a new report detailing how San Francisco billionaire and environmental activist Tom Steyer is ramping up his political spending in the state raises questions as to whether this “biggest of mega-donors” is  backing the campaign. The latest attempt to brush off reporters asking questions about the campaign’s financial backers comes in a story featuring Tricia Olson, Executive Director of the group pushing the initiatives for the 2016 ballot, Coloradans Resisting Extreme Energy Development or CREED. As the Colorado Springs Gazette reports: “Olson said not all of the measures will be taken to the ballot. There’s a long process ahead to set official language, make sure the measures adhere to Colorado rules for initiatives and gathering signatures to put them on the ballot. Olson declined to disclose who was funding the effort.” Yet even as Olson refuses to disclose her group’s donors, new information shows that Steyer, best known for spending big in Colorado’s 2014 Senate race, is once again targeting the state with political spending that could make its way to CREED’s coffers. Writing for Complete Colorado , EID’s Simon Lomax uncovered recent campaign finance disclosures showing that Steyer’s political operation has been pouring money into a Colorado consulting firm for “research” and “polling” services. Lomax writes : “According to a review of federal campaign finance disclosures , Steyer’s political action committee – NextGen Climate – spent more than $357,000 on research and polling services in Colorado during 2015. In fact, from Jan. 1 to Nov. 31, NextGen put more money into Colorado research and polling firms than it spent on national outfits based in New York, New Jersey and Washington, D.C. Disclosures for December 2015 aren’t due to the Federal Election Commission until the end of this month.” Steyer’s interest in Colorado politics is well known. In fact, it has been reported that Steyer’s representatives explored financially backing a similar pack of ballot initiatives proposed in 2014. With those initiatives abandoned before going before voters, Steyer maintained his presence in the state by directing his resources toward bolstering then Colorado Senator Mark Udall’s reelection campaign. Udall still lost to Republican challenger Cory Gardner. More recently, Steyer returned to Colorado where he was recognized as Conservation Colorado’s 2015 “Rebel with a Cause,” a move that EID highlighted at the time as evidence of his ambition to be a major political force in the state. Though Conservation Colorado is best known for lobbying the state government on environmental issues and heavily influencing state and local campaigns , Steyer’s visit came as the group was showing signs of adopting an increasingly extreme stance on oil and natural gas development. Just a few months before announcing Steyer’s appearance at their “gala,” the group’s “Coming Soon Arapahoe” campaign, a multimedia and direct mail blitz designed to turn public opinion against oil and natural gas development, was so extreme that it drew a sharp rebuke from Arapahoe County Commissioner Nancy Sharpe: “Following the collapse of the Don’t Frack Denver campaign, Arapahoe County appears to be the next victim of the anti-fracking movement.  Another group, Conservation Colorado, targeted our county by releasing a map aimed at scaring Arapahoe County residents into thinking drilling was arriving in their backyard at any moment.  However, in reality, current state regulation specifies setbacks of 500 feet from residential units and 1,000 feet from schools.” While Steyer has refused to tell the voters of Colorado what his plans are, it is certain that he continues to run his political machine in the state. Savvy political observers will soon know if this latest effort to ban fracking in the state has attracted the funding necessary to mount a competitive initiative campaign. And if they have, it will become increasingly difficult for backers to brush off and dodge questions from reporters looking to shed light on who is behind this newest iteration of job-killing initiatives that threaten Colorado’s economic well-being . http://everythingshale.com/news/2016/january/14/why-won-t-steyer-say-if-he-is-funding-colorado-s-anti-fracking-campaign/ http://everythingshale.com/news/2016/january/14/why-won-t-steyer-say-if-he-is-funding-colorado-s-anti-fracking-campaign/ Thu, 14 January 2016 13:21:13 http://everythingshale.com/news/2016/january/14/supply-demand-emotion-the-future-of-crude-oil-futures-volatility/ Many crude oil market observers point to current global inventory levels to explain today’s low prices.  The recent price decline is also attributed to concern about possible future decline in Chinese demand growth . The problem with both of these explanations is that no one can describe with sufficient certainty the causal relationship between current crude oil inventories or future Chinese consumption and the future price of crude oil.  To paraphrase economist Mohamed El-Erian  the crude oil market may simply be “ repricing to a new volatility paradigm .” Relationship of Crude Oil Inventory and Future Prices; Theory of Storage Need Not Apply As Reuters market Analyst John Kemp has written, in a perfect market with perfect information, there should be a relationship between changes in  crude and products stocks and changes in prices, but no such relationship has been found in past market data. According to the late Stanford professor Holbrook Working’s Theory of Storage , the level of commodity inventories should shape the forward price curve. When inventories are low, the market creates backwardation. When inventories are high, the market creates contango. Historically the crude oil futures market has not seen significant correlation between inventory levels and its forward price curve. More fundamentally, the market moves on survey and estimated inventory numbers that are subject to significant subsequent revisions.  As David Pursell with Tudor, Pickering, & Holt has observed, “the observed OECD inventory builds in late 2014 and early 2015 showed a market that was oversupplied (inventory builds larger than normal) but much less oversupplied than published supply-and-demand numbers would suggest ”. Decline in Future Chinese Crude Demand Growth Speculative While there is broad agreement that the recent slowdown in the growth of the Chinese economy has caused reduced iron ore  and coal imports , China continues to import crude oil at record levels . China appears to be increasing the size of its strategic petroleum reserves by constructing underground caverns . Although increasing the size of its strategic petroleum reserves may not immediately translate into long term sustainable demand growth, increased imports by teapot refiners  and record vehicle sales indicate strong current demand growth that does not appear likely to diminish in the near future. World’s Oil Market Now Biggest Ever, Demand Growth May Surprise to Upside The fact remains that the world is consuming 94 million barrels of oil a day, the most ever.  Given the record breaking sales of heavier vehicles in the US and China and the additional consumption usually induced by lower  refined product prices, demand growth in 2016 could surprise to the upside . What is Driving Crude Market Volatility? Robert McNally, a fellow at Columbia University’s Center on Global Energy Policy and the founder of The Rapidan Growth, describes the “Crude Predicament” in his 12-17-2015 paper “ Welcome Back to Boom-Bust Oil Prices ”.  He accurately describes how the capital intensive and unique geopolitical attributes of crude oil production contribute to a cyclical and volatile market.  He states, “Oil’s short run demand and supply inelasticity portends prolonged boom-bust cycles.  The absence of an effective short-term price stabilizer will increase investor uncertainty about longer-term prices that factor into major consumption, investment, and government planning decisions. … As we see daily now, global equity, bond, and currency markets are being roiled by violent oil prices moves; oil is the tail that is wagging several macroeconomic and financial dogs.” Indeed the price of oil options has increased significantly in light of the level of implied volatility in recent weeks. Interestingly the market does not currently appear to price much if any geopolitical risk premium which implies that hedging expenses could increase significantly if a geopolitical event occurred that disrupted supply. Effect of US Crude Oil Exports? While market observers agree that few incremental barrels of physical crude will be exported due to the repeal of the 40 year old ban , the effect on the financial derivative market has been immediate and substantial as the West Texas Intermediate (WTI) and Brent Crude contracts reached parity on December 23, 2015.  Because futures contracts are settled based on physical crude delivery at contracted locations, the theoretical ability to export US crude to any rule of law nation must be taken into account by market price forecasters. Volatile May Be The New Normal Given the inherent opaque nature of oil and gas supply and demand data, the foreign currency risk inextricably intertwined with the global hydrocarbon market, and the complex and shifting geopolitical landscape on which the petroleum infrastructure is built, the crude oil market is likely to see substantial swings in the near future. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2016/january/14/supply-demand-emotion-the-future-of-crude-oil-futures-volatility/ http://everythingshale.com/news/2016/january/14/supply-demand-emotion-the-future-of-crude-oil-futures-volatility/ Thu, 14 January 2016 13:00:01 http://everythingshale.com/news/2016/january/13/starupdatestar-under-scrutiny-stanford-professor-deletes-data-showing-job-loss-from-renewables-transition/ UPDATE (1:40pm CT, 1/13/2016): Dr. Mark Jacobson has admitted to deleting the data tables showing a net loss of long-term jobs. @PhelimMcAleer All real data used in papers still there.Dead non-real #s removed only because @saeverley abuse by falsely claiming were real — Mark Z. Jacobson (@mzjacobson) January 13, 2016   Dr. Jacobson claims that the data cited by Energy In Depth were “ not real ,” but rather just “test” numbers that were not associated with the published study. That convenient explanation is not found in the original worksheet that housed the net long-term job loss numbers, nor is it listed on Dr. Jacobson’s website. However, a press release from Stanford University last summer, which announced the publication of Dr. Jacobson’s study, encouraged visitors to “visit Jacobson’s website and The Solutions Project ” for more information. That same website included the data that Energy In Depth cited. — Original post, January 13, 2016 — A Stanford professor who claims a transition to 100 percent renewables would be a major job creator has scrubbed his website of data showing significant long-term job losses  from such a plan, according to a new review by Energy In Depth. Online records show that the professor, Dr. Mark Jacobson, edited his documents just hours after an Energy In Depth report  revealed how the transition to 100 percent renewables would cause a net loss of more than 1.2 million long-term jobs, based on data pulled directly from Dr. Jacobson’s website. The decision to alter his own data could raise additional questions about Dr. Jacobson’s plan for a 100 percent renewables energy system, a plan that has already faced significant criticism from the scientific and environmental communities . On his website, Dr. Jacobson houses a number of supporting documents for his research on a 100 percent renewables transition, including a Microsoft Excel file that shows everything from assumptions about levelized costs of electricity to jobs estimates and energy demand projections. In Dr. Jacobson’s original spreadsheet, a tab entitled “Total Job Loss” included a two-column, highlighted chart describing “Net Long Term Jobs” and “Net Total Jobs.” The tables indicated a negative 1,284,030 net long term jobs, but a positive 4,031,629 net total jobs. As Energy In Depth observed last week , Jacobson’s data show a net job gain because “Construction” jobs created from a transition to 100 percent renewables would exceed the number of “Long Term Jobs” lost. Many environmental activists who have promoted Jacobson’s plan have spent years denigrating construction work as being inferior to what they called “real jobs.” But now the spreadsheet on Dr. Jacobson’s website no longer shows a loss of “Net Long Term Jobs.” In fact, the highlighted column has been deleted from the document entirely. Screen capture of the “Total Jobs Loss” tab in Dr. Mark Jacobson’s supporting data Excel file, before (left) and after (right) Dr. Jacobson’s edits on January 5, 2016. The document was edited after Dr. Jacobson claimed Energy In Depth “falsified data” regarding what his research showed about long-term jobs. Source: Dr. Mark Z. Jacobson’s website, Stanford University . According to the document’s properties, it was last modified at 10:05pm on January 5, 2016, several hours after Energy In Depth’s report was published. It also came after Dr. Jacobson accused Energy In Depth of lying about what his data tables show. Amazing how @saeverley @EnergyInDepth flat out lie about paper at https://t.co/pGaym7I46V Table 9 clearly shows 2 mil net 40-yr jobs created — Mark Z. Jacobson (@mzjacobson) January 5, 2016   The previous version of the spreadsheet, a copy of which Energy In Depth saved prior to Dr. Jacobson’s updates on January 5th, shows the last time it was modified was on May 18, 2015. Typically, Excel spreadsheets will open to the last modified tab before it was saved. The new version on Dr. Jacobson’s website now opens directly to the Total Job Loss tab. Screen captures of the properties of Dr. Mark Jacobson’s data tables file. The original file is on the left. The picture on the right indicates that Dr. Jacobson modified the document on the evening of January 5, 2016. The newly edited version no longer contains a chart showing a negative number for “Net Long Term Jobs.” Source: Dr. Mark Z. Jacobson’s website, Stanford University . Prior to editing his data tables, Dr. Jacobson claimed Energy In Depth “ faked data ” to show the long-term job loss, even though that information was pulled directly from his document. He later issued a veiled threat  that he was “going to be very clear publicly that you have intentionally falsified data, Mr. Everly [sic],” before declaring “conversation over” and imposing a user block on Twitter. Over the next several days, after he had edited the document, Dr. Jacobson published a series of progressively angrier tweets , including a particularly wild comparison of Energy In Depth to “ tobacco .” In an exclusive interview with the left-wing website Media Matters , Jacobson once again accused Energy In Depth of “falsifying data,” though he made no mention of editing those data after the EID report was published. “Whereas I have experienced cases where people didn’t like our results because they affected their energy of choice, this is the first time I’ve come across someone (Everley) actually falsifying data from our study then refusing to correct it when informed of the error.” (emphasis added) Earlier this week, Dr. Jacobson granted a separate interview to  the left-wing blog Daily Kos , which gave him a forum to respond to Energy In Depth’s report. But Dr. Jacobson likely did not anticipate another Daily Kos blogger criticizing his 100 percent renewables plan as impractical . In a comment posted to the article including Dr. Jacobson’s interview, an environmental blogger said that “no electric utility is ever going to adopt Jacobson’s plan” because, among other things, the “wind power component of Jacobson’s plan cannot be relied upon for reliable electric power generation and supply.” http://everythingshale.com/news/2016/january/13/starupdatestar-under-scrutiny-stanford-professor-deletes-data-showing-job-loss-from-renewables-transition/ http://everythingshale.com/news/2016/january/13/starupdatestar-under-scrutiny-stanford-professor-deletes-data-showing-job-loss-from-renewables-transition/ Wed, 13 January 2016 10:37:00 http://everythingshale.com/news/2016/january/12/cop-21-compliance-requires-favorable-natural-gas-policies/ From our perspective, the declarations made and the agreements reached at The 2015 United Nations Climate Change Conference (COP 21) in Paris made little or no reference to the future role of natural gas. This fossil fuel, without any hesitation, is the source of energy that could make reality the binding arrangements agreed in Paris. Let us explain why. At the end of this 2015 (percentages more or less for a simple understanding of the subject), the world energy matrix is composed of 30% coal, 30% oil, 25% natural gas and 15% of other source of energy, mainly those considered clean (hydro, solar, wind, etc.). Replacing the three fossil fuels (coal, oil and natural gas), which make up about 85% of the global energy matrix? Impossible with current technology and existing alternative energy resources that are not abundant, are mostly intermittent and still quite expensive. Of the three referred fossil fuels, natural gas is by far the one with fewer emissions of CO2 to reduce global warming, which worry all of us. Natural gas CO2 emissions are lower in 40 to 50% when compared to coal and 25 to 30% to oil and oil products. Therefore, public policies of countries that signed binding agreements should be aimed at massively replacing coal and oil with natural gas. This will enable us to reduce emissions and reach the target of increasing temperature less than 2 degrees Celsius. Abundant energy is imperative (storable and not intermittent) to sustain the world energy demand in the long run and thus trigger more economic growth and reduce poverty for millions of people. As we will see natural gas has this condition. There are close to 6,550 trillion cubic feet (TCF) of conventional natural gas reserves that give us approximately 55 years of life at current rates of consumption. The recent technological breakthrough of shale gas gives us another 7,300 TCF and adds another 61 years. Total we have 116 years and of course there are more conventional resources and shale gas resources that could be discovered at a later date. Vast quantities of methane hydrates (natural gas) exist in several coasts of the planet and still don’t have technology to be developed commercially. Thus, without any hesitation, natural gas is the source of energy that we have at hand for transitioning to other abundant and cleaner energy sources to be developed in the future. We can name a number of other virtues and advantages of natural gas: combustion efficiency in combined cycle plants to generate electricity (about 70% vs. 35% of other fossil fuels), lower degree of parts weathering when used in engines and machinery, etc. But most important, natural gas can be used as backup for intermittent energy sources such as hydro, solar and wind power that we also need to be promoted to reach the objectives outlined in COP 21. Countries that have signed COP 21, for the reason noted above, will have to promote public policies and strategies to favor new uses of natural gas to replace and slow down the burning of coal in power generation and oil in the transport sector. More electric vehicles based on electricity generated with natural gas and more vehicles with liquefied natural gas (LNG) or compressed natural gas (CNG) are policies that should be promoted in different countries. Embed from Getty Images Public policies and economic resources aimed at scientific research to develop more efficient storage, transportation and distribution of natural gas will be needed. The world needs less costly and more efficient pipeline systems, but especially LNG chain systems “big and small and modular type” that allows us to reach many more places and more users and especially more economically. The planet will need to encourage and provide resources to the scientific community and universities to make technological improvements in applications and uses of natural gas. For example, bunkering systems in ports and airports for ships and planes to operate with LNG and heavy machinery also using LNG instead of diesel oil. The cards are already on the table. We believe that Latin America can take advantage of the economic resources available from COP 21 to turn more towards natural gas and other alternative renewable energy sources such as hydropower, solar and wind. After COP 21, natural gas has become the energy source of the XXI century and we need to take leadership to develop strategies to boost its demand and uses even more. It’s in our hands to do so. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2016/january/12/cop-21-compliance-requires-favorable-natural-gas-policies/ http://everythingshale.com/news/2016/january/12/cop-21-compliance-requires-favorable-natural-gas-policies/ Tue, 12 January 2016 13:00:58 http://everythingshale.com/news/2016/january/08/lowering-the-bar-in-oil-s-limbo-dance/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices It was a chaotic start to 2016 for the oil market, with crude futures plumbing 12-year lows as turmoil in China’s stock exchanges and devaluation of its currency, the yuan, roiled equity markets worldwide, and oil traders sold off on worry over global demand growth. Gasoline, a bright spot for an otherwise dreary 2015 for many in the oil industry, was under heavy price pressure in starting the year following a huge build in inventory and plunge in demand. Nationally, retail gasoline prices have slipped below the psychologically significant $2 gallon threshold, although you wouldn’t know it if you’re in California, where a parade of gasoline unit outages at regional refineries beginning last February with ExxonMobil’s Torrance refinery kept the market product short. Relief for the state’s drivers appears to be on the way, with gasoline inventory building. In the primary wholesale market, basis values for CARBOB gasoline in the Los Angeles Basin plunged nearly 50cts gallon from summer-high levels from the last day of 2015 to the first week of 2016. Retail gasoline prices in LA ranged as high as $4.31 and as low as $2.46 gallon in 2015, according to the Energy Information Administration. In the Chicago primary wholesale market, CBOB regular—conventional gasoline that requires 10% ethanol to be mixed into the blendstock to become finished gasoline, slid below $1 gallon in the opening days of 2016, down more than 20cts gallon from where they ended 2015. Chicago was another region that saw a wide range in retail prices in 2015 from $2 gallon to $3.37 gallon, EIA data shows. Gasoline in the primary wholesale market trades in a basis or cash differential to the futures market on the New York Mercantile Exchange, with the RBOB contract sinking to a new seven-year low of $1.1135 gallon in 2016. The decline by gasoline futures came as domestic and international crude futures tumbled to 12 year lows, and are now on the verge of breaking below $30 bbl. Forward visibility for the oil market is shrouded with uncertainty, although more pain for oil producers is widely expected in 2016. New supply in the global oil market is outpacing demand by one to two million bpd, with the EIA reporting total crude and oil products inventories in the United States at a record high. Moreover, Iran, a member of the Organization of the Petroleum Exporting Countries, stands ready to unleash another 500,000 bpd of oil into the market in the near term with the expected lifting of sanctions following a July 2015 agreement regarding its nuclear program. OPEC doesn’t act like a cartel these days, abandoning its quota policy in November 2014. Instead of cutting production to boost oil prices when they’re low, OPEC’s 13 members (Indonesia recently rejoined OPEC) can produce what they want. This strategy was devised by Saudi Arabia in response to the US oil renaissance, with the unspoken goal to push high cost producers out of the market. OPEC ended 2015 with production at a three-year high, and that’s without the extra barrels from Iran. Global and US oil prices could go even lower absent a sharp drop in world production, with $18 bbl mentioned. It’s not an outlandish forecast, especially when considering crude in Canada hit $20 bbl during the opening days of 2016. Oil prices at these levels are problematic for a host of industries beyond oil drillers, with more than 100,000 jobs lost in the upstream oil exploration and production sector, and for regions of the country that produce this resource. Depressed oil prices limit investment in future production, sowing the seeds that grow supply shortages and price spikes. The auto industry was a big winner in 2015, with low gasoline prices and interest rates and an improving employment picture converging to make it a record year for US vehicle sales. US automobile sales totaled 17.5 million last year, and pickup trucks and SUVs dominated overall transactions. In the here and now, cheap gasoline is a welcome palliative in a world that looks far more dangerous and violent than it has in a long while. It’s a boon for US drivers, and a reason for fuel resellers to be optimistic in 2016.   The post Lowering the Bar in Oil’s Limbo Dance appeared first on Schneider Electric Blog . http://everythingshale.com/news/2016/january/08/lowering-the-bar-in-oil-s-limbo-dance/ http://everythingshale.com/news/2016/january/08/lowering-the-bar-in-oil-s-limbo-dance/ Fri, 08 January 2016 08:05:21 http://everythingshale.com/news/2016/january/07/stripper-wells-and-economical-enhanced-oil-recovery-eor/ Building on Drillinginfo posts about Enhanced Oil Recovery (EOR) earlier this year  in these times of low commodity prices, I wanted to touch on the subject of EOR affordability and access for the operators who manage the hundreds of thousands of underappreciated stripper wells across the US. The National Stripper Well Association (NWSA) states that there are an estimated 771,000 marginal wells in production. Combined they make up 11.3% of the US oil production and 8.3% of the US gas production. These wells are described as marginal because they are marginally economic to produce. The NWSA website states that in that last 10 years, over 131,000 of these oil wells and 48,000 gas wells have been plugged and abandoned. Many of these wells are plugged without ever having undergone waterfloods or tertiary production so they are being abandoned with a significant % of the original oil still in place. With the recent drastic reduction in oil prices, some operators of these marginal wells are laying off, cutting back and shutting in wells in an attempt to just break even, while others are doing the bare minimum to maintain mineral rights . Few of them are focused on technologies which can economically extend the lives of their fields because to date, the cost of stepping up to field wide water, CO2 or nitrogen floods is too cost prohibitive. Other than periodic mini-fracs, hot oiling or paraffin treatments, not much is done to these wells to increase production rates. The day-to-day focus is on reducing repair and maintenance expenses. The Three P’s When you look at shallow stripper wells, what is holding them back from continued profitability is primarily what I call the three P’s –  Pressure, Permeability and Paraffin. As these fields are produced, the wells undergo severe pressure depletion and a corresponding reduction in production rates. With the amount of thermal energy entering the wellbore drops with production rates. Wells get to the point where oil crosses its cloud point threshold and paraffin crystals start to precipitate when the oil moves from the pore space to the open wellbore. If a well’s flowrate is high enough, the continued thermal mass of the oil entering the wellbore can keep the paraffin in solution so that the buildup on the wellbore walls is minimal. As flow rates decrease, the paraffin will create thick deposits in the wellbore which further inhibits the flow of oil. Figure 1 below illustrates how thick some of the paraffin deposits can be. Figure 1 : Paraffin build-up in wellhead plumbing What can operators do to try to mitigate the paraffin and pressure issues? Many of them resort to mini-fracs which temporarily exposes virgin rock and increases the effective permeability of the surrounding rock. These mini-fracs enhance production rates for a time, but eventually the frac’d intervals fill with paraffin and actually become flow barriers. Operators will also resort to pouring barrels of harsh, paraffin solvents downhole like xylene, mineral spirits. Some will try paraffin-eating bacteria into their wellbores in an effort to clean them up. The problem with these liquid treatments is that either the liquid drops to the bottom of the well and only treats the bottom-most zone or you have to use enough treatment liquid to create a column of fluid which covers the entire productive interval. The result is either a treatment that is ineffective or cost prohibitive. Hot oiling is another technique that is used to clean these wells but it again doesn’t address the root of the problem which is that the oil is crossing the pressure and temperature threshold required to keep it above its cloud point. What permeability that you have in these wells is of little benefit if the near wellbore is coated in a thick layer of wax with little pressure behind it to push the oil into the wellbore for collection. NextGen Stripper Well EOR Until recently, there hasn’t been a service offering which addresses the 3 P’s of stripper wells without breaking the bank. Approximately 5 years ago a small Houston-based company designed and built a mobile platform that was able to generate a hot, CO2/N2 mixture. They then took things one step further and worked with a vendor to develop a plant based solvent/surfactant product that could be put into a vapor state with the heat from their gas generator. The combined gas/bio-solvent vapor is then used to clean wellbores, re-energize the reservoir pressure and inhibit paraffin precipitation in a single treatment. In a cleaning phase, the hot gas/solvent mixture is used to liquefy the existing paraffin deposits gas lift the liquid wax to the surface. Scale, rust, sand and other debris can be cleaned out of the rathole so that pumps can be safely set deeper. Think of this cleaning process as hot oiling without the oil or steam cleaning without the steam. After an initial deep cleaning phase with the pump and rods out of the well, each subsequent treatment is performed by pulling a truck up to the wellhead and connecting to a casing wing valve. The hot, gas/solvent vapor mixture is then pumped down the annulus and into the reservoir with the pump in place. Rig up/rig downtime is just 10 minutes per well. Treatments can be completed in just 2-3 hours with the production enhancement effect usually lasting for multiple months. By placing the plant based solvent into a vapor state, the volume of treatment fluid is dramatically reduced, injection pressures are significantly lower than with liquid squeezes and the solvent vapor is able to touch the entire interior of the wellbore one its way into the pore space. The truck mounted units are also able to generate high-temperature steam simultaneously with their CO2/N2 gas if dealing with heavier oil. Figure 2 below shows one of these units on a well site in Pennsylvania. Unlike most EOR treatments, no pipelines, fixed plants or pumping stations are required. The units are able to access wells in remote areas without spending millions on infrastructure. Figure 2 : NitroDyne unit on location in Pennsylvania Results Figure 3 shows liquefied paraffin being gas-lifted to the surface on a 1650ft deep well.  A significant volume of wax came to the surface as can be seen in the adjacent frac tank photo. The service company was able to monitor the production tubing temperature to ensure that the entire well and tubulars was above the melting point of the heaviest paraffins. Unlike Hot Oil treatments where you flash off valuable oil if it is heated to high, this process is able to deliver the inexpensive gas to the well at 350F or more if needed. The units themselves can run up to 1200F but most tubing packing rubber needs to be kept below 400F. The bio-solvent used in this process also addresses asphaltene deposits unlike hot oiling which just addresses paraffin issues. Figure 3 : Gas lifted paraffin Figure 4 shows a production chart for a group of 9 wells spread across 3 fields in Pennsylvania. You can see that the 5 Venango county wells responded the best and that the average production rate is leveling off after 3 months at a rate that is about double the pre-treatment average. The Forrest data is from a single newer well that didn’t take much gas volume and wasn’t cleaned prior to treating. The Warren wells were so paraffin choked that the service company was unable to obtain circulation with their gas mixture. Wells in that field have subsequently been worked over with a high-pressure cleaning tool which was able to remove the paraffin plugs and prepare the wells for future gas/solvent treatments. Figure 4 : Treatment results from Pennsylvania In a field wide treatment program, the re-treatment economics would be determined and an appropriate program setup. A single truck can treat approximately 60 wells per month. One thing to keep in mind is that these Pennsylvania wells were not big producers to start with. They actually represent the bottom end of wells that would benefit from the treatment. Wells with significant skin damage but decent reservoir pressure would typically show better economics as would wells that had higher, virgin production rates. Wells that had high initial production rates, usually respond with higher post-treatment rates. An eastern operator who piloted this process in it’s early days, ended up using two of these treatment units for the last 4 years. Cost Why is this process cost effective for the stripper wells of the world? First, with a gas generating plant on the back of a truck, you have a mobile solution and no need to install any infrastructure other than a valve on your casing. Second, the process is thermally efficient. The air that is converted to the CO2/N2 mixture doesn’t have to be transported, re-gassified, cooled before compression or treated in any way. The heat generated in the conversion process is used as a benefit in liquefying paraffin, vapor phasing the bio-solvent and accelerating the breakdown of flow inhibiting materials. The heat can also be used to destroy H2S generating bacteria colonies that are commonly found in old wells. While the cost per barrel of the plant based solvent is higher than traditional solvents like Xylene, by using the vapor phasing technique, the solvent can be more efficiently delivered to the wellbore and pore space reducing chemical volumes by up to 80%. Safety From a reservoir perspective, small blips in reservoir pressure that decline over a couple of months, have less chance of causing fractures or out of zone migration issues than a full field re-pressurization. The oxygen content of the gas mixture can be driven down to as low as .02% so there is no chance of ignition. The mixture has actually been used for Nitrogen blankets for large storage tanks and hot work. When you look at the chemical side of the equation, an all-natural product is being used that biodegrades within 90 days and doesn’t need to be recovered in the field or at the refinery.  Traditional oilfield solvents are not nearly as benign. The Future While this process has been used in a huff and puff application for years, I feel that there may be significant upside in using a random, inject and hold technique where a well is treated and then shut in for a month before being put back on production. Each month you would pick a different set of injectors and producers. This approach would constantly change the downhole pressure dynamics and oil flow paths which should result in higher recovery factors. It should largely eliminate thief zones and large volumes of bypassed reserves. With the mobility that a truck mounted, gas injection platform provides, you can afford to change up injection patterns on a monthly basis because you aren’t having to run CO2, N2 or water distribution lines to every single well in the field and manage an infinite number of injection/production scenarios with plumbing hardware and valves. The truck just drives a defined route each month which the operator can modify at will based on production results, casing pressure readings, ect.  Many of these shallow, marginal fields have had little reservoir work applied. By just monitoring post treatment pressure responses at offset wells, you should be able to quickly understand which wells are in communication and to what degree which will assist with refining your treatment program. While most operators are looking to shed marginal assets, I feel that there are technologies like radial drilling, mobile, huff and puff, nano-fluids, ect that can completely turn around the economics of these fields. With so many of these wells having been P&A’d with significant oil still in place, we might use this lull in the industry to re-focus on the low cost, low risk, marginal assets that have been overlooked for so many years. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2016/january/07/stripper-wells-and-economical-enhanced-oil-recovery-eor/ http://everythingshale.com/news/2016/january/07/stripper-wells-and-economical-enhanced-oil-recovery-eor/ Thu, 07 January 2016 13:00:18 http://everythingshale.com/news/2016/january/05/making-mid-30-crude-oil-work-for-you/ Oil in the mid-$30s may not be your friend, but you can make it work for you. You may have heard that sentiment before and wondered how true it really was for you and your business. Sure, the downturn isn’t as big of a deal for the big guys; they can weather it or Maybe if there were only a couple of guys on the payroll to worry about . At Drillinginfo, we have developed a workflow to show you how to thrive in any economic condition. It’s called Well Production Economics and it’s a tool within DI Analytics that streamlines the economic analysis and due diligence process. Estimating production, ROI, and payback period for a potential well used to take days; now it takes minutes to get into a position to succeed with prospects your competitors probably haven’t even considered. This workflow will help you to do more with less, work smarter not harder. Let’s see how it works. Predict Well Production The first step in due diligence is to estimate the level of production we should expect from a specific prospect. In the Well Production Economics workflow, we do that by analyzing historical production from whichever operator, county, or play we are exploring and building custom decline curves. The Graded Acreage tool in DI Analytics grades acreage quality down to the square mile. We can use this tool to select only wells that are from not only the same category (e.g., county, play), but also the same quality acreage. This will give us the most accurate estimate of future production. Estimate Expected ROI Of course, production is not the only factor impacting expected returns. Energy prices, well costs, royalty burdens, taxes, discount rates, etc. are all going to have an impact on profits. The next step in this workflow is to build a cash flow model with data specific to the individual situation. The model takes into account the inputs and predicted production and generates before- and after-tax IRR and payout period for the potential well. Calculate Impact of Changing Variables The outputs we just generated are a good estimate of profits if the inputted numbers for oil prices, well costs, etc don’t change. But, as we know, the oil and gas industry is nothing if not dynamic. What happens if energy prices vary? What if the cost of drilling and completing the new well are much higher or much lower than initially predicted? What would happen if the discount rate is different than expected? The Well Production Economics workflow also has a sensitivity analysis function. This charts the changes in ROI we could expect to see if economic inputs vary. Compare Multiple Opportunities You are most likely not considering just one opportunity. Maybe there are a few prospects in a given county and you are interested in which one is the better deal. The workflow allows you to run comparison analyses between multiple opportunities. Compare the expected ROI or the sensitivity analysis charts for a side-by-side view of where your investment is better spent. The entire workflow we just described takes about 10 minutes to run. DI Analytics is pre-loaded with cleansed analytics-grade data, savings hours or days spent collecting, verifying, and cleaning data, loading it into an economic analysis tool, and analyzing it. With this level of accuracy and speed, you can act on opportunities before competitors are even aware of them. While the competition is struggling with low prices, you could be thriving. With the right resources and tools, it’s quick and easy to identify the best opportunities and to be the first one in line to snatch them up. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2016/january/05/making-mid-30-crude-oil-work-for-you/ http://everythingshale.com/news/2016/january/05/making-mid-30-crude-oil-work-for-you/ Tue, 05 January 2016 13:00:26 http://everythingshale.com/news/2016/january/04/eagle-ford-rig-count-falls-to-87/ Due to the holiday, we are releasing the weekly rig count post early. The Eagle Ford Shale rig count declined by three this week with 87 rigs running across our coverage area by midday Thursday. In recent Eagle Ford news, 2015 has been one wild ride for the region as crude prices plummeted, people lost jobs and companies failed. Read more:  Eagle Ford Shale Year in Review A total of 698 oil and gas rigs were running across the United States this week. 162 were targeting natural gas (same as the previous week) and 536 were targeting oil in the U.S. (two less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 321 of the rigs active in the U.S. were running in Texas. Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below. Eagle Ford Oil & Gas Rigs Natural gas rigs in the Eagle Ford are at nine  this week as natural gas prices increased, trading at $2.33 /mmbtu, a $.39 increase from the previous week. The Eagle Ford oil rig count fell to 78 with WTI oil prices ending the week at $37.47 , a slight decrease of $0.03 . A total of 78 rigs are drilling horizontal wells, one are drilling directional wells, and eight are vertical rigs. Karnes County leads the region in development with 18 rigs this week. See the full list below in the Eagle Ford Shale Drilling by County below. Eagle Ford Shale Drilling by County County Last Week This week County Last Week This Week KARNES 18 18 BRAZOS 2 1 DE WITT 13 13 FAYETTE 1 1 WEBB 8 9 GRIMES 1 1 LA SALLE 7 8 LIVE OAK 1 1 ATASCOSA 8 7 WILSON 1 1 DIMMIT 4 5 AUSTIN 0 0 GONZALES 4 4 DUVAL 0 0 MCMULLEN 7 4 GOLIAD 0 0 FRIO 3 3 LEE 0 0 BURLESON 3 2 LEON 0 0 COLORADO 1 2 MAVERICK 0 0 LAVACA 2 2 MILAM 0 0 MADISON 3 2 ROBERTSON 0 0 ZAVALA 2 2 WASHINGTON 0 0 BEE 1 1 BASTROP 0 0 Eagle Ford Shale News Oil Exports: Good News for Eagle Ford Texas Challenges Methane Rules Magnum Hunter Files Chapter 11 What is the Rig Count? The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count. http://everythingshale.com/news/2016/january/04/eagle-ford-rig-count-falls-to-87/ http://everythingshale.com/news/2016/january/04/eagle-ford-rig-count-falls-to-87/ Mon, 04 January 2016 09:11:49 http://everythingshale.com/news/2015/december/21/shell-bg-shareholders-to-vote-on-merger-in-january/ Shareholder approval is the final remaining hurdle to clear Shell's takeover of its smaller rival, one of the largest energy deals in a decade that will create the world's most powerful liquefied natural gas (LNG) trader. Worth $70 billion at the time of the offer in April, it is worth about $53 billion at current market valuations. BG asked Britain's High Court on Monday for approval to publish its scheme document and to convene the shareholder meetings, the companies said. Court approval is expected on Tuesday, the companies said, followed by the publication of BG's scheme document and the Shell shareholder prospectus. Following shareholder approval, the delisting of an acquired company's shares typically takes around 10 working days. This means Shell's takeover of BG could complete in mid-February. (Reporting by Karolin Schaps in London and Noor Zainab Hussain in Bengaluru; editing by Jason Neely) http://everythingshale.com/news/2015/december/21/shell-bg-shareholders-to-vote-on-merger-in-january/ http://everythingshale.com/news/2015/december/21/shell-bg-shareholders-to-vote-on-merger-in-january/ Mon, 21 December 2015 16:39:34 http://everythingshale.com/news/2015/december/20/congress-kills-us-oil-export-ban/ WASHINGTON, Dec 18 (Reuters) - The U.S. Congress voted on Friday to repeal the 40-year-old ban on exporting U.S. crude oil in an energy policy shift sought by Republicans as part of a bipartisan deal that also provided unprecedented tax incentives for wind and solar power. The Senate, on a 65-33 vote, passed a $1.1 trillion government spending bill that included the measure to lift the export ban and provide five-year extensions of tax breaks to boost development of renewable energy. Earlier in the day, the House of Representatives passed the measure, 316-113. The legislation now goes to President Barack Obama, who was expected to sign it into law. The deal was hammered out in secret talks among congressional leaders over two weeks. Senators Lisa Murkowski, a Alaska Republican, and Democrats Heidi Heitkamp of North Dakota and Martin Heinrich of New Mexico had worked for more than a year to get the deal. Democrats who backed the deal asserted that its provisions encouraging renewable energy were important for combating global climate change. "This is the biggest deal for addressing climate change that we are going to see," Heinrich said in an interview. Heinrich said Democrats may not have been able to get a better deal even if they controlled both chambers of Congress, now led by Republicans. Many Republicans have opposed Democratic proposals to address climate change. Congress, concerned about U.S. dependence on imported oil, imposed the crude oil export ban after the Arab oil embargo of the early 1970s that sent gasoline prices soaring and contributed to runaway inflation. Arab members of the Organization of the Petroleum Exporting Countries (OPEC) imposed the embargo following the U.S. decision to re-supply the Israeli military during the 1973 Arab-Israeli war. http://everythingshale.com/news/2015/december/20/congress-kills-us-oil-export-ban/ http://everythingshale.com/news/2015/december/20/congress-kills-us-oil-export-ban/ Sun, 20 December 2015 21:26:19 http://everythingshale.com/news/2015/december/20/disputes-freeze-hopes-for-south-china-sea-oil-gas-development/ Despite being a potentially hydrocarbon-rich region, the prospects of developing oil and gas resources in the South China Sea have often fluctuated with the state of relations among protagonists in the territorial dispute. The latest flare-up in the spat resulted from growing concerns among key players to China’s reclamation program in the region. The reclamation work – which Rigzone reported earlier citing U.S. estimates provided by The Wall Street Journal – comprised an expansion of artificial reefs in the Spratly Islands to 2,000 acres of land compared to 500 acres in 2014. The island-building program in the South China Sea has become a major regional concern as it transformed “semi-submerged reefs into forward bases with airfields fit for military use” by China. Bloomberg reported Nov. 22 that the reclamation program was focused primarily on the Spratly islands “within waters that carry about 30 percent of global trade. China is building as many as three airstrips there, prompting concern in the U.S. that its actions will provide it with military bases and risk hindering the free movement of shipping.” “The island construction work that is creating vast amounts of new acreage … with buildings, harbors and, most importantly, runways appearing in recent months ... The bases could have a ‘significant impact on the local balance of power’ by helping bolster the forward presence of Chinese coast guard and navy forces,” Euan Graham, director of the International Security Program at the Lowy Institute in Sydney, Australia told Associated Press in an article published in Indonesian daily Jakarta Post Dec. 6. http://everythingshale.com/news/2015/december/20/disputes-freeze-hopes-for-south-china-sea-oil-gas-development/ http://everythingshale.com/news/2015/december/20/disputes-freeze-hopes-for-south-china-sea-oil-gas-development/ Sun, 20 December 2015 00:00:00 http://everythingshale.com/news/2015/december/20/us-oil-drillers-add-rigs-for-first-week-in-five/ Dec 18 (Reuters) - U.S. energy firms this week added oil rigs for the first time in the last five weeks, data showed on Friday, despite continued weak crude prices. Drillers added 17 oil rigs in the week ended Dec. 18, bringing the total rig count up to 541, oil services company Baker Hughes Inc said in its closely followed report. That is about a third of the 1,536 oil rigs operating in same week a year ago. Since the end of the summer, drillers have cut 151 oil rigs. The additions this week showed that at least some drillers were willing to start drilling again even with U.S. oil prices trading below $40 a barrel in hopes of higher prices in the future. U.S. crude futures fell as low as $34.39 a barrel on Friday, its cheapest price since February 2009, as bearish sentiment driven by oversupply rattled the market and was set to lead prices to a third straight weekly drop, the longest streak in four months. Energy traders noted the rate of weekly oil rig reductions since the start of September, about 10 on average, was much lower than the 18 rigs cut on average since the rig count peaked at 1,609 in October 2014, due in part to expectations of slightly higher prices in the future. http://everythingshale.com/news/2015/december/20/us-oil-drillers-add-rigs-for-first-week-in-five/ http://everythingshale.com/news/2015/december/20/us-oil-drillers-add-rigs-for-first-week-in-five/ Sun, 20 December 2015 00:00:00 http://everythingshale.com/news/2015/december/17/china-crude-imports-currency-and-future-demand/ Contrary to its rapid decrease in imports of coal, iron ore, and other commodities, China continues to import record amounts of crude oil . China is likely using current low oil price to fill its strategic petroleum reserves . Because crude oil purchases are typically paid for in US dollars, the decision to increase imports before the recent depreciation of the Yuan looks auspicious today. For example, the listed tanker company China Shipping Development is riding the 9% rise in crude oil imports in the first 11 months of this year to a likely profitable future as crude-oil tanker rates have gone up 16%. Despite reduced Chinese demand for commodities needed for manufacturing and construction , China now manufactures more vehicles than any other nation – so many in fact that employers struggle to find enough workers . The growth in Chinese auto manufacturing has helped nurture and sustain the emerging middle class which must help alleviate government concerns about possible social unrest in light of job losses in coal mining and construction. While Chinese metropolitan areas continue to limit the number of vehicles allowed within city limits due to concerns about air pollution, Chinese President Hu Jintao has pledged to increase investment in rural infrastructure which will likely include additional paved roads and thereby induce more auto sales and use. Now that the International Monetary Fund has agreed to include the Renminbi in its Special Drawing Rights next year, the RMB will likely trade in a larger range than when previously pegged to the US dollar . The People’s Bank of China has recently cut the Yuan’s reference rate to the weakest since 2012 triggering depreciation in anticipation of the speculated increase in US interest rates by the Federal Reserve this month, which may increase the cost of Chinese crude oi l imports in US dollars in the short term, possibly causing a pullback in demand. The PBOC is evidently also concerned about net capital outflows. Julian Evans-Pritchard, China economist for Capital Economics, has noted that the PBOC is selling assets to prevent the RMB from weakening too quickly to reduce concerns that rapid deflation could set back international use of the currency and rebalancing toward consumption. Free market economists generally agree that a nation cannot achieve the Impossible Trinity of reducing interest rates to boost growth while resisting a depreciation of its currency as money flows out of the country. Because China enjoys foreign currency reserves of over $3.5 trillion US, it has plenty of dry powder to defend the RMB should speculators attempt a run akin to the George Soros 1992 run against the Bank of England in 1992. Any defense of the RMB that preserves its relevant strength to the US dollar has the collateral benefit of stabilizing the cost of importing crude oil priced in US dollars. Unless China can force Russia and Saudi Arabia to pay for more crude oil imports in RMB , China’s defense of the RMB will likely make the increased imports of crude oil necessary to grow and sustain its middle class employment and lifestyle more affordable in a future of both volatile currency risk and crude oil prices. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2015/december/17/china-crude-imports-currency-and-future-demand/ http://everythingshale.com/news/2015/december/17/china-crude-imports-currency-and-future-demand/ Thu, 17 December 2015 13:00:46 http://everythingshale.com/news/2015/december/10/make-the-oil-and-gas-downturn-work-for-you/ Even for glass-half-full type of people, the oil and gas downturn is lasting longer than we wish. And for those that are the glass-half-empty type, the slump in prices has lasted so long that you may be passed the bury your head in the sand strategy and on to “something has to be done.” Either way, the scary headlines keep filling our newsfeeds and cluttering our mindshare and can make it feel hopeless, but it doesn’t have to be. Here are 3 ways to make the downturn good for you and your organization. First, you can take time to stop, take a breath, and filter through all the noise that comes in from vendors and evaluate new technology. In the $100 oil days, you’re so busy trying to stay ahead of the other guy, you may depend on me-too, gut-feel or whatever “Joe says” strategies. That level of pressure can cause people to avoid evaluating the tools or technologies that can help them in the market. New technology is always evolving; so in the slower market those tried and true methods you always depended on can be easily leapfrogged with something revolutionary. Give yourself time to evolve. Second, reevaluate solutions you already have in-house that are sub-optimized, or not utilized to the full potential of the product. To quote Allen Gilmer, our CEO, “Don’t use a Ferrari as a flower pot.” Optimizing and streamlining technology takes time and sometimes you may have services or tools at your fingertips you may not be using at all. Now is the time to look at why it was originally purchased and how you can leverage it moving forward. Regardless of industry people under-utilize tools all the time. Perhaps you have a power user in-house that understands a tool in and out, however the rest of the team are novices. Perhaps your power user and advocate for the technology or product left the team, and now the product is totally unused. Making sure the team Learns the tool and understands all of its advantages, not only helps the efficiency in your current organization, adds skills and value to your resume in any organization. The third and most important reason the downturn can be good for you –is that it forces you to get out of the box, innovate, and collaborate in a way that only necessity can. For example, the industry has just started to uncover the tip of the integrated workflow iceberg. In the past, everyone in the industry worked in silos, whether you were a land man, engineer, geologist, etc. The data used by these stakeholders was stored in multiple locations, was not updated on a regular cadence, and could conflict with another silo’s data. This approach created some inherent challenges including error-prone workflows and time-consuming process, as well as the struggle to predict or quantify potential results and returns. Now, we have started to crack down traditional methods and see the evolution of working on cross-functional teams that are developing integrated workflows, with more intelligence and accuracy than ever before. Integrated workflows will be the way of the future; but without the necessity of having to figure out how to be more efficient and do more with less, the industry may not have gotten there as quickly. Remember, the glass can be refilled and we need to be positive to stay ahead in the current environment. Once the price of oil increases, the efficiencies in your company created during these tougher times will be capitalized on and the organization will be stronger than ever before. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2015/december/10/make-the-oil-and-gas-downturn-work-for-you/ http://everythingshale.com/news/2015/december/10/make-the-oil-and-gas-downturn-work-for-you/ Thu, 10 December 2015 13:00:38 http://everythingshale.com/news/2015/december/10/sustainability-embedded-in-electrical-equipment/ Our planet’s population growth is accelerating.  Its inhabitants are hungry for resources—and electricity is high on the list. Sustainability will be one of the major challenges of our future, and there are ample opportunities for sustainable product innovation in the energy field. What makes a product sustainable? It’s one that lasts as long as necessary to fulfill its mission, does not require early replacement due to failure, and is scalable such that it can evolve alongside operating conditions and application growth. It’s also reusable or recyclable at the end of its useful life. One way to ensure product sustainability is to build in serviceability from the start. This means considering future maintenance activities at the design stage— for example, by identifying consumables and positioning them as close as possible to the outside of the equipment. Products should also be built so that critical components don’t need dismantling for maintenance work. They must also be designed for flexibility—so it’s easy to make changes or enhancements if the specs change. Then there’s the need for complete lists of spare parts and a supply chain to get them on site fast. All this, including dismantling at the end of the product’s life, has to be thought of at the drawing board. The digitization of electric equipment is key to sustainability (it’s also key to moving toward predictive and proactive maintenance, but I’ll get back to that). What I mean by digitization is equipping switchgear or power transformers, for example, with sensors and communication capabilities. Sensors can continuously send a wealth of status information and operational data to the Asset Management System through the cloud. This includes data about heat dissipation, for example. Those data let us understand equipment status, which then enables us to identify maintenance or replacement needs. Digitization therefore opens up a whole new maintenance paradigm. Maintenance can now be carried out ONLY when needed, that is, when the switchgear itself says so via its digitized diagnostics. This way, unexpected failures (and the corresponding outage, loss of income and corrective maintenance) can be avoided. So too can regular preventive maintenance visits, which are costly, time-consuming and frequently superfluous. On the other hand, triggered, condition-based maintenance demands a flexible service plan, whereby organizations pay according to the switchgear’s mission and environment. This provides new asset-care options—the ability to tailor a Service Level Agreement (SLA) to business constraints—to balance costs, risks and benefits. We at Schneider now offer such tailored SLAs. It’s another of our contributions to sustainability. To learn more, read our technical paper: Flexible Service Plans and for Increasing Sustainability in Electrical Installations.   The post Sustainability Embedded in Electrical Equipment appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/december/10/sustainability-embedded-in-electrical-equipment/ http://everythingshale.com/news/2015/december/10/sustainability-embedded-in-electrical-equipment/ Thu, 10 December 2015 10:09:03 http://everythingshale.com/news/2015/december/03/increasing-proppant-not-always-the-best-solution/ Seems like it happens all the time, doesn’t it? You’ve been craving your favorite dish at your go-to restaurant all week. You finally get there on Friday night only to find out they don’t serve it anymore. What do you do? You’ve already been waiting for a table for almost an hour, you’ve already pierced the wall of people around the bar and gotten the first round of refreshments, and your group even managed to find free parking. Then, somebody says the words, “We might as well just stay here and try to make the most of it.” You order a different plate, but is it as good? Of course not. And sprinkling extra hot sauce or parmesan cheese on top of it doesn’t make it much better. Still, it is instinctual to try to make the best out of any given situation, even after finding out the results will never measure up to something more ideal. Oil firms are no exception. While working with Senior Geologists & Senior Engineers at a small but successful onshore operator a few weeks back, one of the more surprising statistics that an Analytics workflow yielded was the fact that total proppant usage was actually inversely related to 12 month CUM production. Now, it should be said that the focus area involved fewer than 100 wells and that the relationship was minimal. Even still, pumping more proppant yielded smaller predicted production CUMs. Much to the frustration of the whole group involved, we reconvened with a logical conclusion. They revealed that when they drill the pilot wells and analyze the log data, sometimes they learn that they’re in bad rock. The interval is thin, the porosity/permeability is low, the reservoir is heavily faulted and structurally complex, etc. Geology matters! So, after they learn this, the two engineering parameters they make changes to are lateral length and total proppant. They drill farther out, and they push more sand. Ultimately, what you have are very expensive, very long, heavily-propped wells that have low CUMs. Did production get better after their enhanced completions strategy? Probably. But did it yield a healthy ROI? Likely not. And this is hoping that the Geosteering process goes well. For 250ft thick Bone Spring sand intervals, this may be no problem. But thinner plays like the Marcellus are a different story. And unless you’ve got the most up-to-date logging technology, you may be logging 90+ feet behind the drill bit. And correcting an 18-wheeler worth of pipe is a huge challenge, an incredible time expense, and dollars lost. If they were able to look at acreage and rock quality prior to drilling in certain areas, a lot of these frustrations might have been alleviated. Let’s take a look at the data. At Drillinginfo, we have normalized Engineering parameters and leveraged both existing production & geology to develop our Graded Acreage maps, assigning entire play extents a letter grade. ‘A’ Grade is the best acreage, and it goes all the way to ‘J’ Grade which is the worst. One of the areas we have Graded Acreage calculations for is the Eagle Ford play (FIG. 1). The Eagle Ford is a highly prolific play; the sheer number of wells that we have data for are well north of 10,000. This includes wells that have production and completions data. And depending on what factor you’d like to focus on (spud date to look at the industry at that time, targeted formation, operator-by-operator, county of focus, minimum production/production type), we can bias our analysis accordingly. First, we’ll look at some plots focusing on oil wells drilled post-2009 in LaSalle & McMullen counties in Texas (FIG. 2). The upper left graph shows Total Proppant vs. Cum Oil 6 month. The upper right shows Lateral Length vs. Cum Oil 6 month. Both plots have almost 1400 wells worth of data. And while both relationships have positive correlation coefficients, they are low. The R-squared figures for these two plots are not good at all. And yet, for unconventionals, these two attributes are normally huge factors in improved well performance. We can also look at Graded Acreage comparisons. The bottom left graph shows Total Proppant vs. Graded Acreage at the wellhead on the y-axis, and the bottom right shows Lateral Length vs. Graded Acreage. In this case, A Grade = 1, B Grade = 2, etc. What’s interesting about these two plots is that the longest, most propped wells appear in the D, E and F grade acreage. In fact, there are no +10,000ft wells in A or B grade acreage in these two counties! Let’s take a closer look at two separate wells (FIG. 3). Well #1, spudded in 2012 has a lateral length under 5,000ft, its total proppant was under 3.5 million lbs, and its 6 month CUM oil was over 150,000bbl. Let’s then take a look at Well #2, also spudded in 2012. Its lateral length was just under 10,000ft, the total proppant was over a staggering 13 million lbs, but its 12 month CUM oil was only a hair over 57,000bbl. And yet the wellheads lie within 10 miles of each other. The biggest glaring difference? Well #1 lies within C Grade acreage, Well #2 lies within F Grade acreage. And these aren’t isolated incidents. The data show that while mean CUM oil production for long, heavily-propped wells may be higher, firms that are optimizing well performance by first looking at the WHERE component are spending less time and, more importantly, money, than their competitors who are not taking into consideration the geological & spatial component. http://everythingshale.com/news/2015/december/03/increasing-proppant-not-always-the-best-solution/ http://everythingshale.com/news/2015/december/03/increasing-proppant-not-always-the-best-solution/ Thu, 03 December 2015 13:00:33 http://everythingshale.com/news/2015/december/01/sub-2-gasoline-and-robust-us-vehicle-sales/   Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices The US average retail price for regular grade gasoline slipped to the second lowest weekly price in 2015 in closing out November, and is poised to dive below the $2 gallon psychological threshold for the end-year holiday season, as growing inventory weighs on values. At $2.059 gallon on Nov. 30, the national average price for all formulations of regular grade gasoline is just 1.5cts above the current 2015 low plumbed on Jan. 26 at $2.044 gallon, per data from the Energy Information Administration. A break below the $2 gallon divide last occurred in March 2009 during the Great Recession, although this year’s decline is the result of a global glut in oil supply, not waning demand amid rising unemployment. In contrast, gasoline demand has surged in 2015, and the Department of Labor reported the national unemployment rate for October at 5%, the lowest it’s been since April 2008, with the market expecting the jobless rate to have held at the 5% mark in November. Based on preliminary data, gasoline consumption is on par with 2008 when demand averaged 9.15 million bpd, with record demand set in 2007 at 9.359 million bpd. Through Nov. 20, EIA shows implied gasoline demand—gasoline supplied to the primary market—at 9.141 million bpd in 2015, 321,000 bpd or 3.6% above the comparable year-ago period. The growth in US gasoline demand is driven by low retail prices and an improving economy highlighted by healthy employment. These features have also driven vehicle sales in the United States, which were 5.1% higher than in 2014 during the first three quarters of the year, according to Bank of America Merrill Lynch. WardsAuto reported light vehicle sales in the United States reached a seasonally adjusted annual rate of 18.4 million in November, the third consecutive month with SAAR vehicle sales above 18 million. In a recent note on the Automotive Industry, analysts with Bank of America Merrill Lynch addressed pushback from investors that suggested the cycle of new vehicle purchases is peaking. “While there are a number of reasons why we think this concern is pre-mature, and that the cycle has a long way to run to our 20mm unit estimate in 2018, one of the most important factors driving our conviction is that miles driven is just starting to accelerate and is hitting all-time highs,” said the bank’s analysts. In late November, the Federal Highway Administration reported the moving 12-month total in vehicle miles traveled on US roads in ending September at 3.121 trillion miles. “Yes, 3+ trillion miles is an all-time high for miles driven, but given the relatively stagnant growth for the past five years, we think the pent-up demand for travel (and in turn vehicles) could support growth above this level for the next few years,” said Bank of America Merrill Lynch. As bullish as this sounds for gasoline suppliers caution should prevail. True, new auto sales are surging, and new sales are dominated by light trucks and SUVs that use more gasoline than smaller vehicles. As buyers trade in their aging fleet however, with 46% of the US fleet 11 years or older in 2014 according to the bank, newer vehicles are far more fuel efficient. The EIA in their latest Short-term Energy Outlook forecasts a modest 20,000 bpd increase in gasoline demand in 2016 from this year, “as a long-term trend toward vehicles that are more fuel-efficient continues to offset the effects of economic and population growth on highway travel.” The post Sub $2 Gasoline and Robust US Vehicle Sales appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/december/01/sub-2-gasoline-and-robust-us-vehicle-sales/ http://everythingshale.com/news/2015/december/01/sub-2-gasoline-and-robust-us-vehicle-sales/ Tue, 01 December 2015 14:46:43 http://everythingshale.com/news/2015/december/01/oilfield-production-what-happens-at-the-surface/ Previously, we’ve talked about the depositional environments in major basins; we’ve discussed geological and geophysical analysis of the subsurface; we’ve discussed drilling , casing, perforating and completing ; and we’ve examined how to lift hydrocarbons to the surface. But what are we actually lifting to the surface? Previous to Edwin Drake, hydrocarbons were considered an unfortunate byproduct of drilling for water. In areas with shallow hydrocarbons, like Pennsylvania, there are many historical stories of water wells being flammable . But Drake had a whim there might be a market, and innovated a method to extract oil and exclude surrounding ground water. Within a decade Kerosene was the king of lighting , the whales were saved, and crude oil went on to become the most important component in the global economy. What we bring to the surface when drilling for oil and gas, however, continues to be a mixture of fluids and gases, and the stabilization, separation, storage, dispensation, transportation, taxation, and in some cases disposal of those portions of the production could use some observation. Since that’s a lot of territory to cover, this post marks the beginning of a series that will cover a number of these angles. To begin, we will look at the technology used in the oilfield to separate the hydrocarbons and make them ready for delivery into the midstream. Oil Wells and Gas Wells – Is There a Difference? To a certain extent, yes. Due to the nature of gas vs. liquid as a phase of matter , gas wells often lift under their own pressure, and are thus outfitted with a “Christmas tree” wellhead at the surface, as opposed to the common “beam pump” associated with oil wells. Gas is typically diverted into some sort of pipeline for delivery into the system, whereas liquids can be stored in localized containers and then picked up by trucks (or trains or pipelines) periodically. Oil and gas wells are often taxed differently – in fact there has been something of a boom in re-classifications in the past few years. How Do We Deal The Mix of Hydrocarbons and Water Heater-treaters have been discussed as a crucial piece of equipment to deal with the relatively more volatile condensate production typical of today’s unconventional wells. Today I would like to look at 2 other pieces of equipment that are commonly used to separate gas and oil and water. First, let’s look at The Separator . The Separator is a piece of equipment that is designed to separate any condensed liquid from gas, and additionally separate hydrocarbons from water. This excellent short video shows the standard process. Removing water from the system as early as possible is always important, first because water can make equipment rust (or it can freeze and bust pipes or it can react with the hydrocarbons and create unwanted compounds), and second because you don’t want to pay to transport something if you don’t have to. With that in mind, we turn to The Glycol Dehydrator . Water is a pretty tenacious compound – even as vapor – so we have to take additional steps to remove it before sending gas into the midstream. Glycol is a fascinating liquid that, among other properties, is hygroscopic, meaning that it attracts and absorbs water. A Glycol Dehydrator, therefore, is a device that counterflows glycol through the produced gas and gas liquids, and effectively strips water molecules along the way. The first few seconds of this video gives a pretty good idea of what that process looks like. These are the main pieces of equipment used at or near the well for initially separating the various components of production. In a future post we will look at how operators report their production, and then move on from there. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2015/december/01/oilfield-production-what-happens-at-the-surface/ http://everythingshale.com/news/2015/december/01/oilfield-production-what-happens-at-the-surface/ Tue, 01 December 2015 13:00:02 http://everythingshale.com/news/2015/november/19/liquefied-petroleum-gas-what-you-may-not-know-about-this-life-saver/ Liquefied Petroleum Gas (LPG) and other hydrocarbon products continue to save lives and could save many more if made available to more people. What Is Liquefied Petroleum Gas? The United States Energy Information Administration (EIA) defines LPG as “…hydrocarbon gases, primarily propane … derived from crude oil refining or natural gas processing”. According to the European LPG Association (AEGPL) LPG has “literally thousands of uses in the home, in commercial business, in industry, on the farm and for transportation”. Familiar to many campers who have used LPG products such as Coleman fluid for light and fuel, LPG is the primary fuel source for cooking, lighting, and heating in many parts of the world. Unfortunately not enough people have access to these lifesaving hydrocarbons. Problems With Traditional Solid Fuel According to the World LPG Association (WLPGA) “The survival of three billion people or close to half of the world’s population (41%) depends of cooking with polluting solid fuels (e.g. wood, dung, crop waste, coal and charcoal)”. Because primarily poor rural women and their children are therefore exposed to high levels of household air pollution as a result, many women and children die early deaths because they cannot access clean-burning LPG. The WLPGA says that in 2012 4.3 million premature deaths were attributed to exposure to this kind of pollution, equivalent to one person dying every eight minutes. 13%, or over 500,000, were children under five years of age. According to the World Health Organization (WHO) Global Burden of Disease project (GBD), smoke from solid cookfuel is the fourth most important risk factor impacting global health , just below smoking and just above alcohol. How LPG Can Help According to a peer reviewed article in the International Forum for Respiratory Research journal Inhalation Toxicology, clean fuel stoves when fully adopted can dramatically reduce household air pollution and thereby eliminate between 600,000 and 1.8 million annual premature deaths . According to the World Bank LPG is currently the most viable fuel option for 15% of the world population that lacks electricity . The WLPGA states than in the scenario in which 50% of people using solid fuels switch to using LPG Gas, total economic benefits amount to roughly US$90 billion . LPG Benefits The Environment According to the United Nations Educational, Scientific and Cultural Organization (UNESCO) Encylopedia of Life Support Systems (EOLSS), “The traditional biomass use as energy is leading to forest degradation, deforestation, decline in biodiversity, soil degradation, indoor air pollution and Green House Gas (GHG) emission .” Satellite photos showing the border between the Dominican Republican and Haiti illustrate the profound environmental benefits of making LPG available to people previously dependent on solid biomass fuels. The Dominican Republic began a program to make LPG available to all consumers in the 1990s. The forested area of the Dominican Republic subsequently increased to 28.5% of the total land area of the country, compared to less than 3 percent in neighboring Haiti . Why World Leaders Are Bringing LPG To People The Global Alliance for Clean Cookstoves has created a goal of enabling the adoption of 100 million clean and efficient cookstoves and fuels by 2020. Using a market based approach and led by global business, academic, government, and policy leaders, the Alliance estimates that achieving its goal will save 640,000 lives, including 170,000 children, 1.9 billion trees, and a 61% reduction in spending on fuel per household. Indian Prime Minister Narenda Modi intends to vastly increase India’s forest cover while simultaneously increasing access to electricity and safe drinking water . According go My Gas India, only 20% of 840 million rural Indians now have access to LPG . Increasing rural Indian access to LPG will produce both health and environmental benefits. Ghana’s Vice President Kwesi Amissah-Arthur is crafting a national LPG policy with the goal of giving 50% of residents access to LPG . Not only will increased global LPG access and use produce health, environmental and economic benefits, it also provides ample opportunity for global hydrocarbon producers and refiners to expand market share sustainably . Recognizing the importance of the market, the Bureau Veritas Inspectoract has recently increased its expansion of LPG Sampling and Analysis Capabilities in North America. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2015/november/19/liquefied-petroleum-gas-what-you-may-not-know-about-this-life-saver/ http://everythingshale.com/news/2015/november/19/liquefied-petroleum-gas-what-you-may-not-know-about-this-life-saver/ Thu, 19 November 2015 13:00:30 http://everythingshale.com/news/2015/november/17/how-to-survive-the-drop-in-oil-exploration/ Seeking out new technology and information sources helps E&P companies ride out challenges like the low price of oil. The industry has so many different resources to choose from that E&P companies need to carefully pursue and act on information. According to Oil and Gas Journal , there will be a 17% drop in global exploration and production spending this year, so there is more pressure to spend wisely. Gather information from different sources to realize how economic unconventional wells are and other competitive intelligence that will help you make better decisions. DI Reports display production capacity in different regions and basins Reports Every month, Drillinginfo releases detailed maps and reports that highlight production capacity and critical E&P activity. One map or report could make all the difference to your future plans, especially if you are new to a region. Do you want to learn everything you can about Eagle Ford and Niobrara ? We have reports on those and other plays. If you want to learn about new well production on a national level, we have a report on that, too. Download a free sample report today to see what you’ve been missing. Results: Reports predict production, which helps you understand the trends in a region. You may decide to stay in or leave a region based on these trends. See new wells every month with the DI Index DI Index When you have an accurate rig count, you get a complete view of the oil. Improve your prediction skills with DI Index. It’s the industry’s best index because Drillinginfo uses GPS tracking on rigs and updates the index daily with rig count and drilling permits data. Results: The index keeps track of the top operators in new oil and gas production so you have more insight on the competition’s performance and can predict changes in production. Webinars When you don’t have time to read the entire user manual, how do you educate yourself? Webinars, of course.   Webinars deliver critical information   on products and features. Even if you are pretty knowledgeable about a subject, you’re bound to learn something new. Participating in a live webinar with a question and answer segment is a great way to get quick answers to your most challenging problems. Keep an eye out for on-demand webinars if you miss the live event. Special events are a great source of information Events Attending events like DUG Eagle Ford, which Drillinginfo staff will attend, is a great way to meet with experienced operators and learn more about the industry. According to Harvard Business Review , you can overcome shyness by speaking on a panel and being open to chance encounters. Panels increase your visibility while you get to speak about a topic you are passionate about. On the other hand, chance encounters, like waiting in line, are a good way to talk in a casual situation. More conferences are scheduling time to chat, including lunches and happy hours, so take advantage of them. Results: At special events and conferences, you hear directly from other successful people and you have multiple chances to talk shop with others in the industry. Your Turn What do you think? Leave a comment below. http://everythingshale.com/news/2015/november/17/how-to-survive-the-drop-in-oil-exploration/ http://everythingshale.com/news/2015/november/17/how-to-survive-the-drop-in-oil-exploration/ Tue, 17 November 2015 13:00:43 http://everythingshale.com/news/2015/november/04/the-best-defense-is-a-good-offense-strategies-in-preventing-a-commodity-release-by-lars-larsson/ Pipeline integrity is a term that encompasses many things today: a process of prevention, detection and mitigation of failures. At Schneider Electric, we believe the industry needs to continue to place a strong, if not stronger, emphasis on attempting to prevent an unscheduled commodity release from occurring; because the consequences of failure are predictable, immediate and often grave. Rather than focusing strategies and investment on reacting to potential issues, pipeline operators can take significant, proactive steps in real-time to avoid unscheduled commodity releases from occurring in the first place. The best defense is a good offense, and we strive to provide solutions that focus on helping you prevent commodity releases, not react to them. In this blog, we’ll look at various aspects related to preventing pipeline commodity releases. Design and construction factors Designing and constructing a pipeline sounds easy enough, but as any pipeline engineer will tell you there are a lot of moving parts to ensure the right products can get from point A to point B, efficiently and safely. Operators need to consider the long-term design lifespan of a new pipeline to determine all the different supply and delivery points, and commodity types that might travel through the pipeline. For example, terrain and weather can have a significant impact on pipeline operation, effecting the flow dynamics of the product being transported. A cheap and simple pipeline construction following the shortest route from supply point A to delivery point B may be more expensive for the operator in the long run if that route includes unsafe elevation changes. Using these variables, operators and engineers can use steady state simulation tools to test and analyze the hydraulic profiles of multiple scenarios to select the right route and the right pipeline construction elements to provide maximum safety and operational efficiency. Operation and maintenance factors Once the pipeline is completed, operators need to ensure the pipeline’s integrity is maintained, or even improved over time. As construction is completed on a pipeline, it is recommended that it’s exposed to hydrostatic testing to prove the integrity of the materials used and to identify any potential leaks through monitoring real-time data. A visual inspection of both the inside and outside of the pipeline also is needed to identify the potential source of real-time data anomalies or find previously unidentified risk areas. Internal integrity inspection is performed with Inline Inspection (ILI) technology, known as “smart pigs.” Smart pigs are transported periodically in pipelines and carry high-resolution visual equipment capable of detecting corrosion, dents and other integrity concerns. External integrity inspection has seen significant gains with the installation of advanced camera systems and the use of remote controlled drones. When combined with the data from the smart pigs and integrated with the data from the real-time hydraulic model or hydrostatic testing, these inspections provide critical insights into maintaining pipeline integrity. Human factors Humans are one of the most critical factors in leak prevention, either as the primary preventative measure, or the primary cause. It is essential that training programs not only qualify controllers in the areas of detection and mitigation, but provide extensive experience for prevention and early detection tools to keep commodity releases from occurring. New human machine interface (HMI) designs have been built into the newest SCADA systems to ensure the operator can efficiently access the most critical information. The newest alarm management systems allow for highly customizable alarm hierarchies that help operators ensure their controllers are able to achieve both goals of rapid detection and maximizing prevention. Working with the general public to prevent commodity releases is another prevention strategy that can be executed periodically and in real-time. When looking at the causes of commodity releases, many are associated with mechanical damage — somebody digging close to, or tampering with the pipeline. New intrusion detection technology has made it easier to detect if unsafe activity like digging is occurring near pipelines, or if a theft is being attempted. Meeting new challenges and incorporating best practices is essential, and many of the maintenance and real-time preventative tools can be very economical for the pipeline company; both from the perspective of low-implementation costs, but more importantly in preventing costly impacts to pipeline operation, and public and environmental safety. The post The Best Defense is a Good Offense: strategies in preventing a commodity release By: Lars Larsson appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/november/04/the-best-defense-is-a-good-offense-strategies-in-preventing-a-commodity-release-by-lars-larsson/ http://everythingshale.com/news/2015/november/04/the-best-defense-is-a-good-offense-strategies-in-preventing-a-commodity-release-by-lars-larsson/ Wed, 04 November 2015 03:18:53 http://everythingshale.com/news/2015/november/02/us-gasoline-demand-trends-higher-in-october/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices   Sliding retail gasoline prices continue to bolster gasoline consumption in the United States, with preliminary data showing gasoline supplied to market in late October at a two-month high near 9.35 million bpd. Moreover, if the fourth quarter of 2014 is any guide, gasoline demand will remain strong through year end, albeit below summer highs. To grasp the significance, there were only a half dozen weeks post August from 2011 through 2013 in total that gasoline demand topped the 9.0 million bpd benchmark, data from the Energy Information Administration shows, while in 2014 it peaked during the final week in December at 9.614 million bpd as pump prices were in freefall. This year, EIA shows gasoline demand reached a 2015 high in mid-July at 9.749 million bpd that was also an eight-year high. Implied gasoline demand in 2015 through Oct. 23 is 352,000 bpd or 4.0% higher than the comparable year-ago period, while up 3.4% in the most recent four-week period. Greater driving demand has been spurred by declining retail prices, with the EIA’s US average for regular grade sliding to a nine-month low at $2.262 gallon in late October, with the current 2015 low reached in late January at $2.069 gallon. That compares with a year-ago national average at $3.094 gallon. The retail average is likely to turn up in early November following a late October short covering rally by the gasoline (RBOB) futures contract traded on the New York Mercantile Exchange, which spiked a little more than a dime or 8% during the final week of October to a better-than two-week high at $1.4050 gallon. The price advance followed a decline by the contract to a $1.2484 gallon nine-month low on the spot continuation chart earlier in the month. Technical factors and expectations low prices would continue to spur demand boosted the futures value, which immediately bled into the primary spot wholesale market that would, in turn, bolster supplier wholesale prices in the secondary wholesale market at the terminal before reaching retail outlets. Expectations remain that the US average price for retail gasoline will sink through year end and test the psychologically important $2 gallon benchmark. However, the savings might again pass by consumers along the West Coast, where a short-product market has bedeviled consumers since late February with the loss of a gasoline producing unit at ExxonMobil’s 155,000 bpd Torrance refinery due to an explosion. The refinery located just south of Los Angeles and since sold to independent refiner PBF Energy continues to operate at less than full capacity. The EIA, citing data from Industrial Info Resources, indicates 17% of the West Coast’s fluid catalytic cracking unit capacity will be offline in November compared with 1% or less for the rest of the country. FCC units produce gasoline, suggesting the West Coast market will remain tight on supply. EIA shows the retail average for regular grade gasoline in California at $2.847 gallon in late October, down 54.3cts from the comparable year-ago period and below the $3.897 gallon high for the state averaged in July. The post US Gasoline Demand Trends Higher in October appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/november/02/us-gasoline-demand-trends-higher-in-october/ http://everythingshale.com/news/2015/november/02/us-gasoline-demand-trends-higher-in-october/ Mon, 02 November 2015 07:56:35 http://everythingshale.com/news/2015/october/28/shale-oil-down-but-not-out/ The shale revolution is on hold as a global oversupply of oil and low prices continue to haunt producers. Related:  OPEC Challenges Bakken Shale Drillers In December, OPEC announced that it would not decrease production in order to curb the falling price of crude. OPEC continued this strategy throughout the year, which has caused major economic consequences, including impacting the US shale industry’s output. Since April, oil production in the major shale plays has decreased sharply, with the Eagle Ford being the biggest loser. The Eagle Ford has lost 300,000 barrels a day and other major plays also experiencing a decrease include the Bakken Shale in North Dakota, the Utica Shale in Ohio and the Niobrara in Colorado, Kansas, Nebraska and Wyoming. Total production from shale plays fell by 350,000 barrels. http://everythingshale.com/news/2015/october/28/shale-oil-down-but-not-out/ http://everythingshale.com/news/2015/october/28/shale-oil-down-but-not-out/ Wed, 28 October 2015 00:00:00 http://everythingshale.com/news/2015/october/27/eagle-ford-oil-field-deaths-lead-state/ Eagle Ford counties lead the state in oil and gas related deaths for 2014. Related:  Karnes County Accident Worst in 20 Years As the oil boom exploded over the last few years, so has the number of deaths, according to the U.S. Bureau of Labor Statistics. The agency reports  that number of fatal work injury cases in oil and gas extraction industries were 27 percent higher in 2014, rising to 142 in 2014 from 112 in 2013. http://everythingshale.com/news/2015/october/27/eagle-ford-oil-field-deaths-lead-state/ http://everythingshale.com/news/2015/october/27/eagle-ford-oil-field-deaths-lead-state/ Tue, 27 October 2015 00:00:00 http://everythingshale.com/news/2015/october/27/providence-to-divest-stake-in-spanish-point-area-offshore-ireland/ Providence Resources announced Tuesday that it will divest a 32 percent interest in the Spanish Point Area, in the northern porcupine basin offshore Ireland. The Spanish Point Area includes Frontier Exploration License (FEL) 2/04 and 4/08, which Providence holds a 58 percent equity interest in. Following the completion of the divestment, Providence will retain a 26 percent interest in the license areas. John O’Sullivan, technical director of Providence, commented in a company statement: http://everythingshale.com/news/2015/october/27/providence-to-divest-stake-in-spanish-point-area-offshore-ireland/ http://everythingshale.com/news/2015/october/27/providence-to-divest-stake-in-spanish-point-area-offshore-ireland/ Tue, 27 October 2015 00:00:00 http://everythingshale.com/news/2015/october/08/an-e-house-substation-that-ushers-in-new-technology-and-rethinks-standards/ Prefabricated E-house (HV/LV) substations are a booming, fiercely competitive business. I’m talking about applications that range from PV or wind farm boxes to shore connections and data centres. I’m also talking about distribution substations. Not about secondary substations, but the big ones used by utilities and industry that can operate in harsh environments and, when it comes to the oil and gas segment, in explosion-prone conditions. Yet the only prefab substation standard is the utility-dedicated IEC 62271-202. Its scope is just too narrow. There is clearly a shortfall in international standards. As for local regulations, they are notoriously complex. Functional analysis reveals objectives behind standards The company I work for has developed an innovative E-house substation solution that relies on a new approach to standards, regulations, and specifications. It is a modular, easily liftable and transportable E-house building that uses interlocking metal panels covered by a cladding in sandwich panel technology. We tested our technology against the most stringent requirements and building codes of 28 countries. We benchmarked the E-house’s metal structure against the IBC and EC3 building codes before BCA and tested its fire resistance against EN, AS, ASTM and IMO standards. Our approach is to run functional analyses that give us a checklist of the requirements our technology should meet—structural stability during all life phases, degrees of protection, fire resistance, lifting, and corrosion, etc. In essence, these are all aspects of safety and reliability. But safety and reliability are precisely what lie behind the values and specifications set out in standards, after all. Global design, local production, local requirements We have used the same approach true for local regulations as part of our policy of designing globally and producing locally. Our E-house—with its time-tested, fire-resistant outer cladding—is compliant with regulations across four continents. We leverage our numerous local equipment factories to supply our regional E-house competence centre in accordance with design. On the basis of our standards—e.g,.   execution classes, the same measurement of kg/lm (linear meter)—we designed a customization tool that draws on a global database of some 1,100 steel members of different grades, profiles, sourcing points and, therefore, standards (e.g.,   ISO, ASTM, GOST, JAPAN, BS). Local engineers can thus choose the best fits against criteria like maximum stress and moment withstand in lateral buckling or maximum acceptable deflection. Local presence and actionable knowledge are critical, as it is extremely tricky to meet local regulations to the letter. Once again, we use functional analysis to identify the underlying concerns of safety and reliability and demonstrate through type tests how our technology answers them. Weakness of product-oriented standards versus our solution What if a customer asks, for example, for blast withstand of 3psi as RMS value even for a non-hazardous area? Such a value would be oversizing, as blast wave reflections double the blast, as the ASCE report for petrochemical facilities and process industry practices (PIPs) has clearly explained. With our close local connections and verified technology, we allay our customers’ fears over insurance, focusing on performance everywhere and not only on how to achieve it in only one region. Indeed, we go further than product-oriented standards and regulations, precisely because their product focus is a weakness when it comes to the broad electrical installation needed by customers’ applications. Standards should be oriented toward the best electrical installations for such customer applications as PV or wind farm boxes, shore connections, data centres, or large distribution substations, all of which have different safety and maximum uptime constraints. I’ve actually written a number of papers on the topic. To calculate absolute temperature values in switchgear enclosures, for example, we factor in ambient temperature, temperature rises inside housings, and solar radiation. Product standards don’t. Best of all would be permanent thermal monitoring that meets customer needs for condition-based maintenance. I believe that using functional analysis to support our global-design-local-production approach, our HV and LV E-house can also significantly contribute to substation uptime. Indeed, it already is. If you want to know more click here and, don’t hesitate to leave your comment in this blog, our expert will answer you with pleasure!   The post An e-House Substation that Ushers in New Technology and Rethinks Standards appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/october/08/an-e-house-substation-that-ushers-in-new-technology-and-rethinks-standards/ http://everythingshale.com/news/2015/october/08/an-e-house-substation-that-ushers-in-new-technology-and-rethinks-standards/ Thu, 08 October 2015 06:19:44 http://everythingshale.com/news/2015/october/02/us-gasoline-futures-driving-towards-2015-low/ Fuel Marketer Intelligence: Supply Chain Dynamics to Retail Fuel Prices The seasonal attributes of the gasoline market in the United States are on clear display, with gasoline demand sliding since summer’s end, and gasoline inventory restocked to a pre-peak season level, while gasoline futures dropped 34% in value from the start of the third quarter until its end. Driving demand in the US is greatest during the summer months, and consistently declines from August to September as families wrap up vacations and kids return to school. Although down nearly 5% in September from August, implied gasoline demand remains well above the comparable year-ago period, averaging 4.2% higher than in 2014 during the four weeks ended Sept. 25 at 9.059 million bpd, data from the Energy Information Administration shows, continuing the 2015 trend. The confluence of lower gasoline prices, a better employment disposition in the US and a more confident consumer has spurred greater driving demand in 2015. For the year through Sept. 25, implied gasoline demand is 4.1% above the comparable timeline in 2014 at 9.14 million bpd. US regular grade gasoline averaged $2.322 gallon Sept. 28, a seven-month low, following the average’s sixth consecutive weekly decline. The national average remains on track to slip below $2 gallon by year’s end. Domestic gasoline supply continues to climb, with inventory at 222.0 million bbl—the highest since mid-May. With the exception of a small drawdown in late August, gasoline stocks have increased consistently since mid-August, climbing from a 212.8 million bbl better-than nine-month low. During the second trade day of the fourth quarter, the gasoline futures contract on the New York Mercantile Exchange tested the September low of $1.30 gallon. A break below the technical support point opens the door for a test of the 2015 low of $1.2265 gallon established during the second week of the year. The Reformulated Blendstock for Oxygenate Blending futures contract with nearest delivery reached a 2015 high in June at $2.1858 gallon. The post US Gasoline Futures Driving towards 2015 Low appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/october/02/us-gasoline-futures-driving-towards-2015-low/ http://everythingshale.com/news/2015/october/02/us-gasoline-futures-driving-towards-2015-low/ Fri, 02 October 2015 13:21:59 http://everythingshale.com/news/2015/september/24/increased-efficiency-from-multiple-user-access-to-a-single-simulation/ The typical paradigm within process simulation software is for only one person to have access to a given simulation at any one time. That paradigm is inherently limiting in that typically you need several different people to work on the same simulation, sometimes in different areas, as part of the engineering design lifecycle. This creates all sorts of time delays and potential issues in making sure that the final simulation incorporates feedback and changes from various departments. It is clear that industry requires simulation software to be more collaborative than it is now. Well, that paradigm is shifting right now. SimCentral from SimSci by Schneider Electric has collaboration capabilities built in. Multiple users can work on the same shared simulation simultaneously. So not only can people in the same office work on the same model, people spanning the globe can access and work on the same model at the same time or sequentially. SimCentral promotes collaboration with access to the same simulation on multiple applications and devices, and by multiple users.     Imagine a scenario when you have a potential customer that wants to hire you to simulate their process as soon as possible: Your design engineer in Houston puts the base process together Your controls engineer in Dallas adds and adjusts the control logic Overnight, your engineers in overseas add more units to the process and further tune the process. The next morning your engineer at the customer site in Philadelphia walks through the simulation with your customer and compares the results to plant data. While I am sure the simulation will need to be worked on further, by leveraging you entire global team you can have a preliminary model for your customer in less than 24 hours. Imagine how confident you will be going to that first customer meeting with the potential model. How likely are you to get the job after impressing the customer with a 24 hour turnaround time. Not only are you reacting to your customer quickly, but you are utilizing your workforce more efficiently. This will yield a lower cost of doing business. Engineering firms market their expertise, but in the end profitability  comes down to completing the job as efficiently as possible. Just think how allowing simultaneous global access to the same model will allow you to efficiently leverage your global workforce. The future of process simulation software is here. You can now collaborate with your global team on your process simulation models. You can achieve this workflow today with SimSci SimCentral . Join as at one of our SimCentral Workshops. Out next one is October 8 & 9 th after out conference. You can find out more details here   The post Increased efficiency from multiple user access to a single simulation appeared first on Schneider Electric Blog . http://everythingshale.com/news/2015/september/24/increased-efficiency-from-multiple-user-access-to-a-single-simulation/ http://everythingshale.com/news/2015/september/24/increased-efficiency-from-multiple-user-access-to-a-single-simulation/ Thu, 24 September 2015 09:23:53