Peak Oil News

“The oil boom in western North Dakota has sparked one of the largest migrations to a single area in the United States since the Great Depression... “Communities that once struggled to keep people at all are now struggling to absorb all the newcomers as workers from across the country arrive to seek their fortunes in oil.” Those aren't the words of an oil state politician, nor are they the words of a pro-oil organization's PR specialist... That's how NPR introduced a story about the Williston Basin during morning rush hour this week — the second full week of May 2012. “That's funny,” I thought to myself. "We've been writing about that area for years, and nearly everything we've said has been spot-on." Why are they struggling if we saw it coming? Whose Reality...

Chesapeake Energy has been in the news a lot, lately, concerning both the significant challenges it faces in financing its ambitious development program, and its high-profile CEO, who was recently forced to relinquish his role as Chairman.  The company's stock is trading for half its value one year ago and less than a fourth of its 2008 peak.  Chesapeake is the second-largest producer of natural gas in the US after ExxonMobil, and probably the company most associated with the shale gas revolution, yet it is struggling.  I wouldn't be surprised if skeptics regarded the firm's travails as a warning that the transformative potential of shale gas for the US has been oversold.  However, in evaluating that concern it's important to distinguish among the physical res...

“It's the perfect storm here for drillers, Keith. Not a dry hole in sight.” That's how I was greeted by an old friend as I stepped onto the rig last week. I've heard these same words time and again since my first visit to the Bakken. And I can't blame my friend for his rosy outlook... The rig he runs happens to be in one of the hottest oil fields in the United States. Two Reasons to Remain Bullish As well as things are going for my buddy up in the Bakken, things are about to get even bigger there. Growth is coming — and all we have to do is look to the United States Geological Survey for affirmation. Last May, Secretary of the Interior Ken Salazar announced the USGS will be updating their 2008 Bakken assessment. Just how important is this update and these new oil fields? Re...

It didn't take much to bomb the Bugey nuclear power plant in France... Just a motorized paraglider and an anti-nuclear activist with a serious set of stones. It all went down a couple of weeks ago, when an unnamed activist flew over the 3 GW power station, threw a smoke bomb, and landed safely inside the facility. He said he wanted to illustrate the external dangers of nuclear power. He accomplished much more. You see, the timing couldn't have been better for the anti-nuclear crowd in France. Because just four days after security flaws were exposed at the Bugey nuclear power station, Francois Hollande of France's socialist party won the French presidential election. My friends, Hollande may end up doing more damage to France's nuclear industry than an actual meltdown... Au Revoir, Nuclear...

Your government is ineffective. But you knew that. All it should be doing is providing defense and emergency services and maintaining infrastructure. Instead, it's found ways to inefficiently infiltrate every corner of our lives. Term limits and ending the revolving door of corporate/government payola and employment would do much to fix it. But what politician would do such a thing when they have it so good already? Anyway, that's an essay for another day. Today, just two quick examples of the great progress your public officials are making. Advertisement“The Cobalt Crisis of 1977 was nothing. The 2012 crisis in Rare Earths will destroy us!”In 1977, the price of cobalt soared more than 1,000%...But in just two years, the price of these two rare earth metals could climb 5,377%!

Forget $2, $4, or even $6 for natural gas. When a friend asked me last week where I thought natural gas was headed, my answer wasn't what he expected... It doesn't matter. I'll get to why in just a moment, but first let me say I can understand my friend's concern when it comes to the price of natural gas. After all, we saw prices take a 44% nosedive within the last six months: If you stretch that chart to cover the last four years, you'll see just how sharply prices fell off a cliff. In fact, it was only in April that we started to see the beginnings of a comeback... Making right now the perfect time to buy. Obama Green Lights Natural Gas He may not have the best track record when it comes to energy investments, but at least the president's moving in the right direction — and thi...

Convicted felon, Keith Russell Judd, gives Obama a run for his money in West Virginia, winning more than 40 percent of the Democratic vote against Obama on Tuesday. The state's senators and political experts alike contend that the Democratic primary's outcome is a direct result of West Virginians' frustration with the Obama administration’s stance on coal and energy. Voting for a convicted felon over America's current president sends a powerful message to Obama about his alleged “war on coal mining”. Obama's aggressive energy initiatives to decrease the use of environmentally toxic fossil fuels has sparked a massive uproar in states that depend heavily on fossil fuel industries, ie: West Virginia, where the president's new Environmental Protection Agency policies have sta...

Solar power system developer and manufacturer, Westinghouse Solar, Inc., announced first quarter revenue of $2.4 million today following yesterday's announcement of its merger agreement with Australian renewable energy company, CBD Energy Limited. Total revenue was up 22 percent from quarter one of last year. Interim CEO, Margaret Randazzo, attributes the year-over-year increase to substantial growth in the company's retail channel as a result of increased customer interest levels and improved online sales of its 'solar-in-a-box' kits sold at Lowe's Home Improvement. The firm also reported first quarter gross profit of $242,000, accounting for 10 percent of revenue, up from 8.9 percent in fourth quarter 2011. While Westinghouse experienced significant financial gains this past quarter, Can...

We now know that hydraulic fracturing, or “fracking,” is a powerhouse energy technology. The United States is producing more natural gas than it has in years... Last year at this time, there were 1.736 trillion cubic feet (tcf) of gas in storage. Right now, there are over 2.576. The EIA says we'll have 4.096 trillion cubic feet in storage by October, which is pretty close to maximum capacity of 4.103 tcf. Fracking is growing so fast, we're drilling a record amount of wells each year. Last year saw a record 16,000 fracked wells. The estimate for this year is 19,000 new wells. The Chinese and Europeans have spent billions upon billions in joint ventures and acquisitions to learn how to frack from us. Because of the abundant production, natural gas prices are now the lowest they'v...

Crude oil prices fell to a near three-month low on Tuesday following a sharp downturn on Monday due to diminishing demand and a worsening outlook surrounding the Euro-zone crisis. Brent crude oil dipped below $112 today, the fifth consecutive day of losses, down six percent. Growing concern over signs of a global economic slowdown throughout much of Europe and the U.S. is driving down prices of crude oil, which fell $1.37 to a low of $96.57 a barrel after trading as low as $95.35 in New York on Monday. The stunted growth of the U.S. economy mixed with weak fuel demand has analysts doubting its ability to maintain growth levels amid fluctuating energy prices, predicting weak mid- and longterm growth prospects. But despite a grim status report of current economic conditions, the sharp downtu...

Last month I found myself an unwilling participant in a heated argument between opposing sides of the hydraulic fracturing debate, a story that's been played out on the media stage for years — and especially since 2008. The opponents: a protester, his placard touting the latest anti-fracking slogan, and an employee of a company drilling in the U.S. oil patch. The last place I wanted to be that morning was standing between the two. There was certainly no shortage of animosity as they stared each other down. I, for one, understand both sides of this fight... Two Sides of the Fracking Coin On the one hand, it's impossible to ignore the benefits that come as a result of developing our tight oil and gas resources. Pennsylvania made about $3.5 billion in revenue from the Marcellus during 2011...

I've just returned from a business trip to Norway.  One of the first things I noticed upon my arrival there, on the way into town from the airport, was the price of gasoline.  Since Norway still uses its own currency rather than the Euro--lucky them--I had to look up the exchange rate before I could calculate that 15.40 Norwegian Kroner per liter equated to a penny or two under $10 per gallon. I'll bet that Norwegians would be ecstatic if it were only $4 a gallon.  Gasoline isn't the only thing that's expensive in Norway--a draft beer was $9--but the remarkable thing about its price there is that, unlike nearly all European countries, Norway is a net exporter of both oil and refined products, including to the US.  Most major producing count...

Last week a company called Planetary Resources, Inc. announced its intention to develop the means of exploiting minerals from near-earth asteroids on a for-profit basis.  This news got some attention for its novelty, particularly at a time when the concerns of most companies are distinctly earthbound.  It also attracted sneers from some in the financial press, though the author of a particularly scathing analysis in the Financial Times seems to have confused recovering material on the scale of a NASA space probe with the kind of large-scale mining that Planetary Resources contemplates.  I don't know whether there's a pony in there or not, somewhere down the road, but there's certainly a larger message to be gleaned: The company's announcement se...

While the average pump price of gasoline has held the attention of most Americans for much of this year, the price trend for natural gas has been equally dramatic in the opposite direction. Gasoline prices flirted with the psychologically important $4 per gallon mark for several weeks before receding to around $3.82 today.  Meanwhile natural gas prices continued their steady drift downward, briefly crossing $2 per million BTUs (MMBTU) before recovering slightly.  To put this in perspective, when the spot price of natural gas bottomed out at $1.82 earlier this month, it was selling for the energy equivalent of oil at $10.56 per barrel.  The last time oil prices were that low was during the Asian economic crisis of the late 1990s, and we're still feeli...

The quality of media reporting on energy has improved significantly since I started this blog in 2004.  However, one subject on which I think the state of energy reporting still leaves much to be desired concerns the role of market speculation in setting oil prices.  It's a complex issue, and it has become highly politicized this year. Doing it justice requires more than just the obligatory video of the New York Mercantile Exchange (NYMEX) or interview with a "floor trader". I've encountered plenty of speculation on how much lower prices might be without the influence of speculators, but I've yet to see anyone go the next step to ask how prices might be set in the absence of any speculation at all.  This is an important question, because the pri...

One of the biggest challenges in assessing the environmental benefits of electric vehicles is that electricity is generated in so many different ways, with differing costs and consequences, and that patterns of generation vary by region, season, and time of day. As a result, categorical claims that EVs are always greener than the hybrids against which they compete most directly, or even compared to efficient non-hybrid compact gasoline or diesel-powered cars, must be suspect. The Union of Concerned Scientists (UCS) has just issued a report that takes some of the mystery out of such comparisons, including a helpful map showing likely greenhouse gas emissions associated with EV use expressed in terms of equivalent miles per gallon from a gasoline vehicle. The takeaway is that as of now, the...

How often have we heard that installing renewable energy sources like wind and solar power will improve US energy security and reduce oil imports? There are other reasons for promoting these technologies, but this one has little substance, because we generate less than 1% of our electricity from oil. Ironically, this logic looks much more relevant to the part of the world with the largest oil reserves and that accounts for the lion's share of global oil exports, the Middle East. This week's Economist reports that Saudi Arabia generates 65% of its power from oil, and the impact on its oil exports could grow dramatically as the country's population and economy expand. Other Gulf producers have similar profiles. The Saudi government's strategy to increase its use of nuclear and renewable ener...

Has the high cost of fuel got you down? Why not buy your own oil refinery? That's apparently what Delta Air Lines is considering. With jet fuel purchases constituting one of the largest operating costs for carriers like Delta, and with several refineries in the Northeast US facing permanent closure due to poor profitability, it's not hard to see why this idea would seem attractive, at least superficially. However, there are a host of reasons why most of the press I've seen on this story is negative, including today's Heard on the Street column in the Wall St. Journal, entitled, "Delta Chases Fuel's Gold." The fundamental problem is the same one that has made me skeptical about the benefits of airlines investing in the production of renewable aviation fuel: Any advantageous pricing they may...

I saw in Tuesday's Washington Post that the EPA was ready to issue its proposed rules for CO2 emissions from new power plants. When finalized, these rules would apply to facilities larger than 25 MW that begin construction more than a year hence. As the Post notes, the chosen CO2 emissions limit of 1,000 lb. per gross Megawatt-hour (MWh) generated would make it virtually impossible for a new conventional coal-fired generating plant to comply with this requirement. That looks like another positive for natural gas, which is coal's nearest competitor today. It might also help baseload renewables such as geothermal, since wind and solar power don't ordinarily compete directly with coal. However, anyone reading this as the epitaph for coal in the US shouldn't be too hasty, because the EPA has l...

With the President of the United States currently playing the role of pessimist-in-chief with regard to US energy independence, it's refreshing to see that goal raised as a serious possibility by someone whose experience and position give him deeper insights on the subject. A few years ago Ed Morse was running the oil trading operation for Hess, and now he's at Citigroup. His op-ed in today's Wall St. Journal offers an upbeat analysis of the ongoing resurgence in US and Canadian production and the potential for North America to move within striking distance of true oil independence. He doesn't appear to be predicting $2.50 per gallon gasoline any time soon, but he does remind us that permanently higher oil prices needn't be inevitable, although he is also very clear about the obstacles tha...

While we wait to see whether the next big move in oil prices--and hence gasoline prices--is up or down from today's level of around $125 per barrel, two stories in today's Wall St. Journal highlight some of the challenges facing manufacturers of equipment used to produce renewable energy. One concerns the intention of the US administration to seek the World Trade Organization's assistance in easing China's restrictions on its exports of rare earth materials used in a wide range of devices, including wind turbines, hybrid and electric vehicles, and some solar panels. The other is an op-ed offering a solution to the looming trade war over solar panel and wind turbine tower exports from China, modeled on the 1996 Information Technology Agreement that lowered trade barriers in that industry. T...

With US gas prices rising rapidly to record levels for this time of year, it was inevitable that some politicians would start calling for a portion of the oil in the Strategic Petroleum Reserve (SPR) to be released in hopes of moderating high oil prices, which are mainly responsible for the current gas price spike. A narrow majority of Americans apparently agrees. This is a profoundly bad idea, for reasons of both actual US energy security and the uneven effectiveness of past releases. However, rather than railing against this proposal, it occurred to me that there might just be a better way, an alternative that could send the signals that those concerned about commodity speculation wish to send, but without draining oil that we would miss in an actual supply crisis. What if instead of ins...

Two recent news stories highlight the significant shifts underway in China's energy sector, along with the global impact that is already apparent from these changes. Last week the Chinese government announced a new estimate for the country's potential resources of shale gas that is nearly double the Department of Energy's latest estimate for US shale gas. However, having the resource and developing both it and the infrastructure and market to take advantage of it are distinctly different things, as I pointed out in a brief interview on the subject on public radio's Marketplace program. The key to that may be found in a front-page story in today's Wall St. Journal describing the recent pace of Chinese investment in the North American energy sector.When we think about energy in China, we ten...

After returning from a business trip to California, I don't find media speculation concerning the possibility of $5 gasoline later this year quite as far-fetched as I might have last week. Perhaps seeing $4.299 per gallon posted for unleaded regular on many street corners there, compared to $3.699 or so here, gave me a touch of "availability bias" even if I also understand that gasoline taxes in the Golden State are a full 29¢ per gallon higher than in Virginia, and that environmental regulations there make it very much more difficult for refineries to produce fuel that meets California's specifications. Without dwelling on regional differences that could make $5 gas likelier in some places than others, I thought it might be worth spending a moment considering what it would take to reac...

Oil is rarely not political, and with gasoline prices hitting record levels early in a presidential election year, we shouldn't be surprised that both the President and his challengers have focused on energy policy. President Obama gave what was billed as a major speech on energy at the University of Miami in Florida yesterday. After urging more students to study engineering--a sentiment I would strongly second--he laid out his view of the situation and its solutions. He got a lot right, including the long-term nature of the problem and the value of improving the efficiency of our vehicle fleet. But unfortunately, he also missed the mark in many ways and generally reflected the exaggerated fatalism that his administration has consistently exhibited towards oil prices. Boosting domestic sup...

The Obama administration is proposing significant changes in US corporate taxes, as reported in today's Wall St. Journal. If enacted, the corporate tax rate would fall from 35% of income to 28%, although the elimination of numerous tax incentives would subject many companies, including most in the energy sector, to higher taxes overall. On the surface, this looks like the kind of tax reform that has been long overdue; however, as always with such efforts, the details matter enormously. In this case, the details would create an even less-level playing field for US energy producers, while doubling down on the expensive tax benefits currently provided to favored sectors and technologies. It's ironic that this is being proposed just when rising gasoline prices have put the administration on th...

An editorial in today's New York Times praising the energy priorities included in the President's latest budget is little more than a rubber stamp of a set of policies in serious need of rethinking. The goals the Times espouses, of "reducing America’s dependence on foreign oil and giving American workers a fighting chance in the global competition for clean-energy jobs", are perfectly fine; however, what's entirely absent is any critical assessment of whether the expensive programs they chose to highlight will contribute meaningfully to accomplishing them.Start with the reauthorization of Treasury cash grants for renewable energy projects. A quick review of the Treasury's own tracking spreadsheet shows that 77% of the $10.4 billion awarded since 2009 under this program went to proje...

I was only partially surprised to read in MIT's Technology Review that Amyris, a biotechnology company developing renewable diesel and jet fuel from sugar cane, was backing away from the biofuel market to pursue more lucrative products. Fuels are a highly competitive, low-margin business, and it's hard enough to make money refining them even with established technology and a ubiquitous feedstock like crude oil. This is a great, under-appreciated challenge facing every company that seeks to produce new, greener fuels from biomass using processes that haven't yet reached commercial scale or are only just arriving there. The key is either to produce something for which customers will pay better-than-commodity prices, yielding a high margin per gallon, or on such a vast scale that you can surv...

US gasoline prices are setting records for this time of the year, with the current price apparently the highest ever for February, at least in nominal dollars. In fact, the monthly average US retail price for unleaded regular has set new records every month since last October. That isn't quite as dramatic as it might seem, because based on the Department of Energy's data, the previous records for those months were set just a year earlier. Yet it's still a significant drag on the economy--an anti-stimulus, as I've noted previously. Unfortunately, some of the explanations I've seen for these price levels, including the ones offered in last night's CBS Evening News, focus too much on minor factors such as refinery maintenance and commodity speculation, while ignoring the most basic influence:...

I just ran across British Columbia's new provincial natural gas strategy, which includes a specific strategy for expanding liquefied natural gas (LNG) production as a way to mitigate global climate change. That might sound odd to those who are worried--unnecessarily--that gas might be even worse than coal, emissions-wise, but the province seems to have a good grasp of the benefits of replacing coal combustion in Asia with cleaner fuels like natural gas. They've also come up with a unique selling point for their LNG, on the basis that it would be produced using low-emissions electricity and thus have an emissions edge over other LNG sources. Whether this will confer an advantage on B.C.'s LNG by enabling it to collect a premium or capture a larger share of rapidly growing global LNG trade r...

In observing the recent struggles of various segments of the global cleantech industry, including renewable energy and advanced energy technology firms, a pattern is emerging. Today's Wall St. Journal reports "Wind Power Firms on Edge," as the US wind industry hunkers down pending the renewal or expiration of a key subsidy at the end of 2012. A maker of electric-vehicle batteries that received a federal grant to build a factory in Indiana is reorganizing via bankruptcy, wiping out the equity of its original investors. Meanwhile, the US International Trade Commission may be on the verge of imposing retroactive tariffs on imported Chinese solar power equipment. Each of these stories has unique features, but what they share in common is the consequences of renewable energy policies around the...

Last week I attended the media preview of the Washington Auto Show. With its dual focus on cars and energy policy, this is always a high point of the winter for me, even if this year's display lacked a draw of the magnitude of the pre-production Chevrolet Volt I drove at the 2010 show. Instead, I was pleased to find that the emphasis on fuel economy and technology in carmaker presentations was matched by a broad array of efficient and attractive new products. They still don't quite constitute the new car fleet needed for the 54 mile-per-gallon target the federal government requires them to meet by 2025, but in my opinion they're off to a very good start.No one listening to the presentations I sat through last Thursday could have missed the shift in focus from previous years. Performance an...

Anyone expecting the announcement of big new energy initiatives in this year's State of the Union address was disappointed last night. What was new, however, was a welcome shift in the President's emphasis on conventional energy--the fuels he referred to as "yesterday's energy" in last year's speech. Never mind that the resurgent oil production for which Mr. Obama took credit is demonstrably the result of events and policies that preceded his inauguration, or that his administration has pursued policies that have held back faster development. If his remarks signal a return to federal energy policy that expends more than 10% of its effort on the sources that account for more than 80% of the energy we use, we should applaud him. The other new ingredient last night was an effort to ground the...

This Friday at noon Eastern Time I'll be participating in a webinar on The Energy Collective covering the application of innovation to the emissions from oil and natural gas. The topic is timely, not just because of the current debate over the fate of the Keystone Pipeline, but because despite the growing importance of renewable energy, oil and gas will constitute a major part of our energy diet for decades to come. As I was thinking about my remarks, it occurred to me that the best starting point might be a refresher on how the industry's current emissions are distributed along the value chain. For all the heavily-publicized concerns about higher emissions from the extraction of unconventional hydrocarbons such as oil sands crude and shale gas, combustion by end-use applications accounts...

Well, that didn't take long. The administration issued its decision denying the Keystone XL Pipeline application today, rather than using the remaining 34 days in the Congressionally mandated timeline to attempt to find a better solution. This is a prime example of what frustrates so many Americans of all political affiliations about how the nation is being governed. If you read the carefully drafted press release from the State Department, which had been given responsibility for determining whether the pipeline was in the national interest, it explicitly states that today's decision was neither final nor on the merits of the project. Implicit in this document is that today's move is exactly that, the latest move in the game that the President and Congress have been playing with a project...

Filed under: Oil Sands, North America, USA After spending several years carefully reviewing the application from TransCanada for the permit necessary to run its Keystone XL pipeline from the tar sands of Alberta, Canada to the refineries and ports along the Gulf of Mexico, the U.S. Department of State has finally announced a decision. It has decided not to decide right now, saying it will wait until 2013 to decide, so it can spend more quality time examining routing options around certain environmentally sensitive parts of the Sand Hills area of Nebraska. As one might imagine, the decision, or non-decision if you prefer, is being received differently by different people. Some of those opposed to the project are, perhaps prematurely, celebrating a final victory, taking comfort in earlier...

The year ahead appears poised to be another wild ride for the energy sector. A recovering US economy combined with continued strength in China and India will send oil and coal prices toward highs not seen since 2008. Meanwhile, solar and wind power will become increasingly attractive investments and grow their share of the energy pie. Oil: Gasoline Gets Expensive Again The financial collapse of September 2008 took the wind out of oil's bullish run from $10 per barrel in the late 1990s to over $140 in mid-2008. But as the US economy regains its footing (even the housing sector by late 2011), gasoline is shooting back up toward $4 per gallon. Prices recently climbed back above $3 per gallon – meaning that Americans are again sending over $1 billion per day for overseas imports to serve our...

My post is mainly an update to Global Oil Supplies as Reported by EIA's International Petroleum Monthly for September 2010, based on data which the EIA reported in the past few days. I will also briefly present updated information regarding OECD and Non OECD oil supplies/consumption. The stacked columns show crude oil and condensates supplies split among OPEC, Russia and ROW (Rest Of World which also includes OECD), from January 2001 through August 2010. The development in the average monthly oil price is plotted on the left hand y-axis. Note that world oil production has been on a plateau, from late 2004 to the present, with a small dip when prices dropped in late 2008 to early 2009. This graph considers crude and condensate only, excluding natural gas liquids and other forms of liqu...

This is a post that was originally written in 2007. There are regularly stories in the media or in the blogosphere about various pipeline projects that are announced with much publicity, and are seen to have major strategic consequences, or conversely about projects that are more discreet but are seen as the "real" justification for various military or diplomatic acts. For instance, the announcement last month of an agreement between Russia and several central Asian republics about a new pipeline was widely interpreted as a major move against European energy security. Similarly, the war in Afghanistan has often been blamed on a long mooted Turkmenistan-Afghanistan-Pakistan pipeline. These analyses (which are absurd to anyone with a basic knowledge of the oil&gas industry) completely ignore...

This post was originally written by Rembrandt in 2006. Will 730 billion barrels be added to the reserve pool from reserve growth between 1996 and 2025 as estimated by the United States Geological Survey? This post is the third part in a three piece series about the phenomenon of reserve growth in found oil fields. Insight in future reserve growth, often attributed to technological advancement, is crucial in determining the peak of conventional oil production. Parts 1 and 2 can be found here and here. What we learned in part 2 of this series is that the data with respect to reserve growth is utterly confusing. Nonetheless, we need an answer to the question what the future perspectives are for reserve growth in order to; 1) improve forecasting the peak in conventional oil production; 2) Incr...