Peak Oil News

Recently, the EIA dropped another bombshell on the shale gas boom. We've had front-row seats to the surge in natural gas production that's taken place in the United States over the last seven years. And finding those plays has never been much trouble. According to the EIA, almost 90% of the total technically-recoverable shale gas resources are located in just three regions: the Northeast, Gulf Coast, and Southwest. But lately, the government has been sending mixed signals when it comes to shale gas... AdvertisementSign Up for Our Complimentary Gold Seminar Our FREE gold and silver seminar shows you how to: Protect your wealth from the fall of the European Union Insulate your investment from volatile gold prices Enjoy TAX-FREE gold and silver profits Profit from gold's ups...

Wind energy hasn’t been getting the hype it deserves this past year, especially with so much focus on solar power and the rapidly declining price of solar panels. But quietly building its profit was NextEra Energy Inc. (NYSE: NEE), a company that works heavily in renewable power, particularly solar and wind. In the fourth quarter of 2011, NextEra was able to double its net income from a year before. In 2010, the company had a net income of $263 million, compared with its new announcement of $667 million. That’s an increase of around $0.96 per share. A large part of this was an increase in profit by the wind and solar sector of the company. Here, profit rose from $72 million to $402 million. The company reported that its wind turbines became more efficient in the past year, as...

With all the talk about shale gas, I want to make sure you don't forget about other energy bull markets that are forming. We all know oil's back over $100 as the economy starts to rebound. And natural gas prices are at decade lows because of abundant new supply. But what's up with uranium? If you remember, there was a mania-stage bull market back in 2007 when per-pound uranium prices ran from $70 to $135 in six months. The financial collapse brought prices back below $80 by the end of that year, and they continued to skid for three years, settling in the low $40s by summer 2010. A rebound in uranium prices started in late 2010, and they rose to $65 by March 2011. Then the Japanese earthquake happened and prices fell back to $50, where they stayed until very recently. All this is better rep...

In his recent State of the Union Address, President Obama outlined a comprehensive plan to increase jobs, increase natural gas and clean energy production, and reduce our dependence on foreign oil. In order to optimize domestic oil and gas resources the Domestic of Interior is to lease out 38 million acres in the Gulf of Mexico, potentially yielding 1 billion barrels of oil and 4 trillion cubic feet of natural gas. The Department of Interior is also expected to finalize a deal that makes 75 percent of offshore resources available in the Gulf of Alaska. The president also put forth a plan that aims to harness America’s nearly 100-year supply of natural gas, which could create more than 600,000 jobs, a move coupled with rules that would require the disclosure of chemicals used in frac...

They're playing a global game of chicken. At stake: nearly one-fifth of the world's oil supply. And it appears as though nobody wants to flinch first. Sure, we've heard the bluffing before; but the latest warning from Iran that they will definitely close the Strait of Hormuz if the EU oil embargo interrupts their crude exports could prove disastrous. Of course, Obama made his position clear during his State of the Union address on Tuesday night — and it didn't bode well for a peaceful resolution: The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this press will not relent. Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off t...

On Tuesday, President Barack Obama’s State of the Union address outlined a number of successes in the recent past and focuses for the nation moving into 2012. One of the hot topics was his attention to clean energy. The President noted that in 2011, the United States cut down dependence on foreign oil, but he acknowledged that this small decline isn’t enough. He called for a move away from oil subsidies, turning toward renewables instead. “It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable and double down on a clean energy industry that never has been more promising.” One way to end foreign dependence is an increase in renewable forms of energy, and he proposed providing more incentives to energy companies. He urged Con...

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...

We've been meandering down a path of energy insecurity ever since the Carter-era gas lines. As a nation, we use 19.14 million barrels of oil every day. We produce just 7.51 million barrels per day (mbd). We are 61% energy dependent. This isn't opinion; this is a fact taken from the most recent data right on the U.S. Energy Information Administration website. The rest comes mainly from three countries: Canada, 2.53 million barrels per day Mexico, 1.15 million barrels per day Saudi Arabia, 1.08 million barrels per day No other country gives us more than a million barrels per day. Nigeria and Venezuela used to, but we now get 983 mbd and 912 mbd from them, respectively, as Peak Oil's grip takes hold. The question has always been: How do we cut our 61% (11.63 million barrels per...

We can't help but feel sympathetic for Montanans. Much like the rest of the country, Montana's oil production was in a downward spiral for as long as anyone could remember. Between 1981 and 1999, the state's output was cut in half. Things weren't looking good... But at the turn of the century, good news finally struck. (Remember, we're talking years before the shale revolution began — nearly a decade before the USGS's reassessment of the Bakken formation in 2008. The newfound success was thanks to the discovery of the Elm Coulee oil field, located in Richland County on the eastern edge of the state, in 2000. By 2005, development was in full swing:By June of 2006, Montana reached the 100,000 bbls/d mark for the first time in history (with more than half of that amount coming from just Elm...

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...

Apache Corp (NYSE: APA) was up on Monday after announcing its decision to purchase Cordilla Energy Partners III.The deal, worth $2.85 billion, will be paid in both cash and stocks, and it will add a large number of valuable assets to oil and gas company Apache.Cordillera owns 254,000 acres in the Anadarko basin, an oil- and gas-rich shale formation that stretches across Oklahoma and Texas.Along with the acquisition of this acreage, Apache will also receive the company’s 71.5 million barrels of oil equivalent.Cordillera currently produces 23% liquid gas, 30% oil, and 47% gas from its wells and obtains most of its revenue from these sales.Apache will be adding to its already strong foothold in the Anadarko basin, an area it has been developing for 50 years. This deal will add power to...

From 2005 to 2008, I made an absolute fortune in solar. And it was insanely easy, too. Hell, back then you could pretty much just pick any random company with the word “solar” attached to it, and watch your money double, triple, even quadruple. Yes, those were three great years. And I live very comfortably today because of those three years. But the solar market isn't what it used to be. Last year, solar stocks got slammed. And while most expect to see a recovery in the space this year, the sector remains as volatile as ever. Now just a few weeks ago, solar stocks were soaring after some new data came out that indicated a rise in solar installations in Germany in Q4. The result was a quick run on solar stocks, and certainly traders made out... But then there were those poor so...

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...

A pair of items in today's Financial Times could signal a longer run of high oil prices, even if Europe were to slip into recession and economic growth elsewhere slow. The first article (registration required) reported that Saudi Arabia has raised its target oil price to $100 per barrel, up from the $75 level that King Abdullah had previously endorsed as "fair." Meanwhile, Venezuela has announced that it would withdraw from a World Bank body for arbitrating contractual disputes, preferring them to be resolved within its own judicial system. That can't be welcome news for companies that had been considering new investments in the country's oil and gas sector. Taken together, these stories suggest both less future supply and a greater likelihood that OPEC would respond to any significant wea...

Yesterday the Environmental Protection Agency released its tabulation of greenhouse gases (GHGs) from large facilities in the US. In perusing the data I couldn't help thinking of the quote attributed to Willie Sutton concerning why he robbed banks. Even if he never actually said, "Because that's where the money is," the simple logic of that analysis transfers neatly to the question of why we might be interested in assessing and ultimately managing GHG emissions from such installations. While there are other important sources, notably including motor vehicles and aircraft, the more than 6,000 sites reported in the agency's online registry account for roughly half of all US GHG emissions. Furthermore, just a quarter of these sites--power plants--contribute nearly three-fourths of US emission...

Without much fanfare, the Energy Information Agency of the US Department of Energy released a report on 2011 energy commodity prices yesterday. It confirmed that crude oil and key petroleum products set annually averaged price records last year. This largely snuck up on us, because it occurred without the kind of dramatic price spike we experienced in 2008 or in the oil crises of the 1970s. Prices rose early in the year, during the Libyan revolution, and they didn't fall much, subsequently. The situation was also masked by the ongoing crude oil bottleneck in the US mid-continent, which depressed prices of the grade of US oil that for decades had been regarded as the best indicator of global oil prices, a role in which it has recently fallen short. These record prices for oil and its produc...

Earlier today I attended a luncheon and press conference rolling out the annual "State of American Energy" report from the American Petroleum Institute. API's President and CEO, Jack Gerard, also used the occasion to launch a new "Vote 4 Energy" campaign, which he described as a non-partisan effort intended to start a conversation about energy during a key election year. He also touched on a number of issues that are very familiar to readers of this blog, including the Keystone XL Pipeline decision, the need for greater access to US energy resources, along with energy security and jobs. A phrase that Mr. Gerard used in his remarks, and that recurred several times during the press conference, was "energy reality." This struck me as an apt encapsulation for the energy policies that should be...

At the start of 2011, I thought the hallmark of the year's energy events and trends might involve regulation, with the White House seeking to implement measures that couldn't garner enough support in Congress to become laws. But for every major new regulation issued, such as last week's release of the new Mercury and Air Toxics Standards for power plants, others were delayed or deferred, including the EPA's effort to regulate greenhouse gases under the Clean Air Act and the agency's proposed ozone standard. Outside of the utilities and other industry groups directly affected by these rules, it seems likely that 2011 will instead be remembered for big, unpredictable events like the Fukushima nuclear accident and the Solyndra bankruptcy scandal, along with several major trends that reached c...

In just under two weeks, standard 100 Watt incandescent light bulbs will be officially banned in the US, in the first step of a gradual phaseout of Edison's technology. However, as a result of recent Congressional action, enforcement of this regulation has been delayed by about a year, leaving the bulbs and the retailers who sell them in a temporary limbo. This change adds to the confusion consumers now face when purchasing lighting products, as our choices have multiplied to include compact fluorescent lights (CFL), LEDs, halogen incandescents, and shortly another new option, the "electron stimulated luminescence" (ESL) bulbs produced by VU1 Corporation. The lighting efficiency standard of the Energy Independence and Security Act of 2007 helped to create this diversity, although it remain...

Late yesterday I saw a headline reporting that Chevron was being assessed more than $10 billion for a spill from its drilling activities offshore Brazil last month. The story was later revised to clarify that the amount in question was associated with a civil lawsuit being filed by a Brazilian prosecutor, rather than an actual fine by the government petroleum or environmental agencies. Either way, the sum involved goes beyond surprising. Given the quantity of oil that actually leaked from an appraisal well at Chevron's Frade platform, it is grossly disproportionate to any objective gauge of the scale of the spill and the effectiveness of the response, which stopped the leak within a few days and reduced the surface oil slick to around one barrel within a couple of weeks, without any oil re...

After going into sudden-death overtime, the UN climate conference in Durban, South Africa wrapped up this weekend with an agreement that only a climate diplomat could love. Constituting in effect an agreement to agree to some future agreement, the outcome is open to interpretation. Is this the failure that was widely predicted, the breakthrough indicated by some involved, or just a fig leaf to perpetuate a seemingly endless series of climate conferences in the only manner possible, by avoiding a breakdown that might have ended the entire effort for good? From what I have read in the last day, it's probably a bit of all three. The reactions from environmental groups have certainly been a mixed bag.Briefly, it appears that the participants agreed to begin negotiating toward a new global clim...

With the end of the year approaching, the annual Congressional debate over extending a variety of expiring federal tax credits and other benefits is gearing up again. Few of these measures are as high-profile as the payroll tax cut, but each has a vocal constituency, including renewable energy. The American Wind Energy Association (AWEA) has launched a major effort seeking inclusion of the Production Tax Credit (PTC) for wind power in this year's "tax extenders" package. That might seem premature, since the PTC won't expire until the end of 2012, until you realize that eligibility for the stimulus-funded Treasury renewable energy grants for which many wind project developers have opted over the PTC ends in a few weeks with little chance of a further extension. However, before simply tackin...

US petroleum product exports have been in the news, along with the welcome discovery that we are apparently on track to become a net exporter of these fuels this year, for the first time since the 1940s. This is a far cry from energy independence, as various oil skeptics have been quick to point out, but it's still a noteworthy inflection point in energy trends. However, I've also seen stories suggesting that US consumers will pay a lot more at the pump as a result of this change, to which the most succinct response so far is "rubbish." Being a net exporter hasn't suddenly connected US fuel prices to the world market, as if they had somehow been insulated from it until now. In fact, we've been exporting products for many years--as I know from personal experience--but for most of that time...

I see that Russia's national gas company, Gazprom, is warning Europeans about the environmental risks of shale gas development. Aside from the hypocrisy stemming from a Russian legacy of environmental disregard that rivals the worst excesses committed anywhere, along with the likelihood of Gazprom profiting if it can deter competition from proliferating shale drilling technologies like hydraulic fracturing (a.k.a "fracking") and horizontal drilling, this looks quite clever. Environmental concerns--exaggerated or not--are the Achilles heel of shale drilling. We've seen how how effective environmental opposition to fracking has been in places like New York state. The mere fact of Gazprom's warning about shale drilling doesn't constitute a winning argument either for or against the practice,...

What if they held a UN climate conference and no one came? That's certainly not the case at this year's COP-17 (Conference of the Parties) meeting now underway in Durban, South Africa, but with expectations for dramatic progress low, and a breakthrough on the scale needed to salvage the expiring Kyoto Protocol nearly unimaginable, it could be where the UN-led process is headed. If Durban fails to deliver the goods, it won't be because the participants were any less concerned about climate change than those at past sessions. Nor will it be because of the latest release of Climategate emails, as embarrassing as some of them should be for the scientists involved. The reason is much simpler, and it's the same one that helped Bill Clinton unseat George H.W. Bush in 1992: "It's the economy, stup...

It's fairly easy to agree on the desirability of shifting our energy diet away from fossil fuels and toward more renewable or sustainable sources, but it's much harder to agree on the time scale involved. While recognizing the great potential of renewable energy technologies such as wind, solar and geothermal power, along with advanced, non-food-based biofuels, I am convinced that the transition will take much longer than many hope--longer than many will have patience for, in light of pressing concerns about energy security and the environment. When considering future shifts in our energy diet, it's instructive to review some of the changes we've already experienced, and how long they took. The graph below displays the relative contribution of America's main energy sources since 1949, base...

It has been widely assumed among pundits and policy makers that the continued expansion of solar photovoltaic (PV) installations will drive down PV costs until the electricity they produce is competitive with conventional power sources without the need for subsidies. This belief is grounded in both recent PV cost trends and the well-known "experience curve" effect in manufacturing, in which costs tend to fall in proportion to cumulative output. However, anyone following the fortunes of big PV manufacturers like First Solar, SunPower, and China-based Suntech and Trina Solar might have reason to question this conventional wisdom. Their latest earnings reflect an industry stressed by softening demand in its core market in Europe and facing global overcapacity along the supply chain. This has...

Between the Libyan revolution and the shaky US and European economies, oil markets hadn't been paying much attention to Iran's nuclear program until last week's release of a new report from the International Atomic Energy Agency (IAEA.) For the first time, the IAEA presented a detailed picture of a well-organized Iranian effort encompassing projects and technologies that go beyond what could reasonably be construed as having purely civilian purposes. Traders are once again talking about an "Iran risk premium," though the market's initial response has been sufficiently muted that it's hard to distinguish from other factors, such as the narrowing of the spread between West Texas Intermediate and Brent crude and worries about the Euro. As long as the international reaction to Iran remains con...

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...

In an article in today's Washington Post an official of the National Wildlife Federation was quoted linking rejection of the Keystone XL pipeline with breaking our addiction to oil. Even with the administration apparently having delayed its decision on the project until 2013--quite possibly killing it--this point merits further exploration. Just how might we go about breaking that "addiction", and when could we reasonably expect the task to be accomplished? As with everything else to do with energy, the answers to those questions must be based on facts and figures, rather than wishfulness.The brief quote and its context imply that a decision to forgo additional supplies of oil from Canada or any other source would, by itself, move us significantly closer to breaking our addiction to oil, a...

A year from today Americans will know who will serve as President from 2013 to 2017. Even though $4 gasoline was still fresh in the minds of voters, energy played only a minor role in the outcome of the 2008 election, overshadowed by two wars and a crippling financial crisis. Will that be the case again in 2012, or will energy loom larger, propelled by its close connection with the economy? Several Republican candidates have already raised energy as a campaign issue, and the administration has repeatedly emphasized the linkages between energy, jobs and taxes. Whether any of those arguments gains traction in a race that at this point seems likely to be dominated by unemployment and deficits could depend on how deftly the administration handles decisions such as the Keystone XL Pipeline perm...

Last week US liquefied natural gas provider Cheniere signed a long-term agreement to sell BG (formerly British Gas) LNG exported from the Gulf Coast. The governor of Alaska was also recently quoted suggesting that his state's surplus natural gas might find a better market in Asia than if sent to the lower-48 via a new pipeline. Both stories indicate just how much the shale gas revolution has altered the US energy balance. They also provide further validation of its likely staying power. Coincidentally, they reminded me that time was running short to respond to my residential gas supplier's offer to lock in an annual fixed price, as I did last year. That's relevant, because even though the risk of a big spike in natural gas prices looks very low now, the prospect of future US gas exports--a...

Another firm that received a loan guarantee from the Department of Energy has just filed for bankruptcy. Beacon Power had drawn down $39.1 million of the $43 million authorized by the DOE for the construction of its 20 MW energy storage facility in Stephenstown, NY, but was still operating at a loss and unable to find additional backing. As was the case for Solyndra, the DOE's "loan guarantee" actually took the form of a direct loan from the Federal Financing Bank, an arm of the US Treasury, rather than from a commercial bank or other private-sector lender. If two data points can indicate a pattern, the one here reflects poorly on venture capital decisions made solely by government officials lacking any stake in the eventual outcome of the investment. Real venture capitalists make bad bets...

Some days the economic news seems to emanate from the Twilight Zone. When the official summit document from Wednesday's meeting of EU leaders seeking to avert another financial crisis includes a reference to repaying a portion of Greek debt with the output of a huge PV array that might not be completed for several decades, if it is built at all, I don't know how else to describe it. And that's before considering the perplexing economics behind the Helios scheme, which apparently entails Germany or other EU members investing or lending--after lenders have just agreed to take a 50% haircut on previous Greek debt--up to €20 billion to build a 10 GW PV installation in Greece to generate power that would be sent to central Europe via transmission lines that don't all exist yet. Either I'm...

The US renewable energy faces a greatly altered incentive environment next year, as eligibility for two of its largest current subsidies comes to an end at the close of 2011. The corn ethanol sector will likely see the complete withdrawal of the blenders' credit that has fueled its growth for more than 30 years, while new projects generating electricity from renewable energy sources must shortly attract investment without the Treasury grants that provided up-front cash in place of federal investment tax credits against taxable income--a commodity sometimes in even shorter supply among recipients than the energy they seek to generate. With these expirations taking place against the backdrop of a US presidential election campaign and record levels of deficit and federal debt, the prospects f...

Yesterday I received a press release announcing the results of a new poll on US consumer attitudes towards energy conducted by the McCombs School of Business at the University of Texas in Austin. I wasn't surprised to see that a plurality of the poll's respondents thinks the country is headed in the wrong direction on energy--triple the proportion that think we're on the right track--and many expect the situation to get worse in the next 25 years. That meshes with numerous readings on Americans' views of the overall economy. The poll also showed consumers broadly dissatisfied with the job that government and industry are doing in this regard, though the renewable energy sector, along with engineers, scientists and academia received somewhat better marks. At the same time, the results on se...

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...