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Top Energy News: Morning Roundup from Paraguay to Saudia Arabia by way of Ohio

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West Texas Intermediate opened a bit higher this morning, popping north of $88.00 a barrel, while Brent jumped higher to $109.67 and Nymex natural gas started the day at $3.31/mmBtu.

This time of year fuel prices are usually a mix of short-term weather-driven trading while the broader sector looks at forecasts for capital spending in 2013 (see one bank’s estimate of the global oil sector’s outlook here). Granular company level guidance for the coming year won’t arrive in a meaningful way until full year 2012 results come out at the end of next month, but in the meantime conference meeting rooms will be filled with rumors and chatter about how those big budgets are getting set. Keep reading →

 /  Published December 19, 2012 at 9:30 AM

Breaking Down the US Energy Independence Discussion

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Few topics have received as much attention over the past year as the concept of an energy independent United States. In fact, energy independence featured prominently in the run-up to the US presidential election. But what does energy independence really mean?

In the US, energy can be broken down mainly into electrical power – which accounts for 63% of total US primary energy consumption – and liquid transportation fuels – which account for the remaining 37%. As reported earlier this year in Breaking Energy, the US is already effectively energy independent when it comes to power generation, so it is worth instead focusing on the transportation side of the equation, where the issue of importing energy is more relevant. Keep reading →

 /  Published December 14, 2012 at 12:15 PM

Disruptive Energy Technology: GTL Promises Gas Revolution

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The nation is flooded with natural gas. For the last twelve months, the amount of gas available to the market exceeds five-year averages. With more gas than anyone can use, producers are now looking for new consumers. Two new opportunities have emerged and one could disrupt the nation’s economy in some very positive ways.

Less than five years ago it looked like North America’s natural gas market was going to become highly dependent on foreign imports. Anticipating a growing need to offset declining natural resources, investors built eleven liquefied natural gas (LNG) import terminals along the east coast and the Gulf of Mexico. Seven more were approved by federal regulators. But during the last 12 months, very little LNG was imported. Keep reading →

 /  Published November 29, 2012 at 1:00 PM

SGB’s Jatropha Vision: Jet fuel Grown From Seeds

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Call it the jatropha bubble. When word got out several years ago about the promise of a small subtropical tree called jatropha, it became a biofuel sensation. Advocates claimed the fruit tree was hearty, drought-resistant and could be grown on marginal land. Its oil seeds offered a promising biofuel that wouldn’t compete with food crops. Air Japan, Continental Airlines and Air New Zealand ran test flights of planes using jatropha-based biofuel, prompting more than 100 companies to plunk down millions on jatropha plantations in developing countries. Energy giant BP (BP) sunk $160 million into the farms, and one industry group projected that $1 billion would be invested annually in jatropha. Then everything crashed. Jatropha, it turned out, was much harder to grow than once thought. Yields were inconsistent, and many farmers didn’t have the training needed to manage commercial-scale crops. Most of the jatropha operations shut down.

 /  Published November 26, 2012 at 1:30 PM

Energy Economics: Dismal Science Deals with Good News

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Economists tend to be very good at finding reasons things won’t go well, and it is part of their professional mission to detail and warn the many potential pitfalls for companies, governments and individuals facing a complex and uncertain world. So how does the profession of energy economics in North America deal with an unexpected outbreak of good news?

Rising production of oil and natural gas based on falling prices has made many of the anticipated problems with transitioning to a cleaner economy less immediately urgent, and despite the recent problems with the transmission grid and generation system exposed by Hurricane Sandy in the Northeast, the US has in large part navigated a period of low demand for electricity without a sharp slowdown in needed investment. Keep reading →

 /  Published November 8, 2012 at 9:00 AM

BP/Rosneft Deal: What About Oil & Gas Reserves and Production?

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BP’s heads of terms agreement to sell its 50% TNK-BP stake to Russian oil giant Rosneft was major news this week. But there was little mention of how oil and gas reserves would be treated as part of the transaction.

This is perhaps the most important aspect of this deal because reserves are one of the main factors that go into valuing an oil company. “On completion of the proposed transaction, BP expects to hold 19.75 per cent of Rosneft shares, including BP’s existing holding of 1.25 per cent, and to have received $12.3 billion in cash,” according to BP’s press release. Keep reading →

 /  Published October 29, 2012 at 1:00 PM

Oil Companies Clamoring for Ultra-deepwater Rigs

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The global fleet of ultra-deepwater oil rigs was increasing steadily until April 2010, when regulatory aftershocks from BP’s Macondo disaster slowed its overall growth rate. But now, two years after the Gulf spill, there are indications that drilling in the ultra-deep could be poised for a long-term surge.

One of the key indicators is rig demand. And a Barclays equity research report says oil companies are clamoring for rigs designed to operate in water depths of 7,500 feet or more – the generally accepted threshold for the ultra-deep space. Keep reading →

 /  Published September 20, 2012 at 8:30 AM

Oil Refiners Launch Counter Offensive on Obama’s ‘War on Fossil Fuels’

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America’s oil refiners are preparing to intensify efforts to press the federal government to drop mandates to encourage the development of advanced biofuels and counter the Obama administration’s “war on fossil fuels.”

The Renewable Portfolio Standard requires that 36 billion gallons of renewable fuel be blended with petroleum-based products by 2022 under the Bush-era Energy Independence and Security Act of 2007. Keep reading →

 /  Published June 12, 2012 at 8:30 AM

Wind: Kansas’ Other Energy Boom

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It’s not just oil that’s turning Kansas’ rural communities into America’s latest boomtowns.
Wind turbines are being built right next to oil rigs, bringing an additional rush of jobs and revenue to the small towns along the southern border of the state — as well as big paychecks to local landowners. BP Wind Energy is currently building the biggest wind farm in the state, and it plans to begin production by the end of this year. The project has already brought 500 jobs to the three counties its wind turbines span: Harper, Barber and Kingman, according to BP. These same counties are also filling up with hundreds of oil workers, as big fracking and exploration companies seek to tap the billions of barrels of oil that are estimated to be in the Mississippian limestone formation.

 /  Published June 11, 2012 at 10:30 AM

Iran Sanctions Could Benefit Oil Majors, Says Moody’s

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An Iranian war-boat fires a missile during the ‘Velayat-90’ navy exercises in the Strait of Hormuz in southern Iran on December 30, 2011.

The fact that some of the world’s largest oil and gas reservoirs are 100% owned and operated by national oil companies could benefit international oil companies if economic sanctions imposed on Iran constrain the country’s petroleum production, Moody’s Investors Service said in a recent note. Keep reading →

 /  Published May 25, 2012 at 11:50 AM
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