Two hundred miles southeast of Newfoundland, not far from where the Titanic sank, ExxonMobil is spending $14 billion to drill one of the biggest oil fields in the North Atlantic. Seeing Exxon develop oil fields for Canada is reviving calls for the United States to do the same off its Atlantic Coast — which has been closed for oil and gas exploration for decades. But as Shell’s (RDSA) drill ships continue to run aground in the Arctic, critics say letting Exxon drill off the coast of Newfoundland or the heavily populated U.S. Eastern Seaboard is a mistake. The risks: In 1982, the Ocean Ranger — then the largest drill rig of its type in the world — capsized and sank in nearby waters during a winter storm, killing all 84 crew members aboard. Safety standards have improved since then, but drilling in icy, remote conditions remains one of the most dangerous jobs in the businesses — as Royal Dutch Shell’s ill-fated Arctic foray showed last summer.
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Six months ago two Louisiana sheriffs were shot to death and two more injured in the parking lot of a Valero oil refinery. Six years ago Saudi police halted a pair of armed terrorist attacks on the world’s largest refinery, in one case opening fire on a car that exploded near the facility’s gates.
Guns are more than a theoretical issue for the energy business, which controls much of the world’s most vital – and most vulnerable infrastructure. As the US contends with a public debate given new urgency by a series of high-profile shootings, the issue of security and gun control in and around key energy infrastructure is once again front of mind for many of the bodies charged with monitoring energy security and devising responses to potential threats. Keep reading →
The New York Energy Forum held its annual kickoff meeting last Thursday night, where leading market analysts presented their views about where oil and natural gas markets are headed this year. Sanctions-bitten Iranian crude output, the interplay of fundamentals and financial factors in oil markets and the US petroleum output boom were all topics of discussion.
Global benchmark crudes West Texas Intermediate and Brent have been range bound for the past two years and the speakers expected little change in 2013, despite an uptick in global oil demand. Keep reading →
Russian state-controlled gas giant OAO Gazprom (GAZP.RS) and OAO Novatek (NVTK.RS), the country’s largest independent producer, signed a deal Thursday to create a joint venture to produce liquefied natural gas on the Yamal peninsula in the Arctic, Gazprom said in a statement.
US refining economics have been under pressure in recent years, particularly on the East Coast, where lack of infrastructure or bottlenecks forced some refineries to process crude imported from overseas markets at prices linked to the more expensive Brent benchmark. But independent refiner PBF Energy saw an opportunity and bought 3 major facilities between late 2010 and early 2011 in an effort to access increasing volumes coming on from the Bakken region and Western Canadian oil sands via rail.
PBF acquired 2 refineries located in Delaware City, Delaware and Paulsboro, New Jersey from Valero with a combined refining capacity of 370,000 b/d. Crude was traditionally transported to these plants via barge and ship along the Delaware River, but PBF constructed a crude rail unloading facility at the Delaware City refinery designed to accept shipments from the Mid-Continent and Western Canada at prices linked to West Texas Intermediate – the US benchmark grade – currently trading at a roughly $20/barrel discount to Brent. Keep reading →
Energy security is a key element of national security. The missing piece of America’s energy security policy, in turn, is the glaring absence of a strategy to coordinate and secure the enormous energy resources of the Western hemisphere. Today, America is over-dependent on the increasingly volatile Middle East, China is increasingly aggressive in its quest for energy sources worldwide, and Russia is exploiting its energy reserves not just economically but as an instrument of global power. Clearly it’s important to reduce demand through various domestic means and to increase supply from alternative sources. But for now and even the mid-term future, it is more realistic to generating energy now and in the mid-term via an effective national energy policy which relies on the Western Hemisphere.
The World Economic Forum is getting ready for its high-profile conference in Davos, Switzerland this month and has kicked off preparations with a controversial but eye-catching ranking of global “energy architecture” on a country-by-country level.
After several years of focusing on the outcome of the financial crisis, the world leaders and business titans famous for gathering at Davos may now finally turn their focus to the energy sector, which continues to go through significant convulsions created by shifting fuel markets, renewable energy integration and complex policy debates. Keep reading →
Established LNG project operator Chevron bought out two minority stakeholders in the Kitimat LNG export project located in British Columbia, Canada in a deal announced on Christmas Eve.
Chevron’s financial strength, LNG operational experience and marketing expertise could help the project reach important sales and purchase offtake agreements with buyers. Keep reading →
China’s factories continued their expansion in December, according to a key manufacturing index released Monday. HSBC said its Chinese purchasing managers’ index, or PMI, rose to a 19-month high of 51.5 in December from 50.5 last month. The reading was above 50, meaning that manufacturing is now in a state of accelerated expansion. A preliminary reading of 50.9 was published by HSBC earlier in December. “Momentum is likely to be sustained in the coming months when infrastructure construction runs into full speed and property market conditions stabilize,” said Hongbin Qu, an economist at HSBC.
The uncomfortable relationship between Russia and its biggest natural gas market – Europe – has been undergoing changes as European countries contemplate developing their indigenous shale gas resources and the divergence between oil and natural gas prices that has in turn strained the long held practice of oil-linked gas pricing outside of North America.
In this video from the recent US Association for Energy Economics conference Ariel Cohen, Heritage Foundation Senior Research Fellow discusses some of the emerging regional trends that are shaping future gas flow patterns and Russia’s role as gas supplier. Keep reading →
