International

Energy Sector Disruption: Three Political Lessons from 2012

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Working in the energy sector is an inherently political activity. I once sat opposite a friend of a friend at lunch, and when she found out that I covered the energy business and then quizzed me on the industry’s practices, asked if I found people often wanted to hit me. I don’t find that, but the way a modern economy depends on the energy business means that everyone – along the entire spectrum of beliefs – also has opinions about its politics in ways that don’t necessarily reflect a subtle, shifting, complex reality.

Over the course of 2012, we’ve been focusing on the issues at play in energy politics, and have gathered them together in a special hub that can be found on Breaking Energy here. Keep reading →

 /  Published December 27, 2012 at 10:00 AM

A ‘Different World of Natural Gas’

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Many analysts and energy industry observers did not anticipate the impact unconventional gas and oil produced from tight deposits like shale would have on the industry. Technology and market fundamentals aligned to open vast reserves and facilitate production increases that caught many by surprise and are having wide ranging effects throughout the energy business and beyond.

This video from the recent US Association of Energy Economics conference features natural gas market experts discussing the shale gas phenomenon and what it means for everything from trading strategies to Russian production and export planning. Keep reading →

 /  Published December 26, 2012 at 3:00 PM

Encana and Ferus LNG enter into joint venture to build liquefied natural gas fuel plant in Western Canada http://ow.ly/gd4cg

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Encana and Ferus LNG enter into joint venture to build liquefied natural gas fuel plant in Western Canada http://ow.ly/gd4cg encanacorp

 /  Published December 19, 2012 at 10:05 AM

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

The Other Fiscal Cliff: Chinese Growth Questions?

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For much of the past decade the answer to almost any major economic question had at least a little bit of “China” in its answer, and for energy the growth of what has become the world’s second largest economy and remains its most populous nation has been central to market growth and disruption.

Without China’s growth, oil prices would have been lower, leavening the expensive and much-debated fight over the race to renewable power in the US. With less growth in China, natural gas companies in the US might have had fewer buyers for their barely profitable (or even loss-making) fields as the technology developed to expand production in turn brought down prices. Keep reading →

 /  Published December 18, 2012 at 1:20 PM

Global Oil Industry Spending Happening Outside North America in 2013

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Sustained growth in spending on exploration and production across the globe will focus on plays outside North America, a survey from a global bank concludes, despite the country’s growing profile and its potential to become the top global crude producer in coming decades.

Global exploration-and-production spending is poised to reach a record $644 billion by the end of 2013, a semi-annual Barclays analysis predicts. The spending report also foresees strong oil prices, which have emerged as the principal bellwether for growth in E&P budgets. Keep reading →

 /  Published December 17, 2012 at 2:30 PM

Drilling for Export Dollars

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It is an urban myth that if the oil industry drilled more, gasoline prices would decrease. The myth relies on the premise that as more oil supplies are introduced, market forces would take over and domestic prices would fall. But it turns out that increasing domestic production has virtually no effect on gasoline prices.

The US already increased production. According to the Energy Information Administration (EIA), US oil production reached 310,403,000 barrels per month in October 1970 that became the historic peak. Ever since that time, production changed course and it has been in a steady decline. By 2005, production sank more than 50 percent to approximately 150,000,000 barrels per month. The bottom was reached in September 2008 when production sank to 119,477,000 barrels per month. Since then, for the first time since the 1980’s, monthly production changed direction and it has been trending upward. Last July, the US touched a new record of 196,405,000 barrels per month, a production level the US has not witnessed for over a decade. Keep reading →

 /  Published December 14, 2012 at 8:30 AM

US Oil Prices Could Sink to $50

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US oil prices could sink to $50 a barrel at some point over the next two years, according to analysts at Bank of America Merrill Lynch.

But don’t expect a corresponding drop in gas prices.

Merrill analysts expect US oil prices to still average about $90 a barrel over the same time period. Global oil prices meanwhile, which more closely dictate the price of gasoline in the United States, are expected to remain high as growth in global oil supplies lags population growth and economic output.

Keep reading →

 /  Published December 12, 2012 at 2:40 PM

Oil Market Dynamics: Moving the Bakken Barrel

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The refineries along the US East Coast sit close to some of the globe’s largest energy demand centers, but face such high prices for the crude they process that many have struggled to make money. Many import crude oil from Africa and the Middle East, and have been cut off from cheaper supply recently surging out of the middle and west of North America by limits on transportation infrastructure.

Companies like Enbridge, which presented recently at the US Association for Energy Economics, are seeking solutions to a bottleneck that is preventing lower-priced crude from competing on global or even national markets. Much oil currently travels by rail, as we’ve noted on Breaking Energy before, and may increasingly go multi-modal, from pipelines into rail cars and vice versa as it wends its way to energy-hungry Eastern US and Eastern Canadian markets. Keep reading →

 /  Published December 10, 2012 at 10:30 AM

US Closer to Being Major Natural Gas Exporter

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A long awaited report from the Energy Department issued Wednesday said the benefits of exporting the gas far outweigh the costs.

The report clears the way for the approval of of up 15 pending natural gas export facilities – multi-billion dollar projects situated mostly along the Gulf and Mid Atlantic coasts. Keep reading →

 /  Published December 7, 2012 at 2:30 PM
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