The Green Stocks

David Strahan - Dump the pump: could peak oil be voluntary? People have fretted about when the world’s oil will start to run out ever since M. King Hubbert came up with the idea of “peak oil” back in the 1950s. The American geologist, who worked for Shell, pointed out that we are destined to reach a moment when oil production stops rising and goes into terminal decline. With it, the era of cheap oil that fuelled the post-war economic boom would end. The idea still provokes great debate, and many forecasters are predicting that global production will peak by the end of this decade as supplies dwindle.

Now there is a different view. A small number of analysts forecast that oil production will start to fall by 2020 – not because we are running out, but because we just won’t need it. They argue that the world will wean itself off oil voluntarily, through major advances in vehicle technology. Peak oil will not be a supply-side phenomenon brought about by shrinking reserves, but by motorists buying electric cars and conventional cars with highly efficient engines. If they are right, this shift will start the long-term transition from oil to electricity as the main transport fuel, reduce economies’ vulnerability to spikes in the oil price, and cap greenhouse emissions from crude oil.

Oil hits 2012 low under $107 on euro zone turmoil LONDON (Reuters) - Oil prices slipped below $107 a barrel on Friday and hit a 2012 low as investors fought shy of riskier, growth-oriented assets on fears that Greece would leave the euro, and after a downgrade of 16 Spanish banks by Moody's added to the contagion gloom.

..."The driving factor is still what is going on in Europe with the downgrades of the Spanish banks and very negative sentiment towards risk investments," said Eugen Weinberg, an analyst at Commerzbank in Frankfurt. "It's not surprising to see further falls in Brent today."

Oil May Fall as Seaway Insufficient to Ease Glut, Survey Shows Oil may decline next week on concern that the reversal of the Seaway Pipeline will not be enough to alleviate a record supply glut in the central U.S., a Bloomberg survey showed.

Nineteen of 34 analysts, or 56 percent, forecast oil will drop through May 25. Nine respondents, or 26 percent, predicted prices will rise and six estimated they will be little changed. Last week, 48 percent of surveyed analysts expected a decrease.

Unlike the East, gas prices stay stubbornly high out West LOS ANGELES – Declining prices for crude oil have brought relief at the gas pump for much of the nation, but not for drivers on the West Coast, where retail gasoline prices have been rising this month.

"We are seeing a tale of two coasts," says Michael Green, spokesman for AAA, which monitors pump prices. "On the West Coast, gas prices are rising steadily, while on the East Coast they are steadily decreasing."

Oil markets vulnerable to more than 1 mil b/d loss of Iran's oil: IEA Oil market fundamentals could become much tighter in the second half of 2012 if EU and US sanctions keep more than 1 million b/d of Iranian oil exports off the market and non-OPEC output disruptions take a turn for the worse, the head of the International Energy Agency's Oil Industry and Markets Division said Friday.

Obama may tap Strategic Petroleum Reserve NEW YORK (CNNMoney) -- Despite the recent fall in oil prices, analysts say President Obama may tap the Strategic Petroleum Reserve as sanctions on Iran take hold.

While oil prices have fallen from over $110 a barrel to near $90 in recent weeks, tougher sanctions on Iran begin to take effect at the end of June.

That could mean up to 1 million barrels a day could soon be taken off the table, resulting in a possible spike in oil prices.

IMF tells Kuwait to cut spending or risk running out of oil money Kuwait faces the risk of running out of oil revenues by 2017 if it continues its spending policy, the IMF has warned.

The wake-up call from the fund comes as public finances deteriorate from rising public sector wages, pension costs and rapid population growth.

The Biggest Threat to High Oil Prices The biggest threat to oil prices isn’t excess supply, uneven demand or slowing global growth.

It’s the rise of the U.S. dollar – or more precisely, the fall of the euro.

UK gas at two-month low as Norway imports treble LONDON (Reuters) - British short-term gas prices fell to a two-month low on Friday after a high increase in imports via Norway's Langeled pipeline flooded the market with gas and balanced out supply losses resulting from maintenance work elsewhere.

Gas for within-day delivery fell nearly 3 pence, around five percent day on day, to 55.50 pence per therm as the market was oversupplied by more than 20 million cubic metres per day (mcm/d).

Excelerate Energy plans natural gas export vessel for Gulf Coast Excelerate Energy announced Tuesday that it will develop the nation’s first floating liquefaction facility at Port Lavaca on the Texas Gulf Coast, to export U.S. natural gas.

Enterprise And Enbridge Announce Completion Of Seaway Pipeline Reversal Houston, TX and Calgary, AB (Marketwire) - Enterprise Products Partners L.P. and Enbridge Inc. today announced that modifications to the Seaway crude oil pipeline allowing it to transport crude oil from Cushing, Oklahoma to the U.S. Gulf Coast have been completed. The pipeline is in the process of being commissioned, and the first flows of crude oil into the line are expected to begin this weekend. The reversal of the 500-mile, 30-inch diameter pipeline, which had been in northbound service since 1995, provides North American producers with the infrastructure needed to access more than 4 million barrels per day ("BPD") of Gulf Coast refinery demand.

Gazprom Is Still Calculating Discount for Bulgaria - Russian Media Bulgaria managed to negotiate special terms for the supply of Russian gas regardless of its abrupt withdrawal from the Burgas-Alexandroupolis oil pipeline and the Belene NPP energy projects, Russian media outlets note.

Gazprom Hopes to Build Second Baltic Sea Pipeline With the planned Nabucco natural gas pipeline in southern Europe hitting snag after snag, Russian natural gas giant Gazprom is considering the construction of a second Baltic Sea pipeline to go with the just-finished Nord Stream. With unconventional natural gas from the US flooding the market, however, the strategy is not without risk.

ANALYSIS: Russia sets European oil export, benchmark grand plan Paris (Platts)- Russia's investment in new oil transportation infrastructure is part of a grand plan that owes much more to long-term profit maximization than it does to short-term economics.

This is evident from state oil pipeline company Transneft investing billions of dollars in significantly more oil export capacity than it expects to see growth in crude oil output.

Bulgaria, Gazprom hope to ink deal to cut price of Russian gas Bulgaria and Russian gas giant Gazprom are preparing to sign an agreement to cut the price of Russian gas, with Sofia seeking a 11.1% discount, according to market sources Friday.

China's Ningbo Shuhua opens largest crude oil terminal in Asia: Sinopec Ningbo Shihua Crude Oil Terminal Co Ltd has opened a crude oil shipping terminal on Daxie Island in east China's Zhejiang province -- Asia's largest -- joint venture partner Sinopec said in a statement on its website Thursday.

China to exclude foreign firms in shale gas tender (Reuters) - China will exclude foreign firms from bidding in its second tender for shale gas blocks, despite a need for overseas technology to help exploit massive reserves of gas trapped within shale rock formations in the world's top energy user.

Mitt Romney vows immediate approval of Keystone XL on first day in White House WASHINGTON - Mitt Romney is vowing to approve TransCanada's Keystone XL pipeline on his first day on the job if elected U.S. president in November.

Enbridge Pipeline That Ruptured Will Be Enlarged To Carry More Oil, Company Says TRAVERSE CITY, Mich. (AP) — Enbridge Inc. will enlarge a pipeline that ruptured nearly two years ago in southwestern Michigan so it can carry more oil from deposits in western Canada and North Dakota, a company official said Thursday.

Shell's Majnoon deal highlights Iraq oil target verdict (Reuters) - Shell is pressing ahead with talks over final development of Iraq's Majnoon oilfield, a senior executive told Reuters, and a lower, more realistic oil production target is a core part of discussions.

Majnoon is one of four southern super giant fields that are vital to Iraq's ambition to at least double its oil output and put it firmly back among the world's top producers.

But crunch time is approaching.

Iranian protesters denounce Saudi-Bahrain union plan (Reuters) - Thousands of Iranians rallied on Friday against plans for union between Saudi Arabia and Bahrain, state television showed, and an influential cleric denounced the idea as an "ill-fated plot" that will never be tolerated by Muslims.

Tension between Iran and U.S.-allied Gulf Arab states has run high in recent months with Arab leaders accusing Tehran of fomenting Shi'ite Muslim unrest in Bahrain - a charge that Shi'ite Iran and the protesters deny.

Japan trade minister: considering options on Iran oil payments (Reuters) - Japan's Trade Minister Yukio Edano said on Friday the government is examining options for paying for oil imports from Iran after a U.S. court ordered a freezing of Iranian assets held by Japanese banks.

Energy-deficient India turns to UAE for oil supply Under pressure from the US to cut its oil imports from Iran, India has decided to set up a high-level joint task force on investment which will also look into securing more oil supplies from UAE that has assured it of "increased" energy exports.

India looking at Saudi, Iraq to diversify its oil sourcing WASHINGTON: India is looking at Saudi Arabia and Iraq to diversify its global oil purchase while making efforts to reduce its dependence on Iranian oil, a top Obama Administration official has told US lawmakers.

Assistant Secretary of State for South and Central Asia Robert Blake told lawmakers at a Congressional hearing on South Asia that India is working to cut down the import from Iran not because of the American influence but because of commercial considerations as well.

East Timor Ends First Decade Fighting Oil Curse The Southeast Asian nation of East Timor celebrates 10 years of independence tomorrow night facing a challenge that has eluded emerging economies across the world: How to stop oil wealth wrecking your economy.

After a decade of contract delays, deadlocked oilfield negotiations with Woodside Petroleum Ltd. and a political crisis that almost precipitated civil war, East Timor has moved from the poorest country in Asia, dependent entirely on international aid, to one with a $10 billion resources fund and almost entirely dependent on oil.

The U.S. Has A Lot Of Shale Oil, So What? Quite a few conservative commentators are making waves about a Government Accountability Office statement (PDF) which says that 1.5 trillion barrels of shale oil in Colorado, Utah, and Wyoming may be recoverable.

Their reactions are all along the same lines: this shale-oil reserve could “by itself supply domestic oil consumption for more than 200 years”, and “will Obama, in a possible second term, block the development of the resources that can assure America’s economic supremacy for generations?”

Typically simplistic. If only it were that easy.

Technology can unlock new fields, curb fears of peak oil Technology advancements in the energy sector can boost oil and gas production, improve safety and curb fears that fossil fuels are rapidly running out, a Chevron official said today.

During the opening session of a Houston energy conference this morning, Jay Pryor, Chevron’s vice president for business development, touted a number of technology advancements that have improved the efficiency and safety of fossil fuel production, including enhanced oil recovery, 3D seismic imaging, horizontal wells, and hydraulic fracturing.

“Because of technology, we are producing in places once just dreamed of,” Pryor said, at the 10th annual KPMG Global Energy Conference. “In lifting those reserves, we’ve raised doubts about the eminence of peak oil.”

Scraping the bottom of the barrel Several articles in the international media in recent months have claimed that worries about peak oil – the peak and decline in yearly world oil production – are unfounded because vast new reserves of unconventional oil are coming on stream. But a closer look at these new sources of oil casts doubt on this assertion.

Data from the US Energy Information Administration show that conventional crude oil production – oil from wells accessed using typical drilling techniques – has been essen- tially flat at around 74-million barrels per day (mbpd) since 2005. Looking at the history of con- ventional crude oil discoveries, this is not surprising – they peaked in the mid-1960s and have been on a declining trend ever since.

The Energy Revolution on Our Doorstep A major plank in my golden age scenario for the 2020’s is the collapse of the cost of energy. This won’t occur because of a single big discovery, but from a 1,000 small ones that aggregate together to create a leveraged effect. The upshot is that we may be free of OPEC in 3-5 years, and completely energy independent not long after that. The impact on financial markets and global standards of living will be huge.

Author’s no-growth prediction runs out of gas EDMONTOIN - Jeff Rubin says we’ve entered a new era. The world just doesn’t know it yet.

In his new book, The End of Growth, the former chief economist at CIBC World Markets says high energy prices are here to stay.

Not for a month, a quarter or a year, but forever. The result? Economic growth has hit a brick wall, and the good ol’ days will never return, he warns.

Legislation Is Proposed to Extend Helium Sales Deadline In 1996, Congress passed a law to privatize the Amarillo helium by requiring the federal government to sell nearly all of its reserves. But the law expires at the end of 2014, years before the sell-off will be complete. Last week a Senate committee heard testimony about the bipartisan Helium Stewardship Act, which would extend the time period for the sales. Walter Nelson, an official with Air Products and Chemicals, a Pennsylvania-based helium refiner, warned that without such a move, chaos would ensue, with significant disruptions to industries like semiconductors and fiber optics.

“Imagine the impact on global markets if 30 percent of the world’s oil reserves were off limits,” he testified.

Shell Kulluk Air Permit Contested By Environmental Groups ANCHORAGE, Alaska (AP) — Environmental and Alaska Native groups on Wednesday appealed an air permit granted by the Environmental Protection Agency to a Shell Oil drilling ship that could be used this summer in the Arctic Ocean off Alaska's northern shore.

The groups claim the Kulluk and support vessels will put harmful pollutants into the skies, adding problems to a region already beset by climate warming, and that the EPA granted the permit without consideration of all national environmental laws and regulations.

How much impact did the North Sea gas leak have on the environment? While the Elgin North Sea natural gas leak that was plugged on Wednesday was a massive financial blow for its operator Total, it appears the incident had little impact on the environment in terms of global warming and local marine life.

Vt. becomes 1st state to ban hydraulic fracturing MONTPELIER, Vt. — Vermont Gov. Peter Shumlin on Wednesday signed into law the nation's first ban on a hotly debated natural gas drilling technique that involves blasting chemical-laced water deep into the ground.

The Democrat, surrounded at a Statehouse ceremony by environmentalists and Twinfield Union School students who pushed for the ban, said the law may help Vermont set an example for other states. The ban may be largely symbolic, though, because there is believed to be little to no natural gas or oil beneath the surface in Vermont.

Siena Poll: New Yorkers are evenly split on fracking issue LOUDONVILLE - A new poll shows that New Yorkers are evenly split on the fracking issue. That's according to the latest Siena Poll.

North Korea Seen Restarting Work on Nuclear Reactor The reactor, for possible completion by 2014-2015, would be able to supply needed electricity as well as fissile material for a nuclear weapon, the report says. It quoted a former deputy director general of the International Atomic Energy Agency, Olli Heinonen, as saying that once the reactor is operational, it would be capable of producing enough plutonium to add “a little more than one bomb per year” to North Korea’s nuclear weapons stockpile.

Global generation capacity for nuclear power has grown to over 346 gigawatts since 1955 Nuclear generating capacity additions began in the 1950s and now top 346 gigawatts worldwide (click on animation above to assess trends). The first nuclear reactor to produce electricity was a very small experimental reactor in the United States in 1951. Currently, 30 countries have nuclear power programs.

From the early 1970s to the early 1990s, nuclear power steadily grew around the world with brief periods of relatively slow growth following the accidents at Three Mile Island (North America, 1979) and Chernobyl (Former Soviet Union, 1986), as the nuclear industry absorbed the lessons learned from both accidents. Since then, nuclear power capacity has remained relatively stable throughout most of the world, with the exception of rapidly developing countries in Asia. An upcoming Today in Energy article will address post-Fukushima impacts on Japan's nuclear capacity.

Denmark aims low with green energy policy SAMSO, Denmark (Reuters) - Over a beer or two, Danes like to tell a story that goes like this: One night the energy ministers of the countries around the North Sea got together to divide up its oil and gas wealth. The Danish minister got very drunk, but the Norwegian managed to stay sober. As a result, Norway carved out a jagged shape that included Ekofisk, which has proved to be a major field, and Denmark was left with the dregs.

Regarded as a model of how to spend oil and gas wealth wisely, Norway has stashed away surplus revenues from exports while hydropower caters for the bulk of its domestic electricity needs.

But Denmark has also found its own path to energy pragmatism, supplementing its relatively few oil rigs with wind turbines and a deep commitment to energy saving.

Is There a Clean Energy Standard in Our Future? Americans want it, but how much will it cost?

Just because Congress is unlikely to pass a carbon tax or a cap-and-trade bill anytime soon does not mean the United States can't work on lowering its greenhouse gas emissions. It turns out there's more than one way for America to skin that carbon cat.

Ford C-Max hybrid to start at $25,995 The C-Max is a five-passenger crossover that looks like a small minivan but with conventional doors.

Here are the top 10 'bikeable' cities. Did yours make the list? A score of 90 to 100 means the city is a "Biker's Paradise"; scoring 70 to 89 means the area is "Very Bikeable," while 50 to 69 means the city is merely "Bikeable." Any lower than that, and the city is deemed only "Somewhat Bikeable." A trio of public health professors at the University of British Columbia helped develop Bike Score.

Healthy food no more costly than junk food, government finds Contrary to popular belief, many healthy foods are no more expensive than junk food, according to a large new government analysis.

In fact, carrots, onions, pinto beans, lettuce, mashed potatoes, bananas and orange juice are all less expensive per portion than soft drinks, ice cream, chocolate candy, French fries, sweet rolls and deep-fat fried chicken patties, the report says.

Will 3D printers make food sustainable? Before the end of the year, if Professor Mark Post of Maastricht University gets his way, the world's first test-tube burger will be flame-grilled by Heston Blumenthal at The Fat Duck in Bray and served to a celebrity guest. Meals at this restaurant don't come cheap, but this one will be the climax of a €250,000 research project – and a milestone in Post's quest to find new ways of feeding the world, without destroying the planet.

His petri-dish patty will be made from a mixture of fat and cow muscle grown from stem cells in a culture of foetal calf serum (that's blood plasma without the clotting agents) – a technology trialled in February. It may sound less appetising than a Big Mac – but it could bring huge environmental benefits. Producing beef this way results in a 96% reduction in greenhouse gas emissions compared to rearing animals, and uses 45% of the energy, 1% of the land and 4% of the water associated with conventional beef production.

U.S. Solar Tariffs on Chinese Cells May Boost Prices The U.S. yesterday imposed tariffs of as much as 250 percent on Chinese-made solar cells to aid domestic manufacturers beset by foreign competition, though critics said the decision may end up raising prices and hurting the U.S. renewable energy industry.

The U.S. Commerce Department ruled that Chinese manufacturers sold cells in the U.S. at prices below the cost of production and announced preliminary antidumping duties ranging from 31 percent to 250 percent, depending on the manufacturer. China criticized the action, saying the U.S. is hurting itself and cooperation between the world’s two largest economies.

Solar sector looks to Saudi plan Huge investments in solar energy by emerging nations such as Saudi Arabia could spell the end of a crisis of overcapacity in the panel-making industry, according to one of the biggest producers of solar panels.

Hawaii first state to ban plastic bags at checkout By now, it’s hardly news when a city bans plastic bags at checkout counters -- but an entire state? That’s happened in Hawaii, where Honolulu County has joined the state’s three other counties to give Hawaii a first-in-the-nation title.

"Passing the bans did take an effort -- change always does -- but people seemed to understand the need for such an effort," Robert Harris, director of the Sierra Club's Hawaii chapter, told msnbc.com of the two-year campaign across the islands.

Brazil’s Leader Faces Defining Decision on Bill Relaxing Protection of Forests RIO DE JANEIRO — President Dilma Rousseff is facing one of the defining moments of her presidency as pressure builds on her to veto a bill that would open vast protected areas of forests to ranching and farming, potentially reversing Brazil’s major gains in slowing Amazon deforestation.

District Energy Systems can reduce carbon, save money - but only if well-regulated Centralized heating systems known as District Energy (DE) Systems generate heat at a central plant and then pipe it underground, providing heat and hot water for a cluster of buildings or even an entire community. DE has exceptional potential to reduce greenhouse gas emissions and contribute to a lower carbon economy.

But unless they’re properly designed and regulated, DE systems risk high costs and overestimated greenhouse gas reductions.

Billboard Wars, Chapter 2 (or Is It 3?) Pfizer is not the only corporation Forecast the Facts had hoped to plaster across the freeway. It also planned to call out Microsoft and Comcast for donations to Heartland.

“Our goal was to highlight Pfizer and other corporations’ support of the Heartland Institute,” Mr. Johnson said. “The question to ask is whether these corporations are based on a foundation of science or on a foundation of profit.”

Canada pledges oil and gas pollution rules by 2013 at climate conference Facing questions about its upcoming withdrawal from the Kyoto Protocol and "gaps" in its existing policies, Canada told international climate change talks in Germany Thursday that it planned to crack down on oil and gas pollution through draft regulations by next year.

Critical time as Qatar hosts talks The naming of Qatar's former oil minister to the presidency of this year's climate change talks reflects the conflicting priorities of Gulf states.

Parts of Japan see record-high CO2 levels The average monthly concentration of carbon dioxide has topped 400 parts per million in Ofunato, Iwate Prefecture, the first time this level has been reached in Japan, raising alarm about greenhouse gases that can cause global warming.

Temperatures rise across the ditch The last 60 years have been the hottest in Australasia for a millennium, most likely thanks to human-caused climate change, a new report says.

Scientists from the University of Melbourne used 27 natural climate records, including tree rings, corals and ice cores to create the first large-scale temperature reconstruction for the region over the past 1000 years.

Summer forecast sparks concern over fires, water shortages As the nation swelters through its warmest year on record, a new forecast for a broiling summer is raising concern about wildfires and water shortages, especially across parts of the western and southern USA.

UK climate policy can curb energy price shocks-report LONDON (Reuters) - Britain's climate policies can help shield the economy from oil and gas price shocks triggered by external factors such as the Arab Spring, an analysis commissioned by the government showed on Friday.

Q. and A.: How to Save Bangladesh? Bangladesh is a prime example of a vulnerable developing nation that faces formidable challenges in all these areas, and it will be directly affected by the decisions that are made — or not made — at the conference. Firm commitments have often been elusive on the international level.

We asked Thomas Rath, the country program manager for the United Nations International Fund for Agricultural Development project in Bangladesh, about the development obstacles the country faces, some of which are linked to climate change and environmental degradation.

IRVING, Texas--(BUSINESS WIRE)--Media Advisory: ExxonMobil will release its fourth quarter and full year 2011 earnings on Tuesday, January 31, 2012. A news release will be issued over Business Wire.

--(BUSINESS WIRE)--ExxonMobil is holding its annual meeting of shareholders on Wednesday, May 30, 2012.

IRVING, Texas--(BUSINESS WIRE)--EXXON MOBIL CORPORATION DECLARES FIRST QUARTER DIVIDEND.

U.S. energy independence is no longer just a pipe dream Every president since Richard Nixon has called for the U.S. to wean itself from needing oil from unstable or unsavory countries. The nation's new-found energy riches are likely to bring that ambition closer to reality in the next two decades, according to many forecasters.

It's no pipe dream. The U.S. is already the world's fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is "the new Middle East," Citigroup analysts declare in a recent report.

The U.S. Energy Information Agency says U.S. oil imports will drop 20% by 2025. Oil giant BP projects the U.S. will get 94% of its energy domestically by 2030, up from 77% now, as oil imports fall by half. Energy billionaire T. Boone Pickens, a major investor in oil and natural-gas companies, said the U.S. can at least end oil imports from Organization of Petroleum Exporting Countries, about half its total, through new drilling and by shifting diesel-swilling trucks to natural gas. Any other oil needs should be from politically stable allies such as Canada, Pickens said.

Most enticing, a team of analysts and economists at Citigroup argues that the U.S., or at least North America, can achieve energy independence by 2020, as more domestic production and doubling down on conservation produce a virtuous cycle. The U.S. can make itself a net exporter of crude oil, refined products and natural gas — says Citigroup energy strategist Seth Kleinman.

Oil Drops to Six-Month Low on Rising Stockpiles, Greek Crisis Oil dropped to the lowest price in more than six months in New York after U.S. crude stockpiles increased and talks to form a coalition government in Greece collapsed, raising concern the region’s debt crisis will worsen.

Budget-minded consumers skimping on summer travel Gas was averaging around $3.85 per gallon when AAA spoke with 315 would-be travelers from April 20 to 24. The survey showed that those making under $50,000 a year will make up about a quarter of all Memorial Day travelers, down from nearly a third a year ago. Higher gas prices eat up a larger share of lower-income families' household budgets.

AAA says the 66 cent increase in the average gas price from January through early April made many people skittish about taking long road trips. The average trip will be 642 miles this Memorial Day, compared with 792 miles. Half of those surveyed said they'll travel less than 400 miles.

Petrobras Quarterly Profit Beats Estimates on Oil Export Growth Petroleo Brasileiro SA, the world’s biggest oil producer in deep waters, said first-quarter profit topped analysts’ expectations because of increased revenue from crude exports and higher fuel prices.

North Dakota passes Alaska in oil production BISMARCK, N.D. (AP) — North Dakota has passed Alaska to become the second-leading oil-producing state in the nation, trailing only Texas, state officials said Tuesday.

North Dakota oil drillers pumped 17.8 million barrels in March, with a daily average of 575,490 barrels, Assistant State Mineral Resources Director Bruce Hicks. That compares to 17.5 million barrels in Alaska, though still far behind Texas.

North Sea oil output at 2012 low, supporting Brent LONDON (Reuters) - Crude oil output from the North Sea will fall by 2.8 percent in June to its lowest this year due to oilfield glitches and natural declines, helping support the price of global benchmark Brent crude.

Supply from 12 North Sea crudes will average 2.11 million barrels per day (bpd), compared with 2.17 million bpd in May, Reuters calculations based on shipping schedules showed on Wednesday.

Gas prices fall as main Norway supply restarts (Reuters) - British prompt gas prices fell on Wednesday morning ahead of the scheduled return from maintenance of Norway's Ormen Lange gas processing plant, which is expected to boost supplies.

Tom Murphy: Time to Be Honest With Ourselves About Our Looming Energy Risks What we are really missing is the liquid fuel. It is very difficult to transition from solar, nuclear, whatever you want into the liquid fuels that allow us to move ourselves around, it is very important in agriculture. And it is, I think...that is where the pinch point will come. There are certainly sources that can be labeled as abundant. The gulf is really one of practicality more than one of the sheer energy scale. That is a little bit harder to quantify. So you can quantify the abundance and how much you might get out of a certain source. But it is very hard to quantify things like public acceptance or how difficult it will be to pull off things like intermittency, how to deal with the storage, practical storage solutions. All of these are very tricky.

And one perspective is that we have known since 1970 roughly that fossil fuel peak was coming at some point. We knew that we needed alternatives in the 70s. We had lots of discussion of alternative energies. Forty years later we really aren’t that much further along. We sort of don’t have any new players, and it feels to me that if the liquid fuels decline in the next few decades, which I think is likely, we have already got the players on the stage right now.

Acknowledging the Arrival of Peak Government The twin peaks of oil and government are causally linked: central government's great era of expansion has been fueled by abundant, cheap liquid fuels. As economies powered by abundant cheap energy expanded, so did tax revenues.

Peeking at Peak Oil: book review The leader of the world's foremost Peak Oil research group is Kjell Aleklett, Professor of Physics at the University of Uppsala in Sweden. He has just published a book on Peak Oil that summarises a decade of scientific research.

Kjell's book is truly remarkable but not only as an unparalleled analysis of the reality and implications of Peak Oil. The book is also a unique example of how art can be used to assist the understanding of science. For these reasons I believe Kjell's book will soon be recognised both as the definitive work on Peak Oil and also as a unique scientific text. I simply do not see how it can be surpassed – unless there is another person who is willing to devote a decade of their life to building up a research enterprise that has now published over 30 peer-reviewed scientific papers on Peak Oil and related issues. Of course, there is no other person than Kjell.

How high priced oil is changing our lives: Fewer cars and commuters, but also lower emissions TORONTO Only rich people will be able to afford cars. Everyone else will be taking public transit.

Commuters will move into Toronto and other urban centres, leaving the suburbs to revert to their former status as farmland.

The only provinces creating jobs will be those with oil. The poorest regions may resort to job-sharing.

Such is the controversial/bleak/contrarian view in Jeff Rubin’s latest book The End of Growth, published by Random House Canada.

Book Review: The End of Growth What would happen if world economic growth, on a real, aggregate and average basis, stopped? Would houses be built? Would cars be purchased? Would people still work gainfully and consume? Richard Heinberg’s The End of Growth argues we’re nearing a watershed moment—“transitioning us from decades of economic growth to decades of economic contraction.”

UAE to merge with 'Gas OPEC' The UAE has won cabinet approval to join the Gas Exporting Countries Forum (GECF), an intergovernmental organization of the world's leading gas exporters, said a report.

Moody’s maintains negative outlook on Chesapeake Energy Moody’s is maintaining its negative outlook on Chesapeake Energy, despite an announcement late Friday of a $3 billion unsecured loan that the company will use to pay down its $4 billion revolving credit facility.

Chesapeake Energy Said to Increase Term Loan to $4 Billion Chesapeake Energy Corp. (CHK), the second- largest U.S. gas producer, increased the size of a term loan it’s seeking to pay off a revolving credit line to $4 billion from $3 billion, according to data compiled by Bloomberg.

“That level of demand is an encouraging sign of the market’s demand for Chesapeake debt at these price levels,” Brian Gibbons, an analyst at CreditSights Inc. in New York, wrote in an e-mail.

Chesapeake's Rapidly Declining Stock Is Putting Employees' Retirement Savings At Risk NEW YORK (Reuters) - The woes of Chesapeake Energy Corp are hitting shareholders hard, including its employees.

Thousands of Chesapeake workers have retirement portfolios that are heavily invested in Chesapeake stock, which has declined sharply following revelations about Chief Executive Aubrey K. McClendon's business dealings.

But while retail and institutional investors have sold the stock, employees don't always have that option.

China Doubling Gas Use Makes Ex-Clothing Retailer Target China Gas Holdings Ltd., the utility that began life as an online retailer, has become the industry’s hottest property as China plans to double use of natural gas and replace coal in the biggest-polluting nation.

Naftogaz Ukrainy forecasts average annual imported Russian gas price at $440 for 2012 Each month, Ukraine shells out around $1 billion for imported Russian gas, which greatly surpasses the price of the acquired modern SEFDR, with the help of which Naftogaz counts on significantly expanding Ukrainian gas production, Bakulin said.

"Ukraine pays around $1 billion each month for imported natural gas. For the year, that ends up being an amount equal to the cost of 28 drilling rigs like Petro Hodovanets. Therefore, at the current natural gas price of $425, the first billion cubic meters produced with the help of this rig will compensate for its cost," he said.

Genel Energy takes chance with another stake in Kurdistan Genel Energy, the company headed by the former BP chief executive Tony Hayward, is expanding its operations in Kurdistan.

The move comes despite a renewed bar on exports from the autonomous region and an unresolved payments dispute between Baghdad and Erbil.

Korea Gas, Shell Start Discussions on Canada LNG Project Royal Dutch Shell Plc and three Asian partners will jointly develop a liquefied natural gas export project in Canada’s British Columbia province and are in talks with local communities to win their support.

Trafigura, Mercuria Said to Rent Vopak Singapore Fuel Storage Trafigura Beheer BV, the world’s third-biggest independent oil trader, and Mercuria Energy Group Ltd. rented fuel-oil storage in Singapore from Royal Vopak NV after Westport Petroleum Inc. ended its contract for the space, according to four people with knowledge of the deals.

Keystone isn't the only pipeline NEW YORK (CNNMoney) -- At least a dozen new oil pipeline projects are slated to move forward in the United States over the next few years, bringing controversial sources of new crude to market despite the holdup of a portion of the Keystone pipeline expansion.

Some of the projects reverse the flow of existing pipelines.

Angola's crude exports set to fall in July LONDON (Reuters) - Angola's crude oil exports are expected to fall in July from June, marking a drop in volume for the third consecutive month, a provisional loading schedule showed on Wednesday.

Traders attributed the fall in overall volume, which they said was significant, to the reduced exports of Angola's key Girassol crude due to maintenance at the oil field.

Shell seeks to cut targets in Iraq Royal Dutch Shell is in talks with Iraq to cut its output target for the giant Majnoon oilfield, a move that could prompt other companies to seek similar revisions.

The European oil major won the rights to develop the giant oilfield in 2009, and is contractually obliged to increase production to 1.8 million barrels per day (bpd). But in a meeting held with government officials last month, the company proposed to cut the target to 1 million bpd, reduce spending, and extend the period under which peak production will be sustained, documents seen by Reuters show.

Experts differ in assessing Iran's oil and gas opportunities in Caspian Sea Azerbaijan, Baku / Trend / Iran has stated about launching the oil and gas extraction operations in Iran's sector of the Caspian Sea.

Iran's oil minister Rostam Qasemi said earlier that the first "oil" torch will be sparked on the "Amir Kabir" platform (Alborz).

Iran seen losing 500,000 barrels of oil shipments daily Iran's oil exports have the potential to fall another 300,000 to 500,000 barrels a day or more when the European Union's embargo takes effect in July, Reuters reported referring to Barclays Plc.

The decline will extend existing losses of 500,000 barrels a day, Barclays analysts led by Helima Croft in London said in an e-mailed report yesterday.

Iranians feel the pain of sanctions: 'Everything has doubled in price' TEHRAN – The economy here is in shambles, according to Iranians, whether the government will admit it or not.

The United States, the European Union and the U.N. have imposed tough economic sanctions against Iran –- blocking access to the international banking system and hurting sales of Iranian crude oil -– as a way to persuade Tehran to abandon its nuclear program.

Will have more talks with India on Iran oil import: US Tweet WASHINGTON: The US has said that it will have more consultations with India on New Delhi reducing dependence on Iranian crude.

"There is more progress to be made and that's what Carlos is talking about and we will have more on his consultations after they are complete," US State Department spokesperson Victoria Nuland said on Tuesday.

Libya currently producing nearly 1.5 mil b/d crude: NTC official Dubai (Platts) - Libya is currently pumping nearly 1.5 million b/d of crude and expects to achieve "normal" pre-war production levels of 1.6 million b/d by mid-2012, Abdulbaset Abadi, a member of the oil committee at the National Transitional Council, said Wednesday.

EU carries out strikes on Somali pirates BRUSSELS (AP) – The European Union naval force patrolling the Indian Ocean on Tuesday carried out its first air strikes against pirate targets on shore, with a pirate reporting that the raid destroyed speed boats, fuel depots and an arms store.

Do we know enough to ensure safe Arctic drilling? FOR the oil and gas industry, the Arctic Ocean is the final frontier. Beneath the ocean floor lies an estimated 90 billion barrels of recoverable oil - about 13 per cent of the global total. As the sea ice retreats and traditional sources of hydrocarbons dwindle, the pressure to drill is becoming irresistible.

It now seems inevitable that this harsh environment will be opened up to oil and gas production, which poses a big question: how much scientific research is "enough" to ensure safe drilling in the Arctic Ocean?

Total stops gas leak at N.Sea Elgin platform (Reuters) - Total has succeeded in plugging a well at its North Sea Elgin platform that has been leaking gas for more than seven weeks, the French oil group said on Wednesday.

Ukraine sees 2017 for commercial shale gas output (Reuters) - Royal Dutch Shell and Chevron Corp, Ukraine's partners for exploring and developing shale gas, will start commercial gas production in 2017, a government minister said on Wednesday.

"Drilling is likely to start next year," Environment and Natural Resources Minister Eduard Stavitsky told a news conference of plans which focus on two potentially large shale gas fields.

Taxpayers Pay as Fracking Trucks Overwhelm Rural Cow Paths A surge in hydraulic fracturing to get gas and oil trapped in rock means drillers need to haul hundreds of truckloads of sand, water and equipment for a single well. Drilling that added jobs and tax revenue for many states also has increased traffic on roads too flimsy to handle the 80,000-pound (36,300 kilogram) trucks that serve well sites.

The resulting road damage will cost tens of millions of dollars to fix and is catching officials from Pennsylvania to Texas off guard. Measures to ensure that roads are repaired don’t capture the full cost of damage, potentially leaving taxpayers with the bill, according to Lynne Irwin, director of Cornell University’s local roads program in Ithaca, New York.

Some attack plans bolstered, others eased at nukes The U.S. government has adopted the first set of comprehensive changes in the emergency planning program for communities near nuclear power plants since its creation after the Three Mile Island accident in 1979.

Sustainable energy for all focus of summit Nearly two billion people, about one-third of the world’s population, don't have access to energy, according to the United Nations.

So the leading goal for the upcoming 2012 United Nations Earth Summit is “energy for all” by the year 2030, mostly from renewable and sustainable resources.

Britain is rising to the challenge of greening our economy It's clear that with unprecedented pressure on our natural resources and our climate, the world economy needs to "green up". I want UK businesses to be in the vanguard of that move. On Wednesday, I'll take my seat alongside British business leaders at the Aldersgate Rio +20 Business Summit where we'll debate the opportunities – and the challenges – of transforming our whole economy to one geared towards long-term green growth.

Can we please just declare the end of 'peak oil' and start worrying about something important? Apparently something terrible happens when we get to peak oil. I've never really quite understood the argument myself, but when we've used half of all the oil then civilisation collapses or something. I'm not sure why this should happen: we don't start starving when there's only half a loaf of bread left. But I am assured that something awful does happen.

Small Wind Farms to Grow as U.S. Tax Incentives Expand Installations of wind farms with less than 20 megawatts of capacity may rise to a record this year if lawmakers expand a federal tax credit.

At least 44 wind farms were built last year to serve individual U.S. communities, often with financial support from local residents. They made up 6.7 percent of the total capacity installed, up from 5.6 percent in 2010 and the most to date, according to data compiled by the American Wind Energy Association.

Surprise! SUVs are more popular than ever NEW YORK (CNNMoney) -- If you thought the "SUV craze" was over, you're wrong. Very wrong. Market share for SUVs in recent months is the largest it has ever been.

During the height of the so-called "SUV craze" in the late 1990s and early 2000s, about one in five vehicles sold in America was an SUV. Today, in an era of near $4 gasoline and heightened environmental awareness, nearly one in three vehicles sold is an SUV.

Ferrari goes green The Italian firm, one of the most elite names in motoring, indicated that one of its glitziest products, the Enzo, will be released in a hybrid version.

Economic growth sows unhappiness in China: study "There are many who believe that well-being is increased by economic growth, and that the faster the growth, the happier people are. There could hardly be a better country than China to test these expectations," said lead author Richard Easterlin, professor of economics at the University of Southern California.

"But there is no evidence of a marked increase in life satisfaction in China of the magnitude that might have been expected due to the enormous multiplication in per capita consumption," said Easterlin, who is known for his work in the 1970s on how happiness is often not linked to wealth, coined the Easterlin Paradox.

"Indeed people are slightly less happy overall, and China has gone from being one of the most egalitarian countries in the world in terms of life satisfaction to one of the least."

Grads, pursue a realistic dream Finding cheap housing is the best thing you can do to improve your balance sheet — freeing up far more cash than cutting out those lattes. The trick for young grads is to keep that same mindset through life, as the huge house that will eat up a third of your income starts beckoning. Rethink what's sold as the American Dream— ownership of a house you have to stretch to afford — and you might discover the real American Dream. That is, the freedom to pursue happiness.

Stocks-to-Use Ratio Updates for Corn, Wheat, Rice, Soybeans, Cotton and Sugar Twice a year, I try to update my ongoing stocks-to-use ratio charts using the latest available data on U.S. and global crop supplies. The stocks-to-use ratio reflects the excess of supply against demand. It is calculated by dividing the ending stocks of a commodity by the total demand of that commodity and is one of the most useful statistics that we have for measuring supply and demand of food commodities. Of course, these ratios are only as good as the data that goes into the calculations, but in our electronic information age these numbers are hopefully improving all of the time.

Q. and A.: The Most Endangered Rivers Q. Of these 10 rivers, there seem to be some patterns. Several are threatened by the same types of activities: energy development or dam- and reservoir-building.

A. There’s a threat from natural gas development and fracking in the Grand River in Ohio and the Hoback in Wyoming. There’s a threat to water quality as chemicals are injected into groundwater and the disposal of the fluids is not regulated, and also a threat to water quantity because massive amounts of water are used.

Your Heart on Air Pollution: An Olympic Case Study Although the period of blue skies in Beijing may have been fleeting, researchers from the University of Southern California (USC) and colleagues have found that even such a small window of cleaner air may have proved useful for residents' cardiovascular health. That's according to a new study published yesterday in the Journal of the American Medical Association.

Dam Project Threatens a Way of Life in Peru BOCA SANIBENI, Peru — Along the murky waters of the Ene River, in a remote jungle valley on the verdant eastern slopes of the Andes, the rhythmic humming of an outboard motor draws the stares of curious Ashaninka children.

With encroachment from settlers and speculators, and after a devastating war against Shining Path rebels a decade ago, the indigenous Ashaninkas’ hold is precarious. And they are now facing a new peril, the proposed 2,200-megawatt Pakitzapango hydroelectric dam, which would flood much of the Ene River valley.

Pondering That Green Label Recently I stopped at an upmarket cafeteria near Rockefeller Center in Manhattan where plaques and posters proclaimed that it had been certified by the Green Restaurant Association, a nonprofit group that is endorsed by the Environmental Defense Fund, the National Resources Defense Council and the New York State Restaurant Association. After buying a sandwich, I asked for tap water. They informed me that the cafe only offered bottled water.

How can a restaurant with a green rating not offer tap water?! I was floored.

Only biofuels will cut plane emissions We need something that can deliver emission reductions from existing fleets of planes – and the solution already exists.

UK climate experiment cancelled on patent concern LONDON (Reuters) - British scientists have abandoned an experiment to test the possibility of spraying particles into the upper atmosphere to stem global warming, largely due to concerns over a patent for some of the technology, the project's leader said.

UN to Help Give World’s Poor Fairer Share of Carbon Credits Efforts by the United Nations to ease rules for carbon-cutting projects may encourage investments in small-scale projects in solar water heaters and efficient cookstoves in Africa and Asia.

The UN Clean Development Mechanism’s Executive Board, regulator of the world’s second-biggest carbon market by traded volume, agreed last week to consider ways to quicken the approval procedure for some emission-reduction activities. The new process would help ease difficulties facing projects that produce fewer emission reductions than others, including those that create usable fuel from animal dung and renewable energy initiatives small enough to power a light-bulb.

Bangladesh seeks $10 billion grant to tackle effects of climate change Bangladesh asks donors and development partners for a $10 billion grant as financial assisstance to tackle the adverse effects of climate change and to protect the country's existing infrastructure.

Hawaii’s Beaches Are in Retreat, and Its Way of Life May Follow Little by little, Hawaii’s iconic beaches are disappearing.

Most beaches on the state’s three largest islands are eroding, and the erosion is likely to accelerate as sea levels rise, the United States Geological Survey is reporting.

'Nobody is exempt from climate responsibility' (interview with Christiana Figueres) To keep below this 2 °C target, the science says we have to peak our greenhouse gas emissions before 2020. But we won't have an agreement until 2015, or global binding targets until 2020. Doesn't that make keeping below the 2 °C target impossible?

That very much depends on what effort is made now by governments. They must move forward with their negotiations for legal agreement by 2015. But they mustn't wait until 2015 to start their mitigation efforts, but rather accelerate mitigation efforts right now. They must also adopt the policies that give the right signals and incentives for the private sector to come on board.

Peak oil debate is over, say experts THE debate about peak oil is over and the world has used just a fraction of the petroleum it will be possible to extract, an expert believes.

Speaking at the Australian Petroleum Production and Exploration Association (APPEA) 2012 conference in Adelaide, oil major Total's chief executive Christophe de Margerie said new sources of petroleum, such as tight gas and shale oil, meant that the world had ample supplies of petroleum.

Mr de Margerie said while there were economic and environmental issues which would affect how quickly resources were exploited, there was "definitely not a concern about reserves''.

Oil prices could double by 2022, IMF warned The International Monetary Fund (IMF) has been warned by its internal research team that there could be a permanent doubling of oil prices in the coming decade with profound implications for global trade.

"This is uncharted territory for the world economy, which has never experienced such prices for more than a few months," the report warns. Report is here (PDF)

The difficult future facing black gold swissinfo.ch: What is likely to happen after “peak oil”?

D.G.: There will be more pressure on the environment. Because conventional oil has already reached its peak, there has been more investment in non-conventional oil over the past few years, but oil sands in Canada, deep sea oil in the Gulf of Mexico and shale oil from the United States cause a lot of pollution. Canada has even withdrawn from the Kyoto climate protocol in order to avoid millions of dollars’ worth of fines because of its oil sands.

Then you have the problem of wars breaking out over resources. For me, the 2003 Iraq war, which killed more than 100,000 people, was quite clearly an oil raid, just like the Libyan war in 2011, with more than 30,000 dead. And Sudan and the recently independent South Sudan are now fighting over oil fields. People are being killed for oil today. That’s a cause for concern.

Peak Oil: The Sun Also Rises While the net exports concept is a great pedagogical tool, I worry that it may distract us from the ways that even subsidized demand for oil in oil exporting countries responds to changes in the oil price. For instance, Saudi Arabian consumers may not feel the impact of changes in the world price of oil, but their government does.

Carbon, Low Carbon, And No Cash The IEA doesnt have time for stuff like Peak Oil anymore: the global warming crisis is so serious we will have to give up oil an awful lot sooner than it runs out all on its own - which was one good bit of news. In the meantime however, Jones urged the energy corporations of the IEA countries to increase and accelerate and intensify the production of shale oil, deep offshore oil, heavy oil, Arctic oil, gas-to-oil conversion, coal-to-oil conversion, biomass-to-oil conversion, algae-based oil, biofuels, and what have you, all of them clean of course. Breakthroughs could be coming, the IEA says, on top of those which already came in the shape of shale gas and tarsand oil, the shale gas being possible to convert to oil, and the tarsand oil being possible to use as-is. Cars will of course become much more fuel efficient, due to the global warming crisis, and it goes without saying that electric cars are coming, and nuclear power to charge them up is fine as long as its nicely managed. As Jones added, China and India were aware of the oil problem and had told him they were doing serious things to cut the growth of their oil habit. It was sure.

200 Year Supply Of Oil In Green River Formation “The Green River Formation—an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming—contains the world’s largest deposits of oil shale. USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions. The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.”

Oil Falls to 2012 Low on Greek Debt, Saudi Call for Drop Oil fell below $94 a barrel in New York for the first time since December as Europe’s debt crisis worsened and Saudi Arabia’s energy minister said prices should decline further.

West Texas Intermediate slid as much as 2.6 percent to the lowest level this year. Brent crude, trading at about $110 a barrel today, should drop to $100 as supply outweighs demand, Saudi Oil Minister Ali al-Naimi said yesterday in Adelaide, Australia. Futures also slipped after Greece failed to agree on a unity government and European Union officials considered the nation’s possible exit from the euro. Hedge funds cut bullish bets on oil by the most in three years, data showed last week.

Naimi Says Brent Oil Should Drop to $100 as Supply Tops Demand Crude prices should fall because global supply is outweighing demand, according to Saudi Arabia’s oil minister, Ali al-Naimi.

“We want a lower price than where it is now,” al-Naimi said in Adelaide today. “We need to get the price to a level of around $100” a barrel for London’s Brent crude, he said. Saudi Arabia is the world’s biggest oil exporter.

National Hurricane Center Tracking Two Pre-Season Storms The National Hurricane Center is tracking two pre-season storms in the Atlantic and Pacific oceans today.

The stronger of the two is located in the Pacific about 550 miles (885 kilometers) south-southwest of Acapulco, Mexico and has a 50 percent chance of becoming a tropical depression in the next day or two, according to a bulletin from the center in Miami.

UK gas prices sink on poor demand, ample supply LONDON (Reuters) - British prompt gas prices sank on Monday due to ample supply and below-average demand but upcoming maintenance outages and cooling temperatures may drive gains later in the week.

Why China's Slowdown Could Be Good for US, Europe China’s economy may be on track to grow at its slowest pace in a decade, but there’s a silver lining to this: lower commodity prices may actually benefit the U.S. and Europe, just when they most need it.

Palm Oil Plunges Most in 14 Months on Europe Debt Crisis Palm oil slumped the most in more than 14 months on concerns that an escalating debt crisis in Europe and a deepening economic slowdown in China may curb demand for commodities.

Lower jeepney fares starting Tuesday MANILA, Philippines - Commuters will once again pay P8 minimum fare for public utility jeepneys starting tomorrow (May 15). The Land Transportation Franchising and Regulatory Board (LTFRB) on Monday issued a recalll order on the P0.50 provisional fare increase being implemented since March.

The LTFRB's order came on the heels of a major price rollback implemented by oil companies on Monday. The companies cut prices by P1.70/ liter for gasoline and P1.50/liter for diesel.

In Bahrain, the spark behind Pearl Revolution still glows While other Arab nations are engaging in elections and self-rule after the removal of dictators, Bahrain remains solidly in the control of King Hamad bin Isa Al Khalifa and his family. After negotiations with protesters broke down, Khalifa called in the troops from the Gulf Cooperation Council, a union of Gulf states dominated by Saudi Arabia, and its troops forced demonstrators from the streets.

The Bahrain Center for Human Rights says the crackdown left 73 people dead. Human Rights Watch reported serious abuses by security forces, saying five people who were detained died under torture.

UK warns of more EU Iran sanctions if no change BRUSSELS (Reuters) - The European Union will impose tougher sanctions on Iran if it fails to take concrete steps to allay international concerns over its nuclear program, British Foreign Secretary William Hague said on Monday.

Six world powers, including Britain, are due to meet Iranian officials for another round of negotiations over the nuclear issue in Baghdad on May 23.

Turkey cuts Iranian oil imports in April vs March Turkey's cut its crude oil imports from Iran steeply in April from unusually high levels in March but its purchases were still close to last year's average, meaning Ankara has yet to slash buying to the extent sought by Washington, data from shipping sources showed.

Turkey said on March 30 that it would cut imports of oil from Iran by 20 percent from last year's quantities, ceding to US pressure to reduce purchases.

Iran Company to Renovate Syrian Hydropower Plants, Press TV Says Safa Nicu Sepahan Co., a privately owned Iranian company, reached an agreement with Syria’s government to renovate two hydroelectric power stations in northern Syria, the state-run Press TV reported.

The company will refurbish the al-Furat dam at an estimated cost of 14.8 million euros ($19 million) and the al-Baath plant for 767,000 euros, according to a report published on the news channel’s website. The al-Furat power station on the Euphrates River has the potential to generate 800 megawatts of electricity and the al-Baath 75 megawatts.

EU slaps new sanctions on Syria (CNN) -- European Union foreign ministers agreed Monday to impose fresh sanctions on Syria as a U.N.-backed peace plan -- along with all other diplomatic efforts -- has yet to stop the carnage that mounts every day.

The EU ministers agreed to an assets freeze and visa ban on two firms and three people believed to provide funding for the regime, according to the office of EU foreign policy chief Catherine Ashton.

A month after 'cease-fire,' where does Syria stand? (CNN) -- It's been a month since the "cease-fire" was due to come into effect in Syria as the first step in a U.N.-backed peace plan, with a team of U.N. monitors on the ground to observe the progress.

But clearly, there is no let-up in the violence. Daily reports spill in of bombings, shootings, explosions and more as opposition groups and the regime forces of President Bashar al-Assad battle for more than a year.

So, where does the Syria conflict stand now?

Drowned Libya oil chief feared going home VIENNA (Reuters) - Spat at in public by a fellow Libyan who called him a thief, watching his back on long walks through Vienna, eating poorly; Muammar Gaddafi's fugitive oil supremo was a troubled man in the months before he was found drowned in the Danube two weeks ago.

Just whom, or what, Shokri Ghanem feared may hold a key to his mysterious sudden death, just as he was under mounting pressure to reveal what he knew of suspect deals with foreign oil buyers that made billionaires of the late dictator's family.

Nigeria president unlikely to risk oil graft crackdown ABUJA (Reuters) - Nigerian President Goodluck Jonathan is coming under pressure to prosecute top officials implicated in a $6.8 billion fuel subsidy fraud, but many of the suspects are allies he is unlikely to go after if wants to keep his power base intact.

It has been three weeks since parliament produced a report detailing massive corruption in a state subsidised petrol import scheme and Jonathan has yet to indicate how he intends to respond.

Argentina as No Claims-Nation Revealed in Repsol Losses Repsol YPF SA (REP), the Spanish oil explorer seeking $10.5 billion from Argentina for seizing its assets, will line up behind companies from Exxon Mobil Corp. to Unisys Corp. yet to be repaid by the most-sued nation on earth.

There are 26 cases pending against Argentina, more than any other country, at the World Bank’s International Centre for Settlement of Investment Disputes in Washington, the principal arbitration court for claims against sovereign countries. So far, it has refused to pay any of the tribunal’s judgments, according to a Bank of America Merrill Lynch economists’ report.

Brazil, Venezuela, and Mexico: three ways to nationalize oil Argentina's renationalization of its biggest oil company, YPF, recently caused an outcry. But the cases of oil nationalization in Brazil, Mexico, and Venezuela show that outcomes can vary widely.

Crescent Won’t Provide Cash to Dana Gas for Sukuk Payment Crescent Petroleum Co., Dana Gas PJSC’s biggest shareholder, has no plan to provide cash to the United Arab Emirates-based natural gas producer to help pay a $1 billion Islamic bond due in October.

BHP leaves door open to U.S. shale gas write-down ADELAIDE (Reuters) - BHP Billiton's petroleum chief executive left the door open to the possibility of a write-down on the company's U.S. shale gas assets on Monday, but defended their long-term value.

Kurt Cobb - Chesapeake And JPMorgan: Risk (Mis)Management With Other People's Money If I were to stake you $50,000 and set you loose in the world's largest casino, you might try your luck in a big way at a number of games to see if you could double or maybe even triple your good fortune. But it would be an entirely different matter if the $50,000 were your own money. You might decide to take advantage of the casino's restaurant for which you would at least get a meal in return for your money. You might even test your skills with a few hundred dollars. But unless you were a gambling addict, you would be on your way pretty soon after the house had taken the few hundred dollars you decided you could afford to lose.

Running some of America's largest corporations is more like the former situation than the latter. This past week, two corporate titans proved just how easy it is to gamble with other people's money, especially when you know you have little to lose personally.

Japan to Experience Power Shortages This Summer, Panel Says Kansai Electric Power Co. and two other Japanese utilities may have power shortages this summer without supplies from nuclear reactors, a government panel said.

Kansai Electric, the utility most dependent on nuclear power, may face the biggest shortage of 14.9 percent, the independent committee said in a draft report published May 12. Kyushu Electric Power Co. and Hokkaido Electric Power Co. may have shortages of 2.2 percent and 1.9 percent, the report said.

Chevron Sells 80% of Wheatstone Gas After Deal With Tohoku Chevron Corp., the second-largest U.S. oil company, said it sold more than 80 percent of the gas from its Wheatstone project in Western Australia after reaching an agreement with Tohoku Electric Power Co.

The Japanese electricity supplier will buy as much as 1 million tons of liquefied natural gas per year under a 20-year agreement, Roy Krzywosinski, managing director of Chevron’s Australian unit, said yesterday in Adelaide.

Tepco Expects Narrower Net Loss as Government Takes Control Tokyo Electric Power Co. (9501) expects a narrower annual loss after a government-approved business plan proposed measures including an increase in electricity rates to return the company to profitability in two years.

Japan grapples with post-tsunami suicides TOKYO, Japan – More than 60 people have committed suicides related to last year’s 9.0 quake and tsunami, which triggered meltdowns at a nuclear plant in Fukushima, the Japanese government says.

The data comes as a family prepares to file the first lawsuit against the Tokyo Electric Power Co. over the suicide of Hamako Watanabe, a 58-year-old woman who set herself on fire in wake of the disaster.

6 hybrid supercars on the cutting edge Rising gas prices and tougher U.S. government gas-mileage requirements for the coming years have forced the car industry to take hybrid cars very seriously.

There's a whole new generation of so-called plug-in hybrid cars in the pipeline. These supercars can be recharged with household electricity, which is much cheaper than running a gasoline engine to recharge the battery.

Willing to Pay (a Little) for Clean Energy The perception that the American public is adamantly opposed to higher energy costs is at the root of most political opposition to policies favoring the adoption of renewable energy. But a new study of public opinion finds that people are in fact willing to pay to move to cleaner energy.

Growing the grunt: developing green biofuels for Australia In 300 BC, the Syrian city of Antioch had public street lighting fuelled by olive oil. At the 1900 Paris World Fair, German inventor Rudolph Diesel demonstrated his engine powered by peanut oil.

Biofuels are not new, but many of the technologies are, and interest in renewable, sustainable biofuels has recently been rising due to worry about peak oil and price pressures, vulnerability of energy supplies, dependence on imports, and greenhouse emissions.

Permaculture Visionary: "We Don't Need to Wait for Permission" to Transform Our Societies Four years ago, a British educator and permaculturist named Rob Hopkins initiated what has since become one of the most rapidly evolving and far-reaching social experiments of our time. The Transition movement - which encourages people in cities and towns across the world to devise their own unique, local solutions to peak oil and climate change in the absence of meaningful government action - has developed a spirited and devoted following and garnered praise from the likes of Bill McKibben and Richard Heinberg. Rob's latest book, "The Transition Companion," looks at how the movement has evolved from its beginnings in tiny Totnes, England, to hundreds of communities all over the world. "The Transition Companion" is available now from Chelsea Green Publishing. Rob recently spoke with Chelsea Green Associate Editor Brianne Goodspeed.

Backfiring Cookstoves Point Way to Assessing Aid Schemes In Orissa, households were randomly assigned to three waves of stove construction, and researchers measured a meaningful reduction in smoke inhalation in the first year after a stove was installed. Over a longer period, however, they saw no health benefits and no reduction in fuel use. That’s because once the stoves and chimneys developed cracks, the villagers generally chose not to fix or maintain their new devices but instead went back to their old, smoky ways of cooking.

This doesn’t suggest the clean-cookstove campaign should be abandoned so much as slowed down. It would be wise to test various designs in real-life settings, and, where necessary, take more time to human-proof models. Clean-cookstove advocates need to develop incentives for families to stick with the stoves, and they need to study why many villagers in the India trial embraced the devices yet continued using their conventional cooking fires as well. Otherwise, the innovative stoves of today could wind up in the same junk piles as models from efforts decades ago.

The man who takes on the environmental conservatives Mr Hauge is the founder of Bellona, an environmental non-governmental organisation (NGO) that advocates controversial practices such as burying greenhouse-gas emissions underground. It has forged close ties with industry and government alike. Most of its annual budget, which ranges between US$10 million (Dh36.7m) and $12m a year comes from corporations.

Petition calls on Brazilian president to veto 'catastrophic' forest code More than 1.5 million people in Europe, the US and elsewhere have petitioned the Brazilian president, Dilma Rousseff, to veto a law that critics say could lead to the loss of 220,000 square kilometres of Amazonian rainforest, an area close to the combined size of the UK and France.

Time, place and how wood is used are factors in carbon emissions from deforestation When trees are felled to create solid wood products, such as lumber for housing, that wood retains much of its carbon for decades, the researchers found. In contrast, when wood is used for bioenergy or turned into pulp for paper, nearly all of its carbon is released into the atmosphere. Carbon is a major contributor to greenhouse gases.

"We found that 30 years after a forest clearing, between 0 percent and 62 percent of carbon from that forest might remain in storage," said lead author J. Mason Earles, a doctoral student with the UC Davis Institute of Transportation Studies. "Previous models generally assumed that it was all released immediately."

Eating wisely can lower carbon footprint: Study London: Consumers can help curb greenhouse gas emissions by reducing the quantity of food they buy, serve and waste, a study says.

According to the study conducted at the University of Edinburgh, UK, some 360,000 tonnes of milk poured down kitchen sinks in Britain creates a carbon footprint equivalent to exhaust emissions of 20,000 cars annually, or 100,000 tonnes of CO2.

New Zealand Government Mulls Break For Importers Of Greenhouse Gas-containing Goods WELLINGTON (Bernama) -- The New Zealand government announced Monday it was considering allowing importers of goods containing synthetic greenhouse gases to pay a levy rather than submit them to the country's fledgling emissions trading scheme (ETS).

The proposals were welcomed by new car dealers and other importers who feared the ETS obligations would be too costly, Xinhua news agency reported.

U.N. cap-and-trade system: Good for China and India, but who else? The United Nations-administered cap and trade system to reduce planetary greenhouse gases through investment in “green” projects in developing countries has directed most of its billions of dollars in investments to China and India, two of the world’s most notorious polluters.

Indeed, China and India together have gotten more than 70 percent of the more than 4,100 projects so far registered for the system, while most developing nations, aside from a handful, have gotten hardly any at all, according to the system’s own accounts.

The Figueres family led Costa Rica's revolution, and now its green revolution Say the name Figueres in Costa Rica and it's bound to get a reaction. José "Don Pepe" Figueres led the 1948 revolution, was president three times, nationalised the banks and gave women and black people the vote. His daughter Christiana is the UN's climate chief trying to steer almost 200 countries through the most complex international negotiations ever attempted; and her brother José María was one of Latin America's youngest ever presidents at the age of 39.

Now José María – who coined the phrase "there's no planet B" when head of the World Economic Forum – has joined his sister in the fight for a global energy revolution by taking over as head of the climate change business thinktank Carbon War Room, which aims to get business to cut gigatonnes of carbon by sharing best practice information.

Norway acts as others drag feet on carbon emissions The industry is banking on country-specific conditions, such as a need for carbon dioxide for oil recovery in the United States or government support in China, to drive projects and technology innovation in the years ahead.

The idea of going solo when it comes to the quest to bury carbon emissions underground reflects a growing sentiment among nations that they are alone when it comes to the fight against global warming.

In Rhode Island, Protecting a Shoreline and a Lifeline The problematic part of Matunuck is about 1,400 feet of beach, parceled into private lots, between two old sea walls that extend in opposite directions and were built before state regulations came into effect. Along some parts of this open stretch, there are less than a dozen feet of sand protecting the road — the town’s lifeline — from the water.

In theory, this leaves the neighborhood with three basic courses of action. It can protect the beachfront, it can protect the road or it can retreat and move away from the encroaching shoreline, as a growing number of environmentalists and scientists recommend.

Almost nobody here likes that last option. “If we do this, how far do we retreat?” asked Frank Tassoni, the president of the Mary Carpenter’s Homeowners’ Association, which includes residents who keep trailers and small cottages on the tract of land across the road from the beach. “If we keep doing this, Rhode Island will be gone. We’re trying to find a balance. We’re not killing baby seals out here.”

This a guest post by Jean Laherrère, a long time guest contributor to TheOilDrum.

Defining deepwater oil as the offshore resource found in water depths over 500 m, the data available as of October of 2010 was pointing to an ultimate around 150 Gb. This is the result of an extrapolation made last year:

Figure 1: world deepwater (>500 m) creaming curve 1971-Oct 2010

The previous ultimate estimate in 2008 was 100 Gb, missing the third cycle in subsalt plays.

Figure 2: world deepwater (>500 m) creaming curve 1971-2007

The cumulative discovery versus time with the data up to October of 2010 implied that most discoveries would be made before 2025.

Figure 3: world deepwater (>500 m) cumulative discovery versus time 1971-2009

Applying the Hubbert linearisation method to oil discovery confirmed an ulitmate of about 150 Gb.

Figure 4: world deepwater (>500 m) oil discovery Hubbert linearisation

The average oil field size has been around 100 Mb the last 20 years and a little less for gas in Mboe. At the same time there is a sharp change in the number of fields since 1995: it was less than 10 before that date and has been over 50 since!

Figure 5: world deepwater (>500 m) annual oil & gas size

The plot of cumulative discovery versus field elevation shows that the break for water depth is more about 200 m rather than 500 m.

Figure 6: cumulative 2P discovery versus field elevation per continent (mid 2009)

An update of this forecast was made with the data available up to October of 2011, this time with deepwater defined as the resource lying under 200 m of water or more.

The IHS claims that deepwater is for depths over 400 m, but the database indicates that in the terrain deepwater is for over 200 m deep. In the US Gulf of Mexico the deepwater royalty relief act of 1995 refers to depths over 200 m (656 ft), but the MMS (now BOEMRE) reports depths from 1000 ft onwards. There is little consensus on the definition of deepwater, just as for ultra deep.

The annual crude less extra heavy oil discovery is shown here since 1900, with both definitions of deepwater (>200 m and >500 m).

Figure 7: world annual crude less extra-heavy oil discovery and deepwater (>200 & 500 m)

The same data, now plotted as cumulative discovery.

Figure 8: world cumulative crude less extra-heavy oil discovery and deepwater

The creaming curve for world deepwater oil, this time defined as over 200 m deep, is here extrapolated with two cycles towards 200 Gb, meaning about 50 Gb for the water column interval 200-500 m. There is enough uncertainty to allow a third cycle, with a possible increase in the ultimate, but another new subsalt play is needed!

Figure 9: world deepwater (>200 m) creaming curve 1969-Oct 2011

Combining oil and gas yields a simpler creaming curve, except for the last 200 fields.

Figure 10: world deepwater (>200 m) oil plus gas creaming curve 1969-Oct 2011

The cumulative discovery versus time plot displays a sharp increase in the last 15 years, cause by the subsalt plays.

Figure 11: world deepwater (>200 m) cumulative discovery

The plot for oil discovery per continent shows that Latin America has the sharpest increase due to Brasil. In the past there were jumps in the North Sea with Gullfalks, Troll and Snore in 1978 and in the Caspian with Azeri-Chirag-Guneshli in 1985.

Figure 12: world deepwater (>200 m) cumulative oil discovery per continent

The plot for gas discoveries per continent shows the large jump in 1988 with Shtokman and the recent increase in Asia since 2000.

Figure 13: world deepwater (>200 m) cumulative natural gas discovery per continent

The creaming curve for oil per continent shows that Brasil with the subsalt discoveries has the largest increase and that North America still has some potential, though the average size here is quite less than in Brasil.

Figure 14: world deepwater (>200 m) oil creaming curve per continent 1969-Oct 2011

The creaming curve for gas shows that the best result is for the CIS (Former Soviet Union) with the Barentz and Caspian 9 discoveries. In second comes Asia and the least efficient is North America. The Middle East, with 20 Tcf, mainly from Israel, is at a good start.

Figure 15: world deepwater (>200 m) gas creaming curve per continent 1969-Oct 2011

The average field size is about 100 Mb for oil and 400 Gcf for gas.

Figure 16: world deepwater (>200 m) oil & gas average field size

Conclusion

Subsalt discoveries are now well taken into account in the deepwater oil ultimate and have increased it by around 50 Gb since 2008. It is a significant increase, but very small compared to the uncertainty of the past world oil discovery, with the 300 Gb of speculative resources (confirmed by Sadad Al-Huseini) in OPEC reserves and with the 150 Gb correction from ABC1 reserves (used in scout databases) to 2P reserves. For more than 10 years I corrected the ABC1 reserves data for the FSU by 30 % to reduce them to 2P. This is based on the comparison of ABC1 field data with ultimates obtained from oil decline profiles in some Russian fields. Now Gazprom publishes in their annual report both the ABC1 and 2P reserves, the latter from audits, showing that this 30% correction of is correct for oil and gas (ratio 2P/ABC1 = 70 %); nevertheless this figure seems higher for condensate.

Figure 17: Gazprom reserves ratio 2P/ABC1 2003-2010 from annual reports

Furthermore, I have some doubt on the reliability of some deepwater oil reserves figures. My paper entitled “Deepwater GOM reserves versus production” (part I, part II and part III) shows that the oil estimate of deepwater fields reserves seem optimistic for the Gulf of Mexico, in particular Thunder Horse.

The Brasilian subsalt reservoirs are complex and there is little historical production, with only a pilot project online since October of 2010 in Tupi, now called Lula (already with 14 wells drilled) with 6 Gb of 2P reserves. The BG Group, which holds a 25% stake at Lula, has reported on the first production test with a FPSO, three producing wells and one gas injector. While it was expected to reach maximum production at 100 000 b/d, it actually peaked at 70 000 b/d in December of 2011, and has registered a decline of 5 000 b/d in the following two months.

Figure 18: Lula first production: Oct 2010-Jan 2012 from BP Group

In its 2012 annual report the BG Group forecasts gross production capacity in this play to reach 2.3 Mboe/d in 2017, with a total of 13 FPSO in the Lula, Cernambi (formerly Iracema) and Guara fields.

Deepwater oil production will help reduce the decline in world oil production from aging fields. The IEA claims that four Saudi Arabias need to be discovered up to 2030 to replace the present decline in production (about 5 %/a). The deepwater ultimate is likely to represent less than half of Saudi Arabia’s oil ultimate. It is not enough!

WSJ: 'Undisclosed' Chesapeake debt looms A US report contends that the embattled Chesapeake Energy has “previously unreported liabilities” summing to $1.4 billion resulting from a programme that allowed it to exchange future oil and gas production for cash up front.

The Wall Street Journal analysed 10 of the company’s Volumetric Production Payment agreements and projected that the costs associated with the arrangements was far higher than $600 million over 10 years previously estimated.

Chesapeake wins breathing space with $3 bln loan (Reuters) - Chesapeake Energy Corp said it had received a $3 billion loan from Goldman Sachs and Jeffries Group that will give it breathing room to sell assets and close a funding gap this year.

The company, which has been embroiled in a corporate governance crisis that prompted its move to replace co-founder Aubrey McClendon as chairman, said the new unsecured loan will be used to repay money borrowed under its existing $4 billion revolving credit facility.

Report: Pickens sells shares in Chesapeake Energy Billionaire and former oil magnate T. Boone Pickens’s investment firm has reportedly sold more than half a million shares in Chesapeake Energy, the embattled natural-gas company.

Oil price declines on slower China growth NEW YORK (AP) — The price of oil fell Friday after reports that China's economy appears to be slowing down.

China, the world's second-largest oil consumer, reported a sharp decline in both investment and industrial production growth in April. A slowdown in China could push oil consumption — and prices — lower this year.

Higher Oil Futures Margins May Boost Volatility, IEA Says Rising margin requirements in oil futures trading may increase volatility and concentrate market share in the hands of large speculators, the International Energy Agency said.

The Obama administration proposed rules on April 17 to strengthen the oversight of the U.S. Commodity Futures Trading Commission to give it authority to raise margin requirements in oil futures trading.

Essar Oil Reports Quarterly Loss as Refining Margins Shrink Essar Oil Ltd. (ESOIL), the operator of India’s second-biggest non-state refinery, posted a loss for the third straight quarter after earnings from turning crude into fuels declined.

China returns to Iranian North Pars while problems remain at South Pars The China National Offshore Oil Corp (SINOC) has announced readiness to restart working on development of Iran's North Pars gas field five years after Iran threatened to cancel the contract due to the Chinese company's repeated delays, the ISNA News Agency said in a report on Monday.

Venezuela's PDVSA confirms $3 billion bond The issue is Venezuela's first of the year and might kickstart further borrowing to help President Hugo Chavez boost public spending ahead of an October election.

In recent years, PDVSA has enjoyed growing profits thanks to high global oil prices, but has also issued record amounts of debt to cover its own operating budget, transfers to central government, and heavy spending on social programs.

Nigeria power privatisation winners named in October ABUJA (Reuters) - Nigeria's privatisation body said on Saturday the preferred bidders for state power assets would be announced in October, hoping to alleviate chronic electricity shortages holding back Africa's second biggest economy.

Nigeria plans to sell off 11 distribution and 6 generation companies as part of plans to privatise a power sector rife with inefficiency and corruption.

Gas' gain could be coal's loss The coal industry, which employs thousands of Ohioans, has long been assailed by environmentalists as the fossil of fossil fuels -- primitive, dying off and unable to adapt to a world more conscious of its carbon footprint.

Now it faces pressure from a competitor, natural gas, which is cutting into coal's most important customer base, utility companies.

Shale gas to put South Australia on front foot as global energy superpower "As recently as 2006, US natural gas production was in decline but drilling technology advances have allowed US companies to commercialise gas found in deep shales, which has caused the country's gas production to rise sharply," he said.

"Natural gas from shale is now the fastest-growing contributor to total primary energy in the US. Only a few years ago, the US was planning to import gas from other countries but now it is building major liquified natural gas terminals to export its oversupply of shale gas.

"The SA shale industry is still in the early stages of development but many people think the state is very well positioned to capitalise upon its shale gas resources on a large scale."

Fracking reaches point-of-no-return for EU legislators What the issue boils down to in Europe is that there is no consistent line taken since there is plenty of unknowns. However, what is needed is a process that properly includes citizens and communities in decision-making related to shale gas, shale oil or coal bed methane. HEAL endorses free and fully-informed consent of local communities which is not applied for most fracking projects prior to both exploration and exploitation phases, while they should be placed at the heart of the discussions.

Researcher questions impartiality of industry-backed oilsands education program EDMONTON - An industry-funded program that offers high school teachers a six-day trip to Fort McMurray to "experience Alberta's oilsands" is being expanded across the country.

While the operators of Inside Education say they work hard to ensure their programming offers plenty of balance, others say informing educators about controversial developments shouldn't be left to those with most to gain from them.

Local Author Predicts Strong Future For Energy Resources Jay Warmke of Blue Rock Station said he wrote the book, When The Biomass Hits The Wind Turbine, because he believes there are more energy resources available than the average person recognizes.

"I hate to be the one to break it to you, but we've gone past peak oil, we've gone past peak coal, we've gone past peak natural gas, and what that means is that half of all of the supplies on this planet has been used up, and that's the easy half," he said. "I'm always struck at how people feel hopeless. Everything has been used up and they have no hope, and I wanted to do some research to see [if this was] the case."

Gill Tract Farm Essential for Post-Peak Oil Food Security Without food, we cannot survive and without local farms to grow and supply food in a post-peak oil world, the costs associated with traditional long-distance, oil-reliant food production will continue to soar and become unsustainable.

At the heart of the dispute over the Gill Tract, a 10-acre plot of Class-1 agricultural soil in Albany owned by UC Berkeley and currently being occupied by as many as two-dozen farmers, is a grassroots movement to ensure local food sovereignty, sustainability and security.

A Higher Price Tag for a Nuclear Project The flagship project of a hoped-for but not-yet-realized “nuclear renaissance,” the Vogtle 3 and 4 reactors under construction near Augusta, Ga., may cost about $900 million more than had been estimated, the Southern Company said in a filing this week with the Securities and Exchange Commission.

Battery maker A123 Systems expects a first-quarter loss of $125 million Battery maker A123 Systems expects a first-quarter loss of $125 million, reflecting weak demand for electric vehicles and a recall of potentially defective batteries.

Conservative thinktanks step up attacks against Obama's clean energy strategy A number of rightwing organisations, including Americans for Prosperity, which is funded by the billionaire Koch brothers, are attacking Obama for his support for solar and wind power. The American Legislative Exchange Council (Alec), which also has financial links to the Kochs, has drafted bills to overturn state laws promoting wind energy.

Now a confidential strategy memo seen by the Guardian advises using "subversion" to build a national movement of wind farm protesters.

Cracking the Smart Energy Market Research from several pilot projects has shown that people who use these types of devices are saving money on their monthly bills, in some cases up to 20 percent.

Yet despite the upbeat prediction from Parks Associates, consumer response has been mostly lukewarm, according to Neil Strother, an analyst with Pike Research. He said that fewer than 1 percent of homes in North America had installed some form of in-home energy management system by the end of 2011.

A meeting of minds on a sustainable future? The unresolved issue remains whether the focus should be on critical changes that governments, largely in developing countries, will need to make to convince investors that aligning asset allocation with the green economy will provide superior risk-adjusted returns 'business as usual'. Or, whether there will be agreement to modify longer-term trends in production and consumption patterns to recognise ecological limits of natural resource use.

California and Quebec Near an Agreement for Trading of Carbon Permits SAN FRANCISCO — California and Quebec moved to knit together their fledgling carbon markets on Wednesday as California proposed a new regulation allowing cross-border trading of the permits that industries must acquire to cover their emissions of greenhouse gases.

Climate clash: Corporate giants caught as groups skirmish Some corporate giants are caught in the middle of a battle between a think tank skeptical of manmade global warming and an environmental group that it is trying to undermine its financial health.

'We Are Losing the Planet' The environmental movement is losing momentum and governments around the world are ignoring their responsibility for slowing climate change. Greenpeace head Kumi Naidoo, however, remains optimistic. In an interview, he explains his new vision for a sustainable world -- and how the pope can help.

Scientists urge action on world's biggest problems LONDON (Reuters) - Scientists from 15 countries are calling for a better political response to the provision of water and energy to meet the challenge of feeding a world of 9 billion people within 30 years.

The joint statement by some of the world's leading science academies was issued on Thursday ahead of the G8 summit in the United States. It is part of the annual lobbying effort aimed at focusing the attention of world leaders on issues the scientific community regards as crucial.

For the first time, the scientists argue that looming shortages in water and energy supplies should be treated as a single issue.

Could Water Bring Jobs Back to the U.S.? Have you gotten the memo yet? You can stop worrying about peak oil: the United States is sitting on centuries of natural gas and Canada is full of tar sands. But then there is water. No less than Morgan Stanley Smith Barney declared “peak water” the challenge of the century last December in a report upholstered with authoritative graphs showing the heating of the world and the shrinking of water resources. Words almost failed report writers as they declared, “Water may turn out to be the biggest commodity story of the 21st century, as declining supply and rising demand combine to create the proverbial perfect storm.”

Oil likely to stay high despite good supply - IEA LONDON (Reuters) - Tension between Iran and the West is likely to keep oil prices high despite a dramatic improvement in world supply and a big build in stocks, the International Energy Agency (IEA) said on Friday.

The agency, which advises 28 industrialised nations on energy policy, said soaring global oil supply from OPEC countries and the United States far outpaced global demand, curbed by poor economic activity in developed nations.

The agency said global oil supply rose 600,000 barrels per day (bpd) to 91 million bpd in April and was now 3.9 million bpd over year ago levels, with 90 percent of the increase coming from OPEC.

Saudi Arabia has said it pumped 10.1 million bpd last month, its highest for more than 30 years, in a bid to meet growing demand and curb oil prices, which hit a three-and-a-half-year high in March.

OPEC Says ‘Plentiful’ Global Oil Supplies Outpace Demand The Organization of Petroleum Exporting Countries said that global oil supplies are outpacing demand levels, keeping its forecast for world consumption this year unchanged.

OPEC, scheduled to meet next month, is producing 8.3 percent more crude than it considers necessary this quarter, data released today by the Vienna-based group show. This has helped inventories in developed nations to reach “comfortable levels,” equivalent to about 59 days worth of consumption, according to an e-mailed report.

“Higher OPEC crude oil production underscores the current trend of plentiful supply in excess of market requirements,” OPEC’s secretariat said in its Monthly Oil Market Report.

Oil finds itself on slippery slope Record production levels, weakening demand, and a declining risk profile in the Gulf have put an end to three consecutive monthly gains in oil prices, Opec said in its monthly report yesterday.

Oil Heads for Second Weekly Drop as Supply Exceeds Demand Oil fell in New York, heading for a second weekly drop, on concern that Europe’s debt crisis will worsen and curb fuel demand as global crude supplies increase.

Futures slipped as much as 1.4 percent, retreating for the seventh day in eight. OPEC is producing 8.3 percent more crude than it considers necessary this quarter, data released yesterday by the Vienna-based group showed. Prices narrowed their declines after the International Energy Agency said today global oil markets are “marginally tighter” and predicted that geopolitical risks to crude supply will keep prices high.

Long, climbing road The biggest problem with the almost constantly increasing petrol prices in SA is that demand is quite unresponsive to price changes: South Africans don’t tend to buy less of the stuff when the price rises.

Fuel users are in this sense almost held hostage to the international price of crude and the rand-dollar exchange rate — these determine the basic fuel price, which makes up 59% of the pump price. Consumers have also been hit by an additional 28c/l in the pump price from increases in the fuel levy and the Road Accident Fund.

Peak oil revisited: the real challenges are investment and sustainability, not availability The general perception of global oil reserves is unnecessarily gloomy and far removed from reality, even among many policymakers and academics. This is dangerous because it obscures the real and serious economic and environmental challenges faced by the oil sector, argues Noé van Hulst. The Director of the new Energy Academy Europe calls on the oil industry to devote more effort explaining the public what the real challenges are.

GOP: ‘You Think We’re Going To Have A Press Conference Now To Congratulate The Administration For Decreasing Gas Prices?’ The GOP’s plan to blame Obama’s policies for rising gasoline prices has run into one small bump in the road. Gasoline prices have dropped $0.15 a gallon in the past month, to $3.79 per gallon this week, down from its peak of $3.94 in early April, according to The Energy Information Administration.

Prompt gas slump defies Norway supply cutback (Reuters) - British prompt gas prices fell slightly on Friday morning on forecasts of warmer temperatures this weekend and healthy supply despite cutbacks in Norwegian flows due to maintenance work.

The start of scheduled maintenance at Norway's Ormen Lange gas processing plant cut supplies via the Langeled pipeline - Britain's main sub-sea import line - but did not impact prices because the drop was in line with expectations.

Saudis face growth limits over natural gas supplies A shortage of natural gas could affect future industrial growth in Saudi Arabia, according to the head of Jubail Industrial City, the world's largest petrochemical cluster.

Difference Engine: Awash in the stuff EVEN as it tries to slow production down, America is still pumping three billion more cubic feet (85m cubic metres) of natural gas a day out of the ground than it can consume. The country has become so awash in the stuff since “fracking” (hydraulic fracturing of gas-bearing shale deposits) began barely five years ago that the price has plummeted from $8 per thousand cubic feet to $2. (A thousand cubic feet of natural gas contains roughly a million BTUs of energy.) Not that long ago, natural gas was a tenth of the price of oil in energy terms; now it is a 50th.

If the natural-gas companies go on producing at the current rate, all the storage reservoirs in America will be full by autumn. With nowhere left to put the stuff, its marginal price will fall to zero. Such a situation is unsustainable.

Fracking does not pose serious risk A University of Aberdeen study on hydraulic fracturing or fracking for gas says that the process “does not pose a significant environmental risk”, but there are potential risks to ground water from “poor well design or construction”.

The study for the Environmental Protection Agency (EPA), published today, also finds that Europe’s geology may be far more complex than that in the US, where the fracking industry is well developed.

Shale Gas Explorer Says U.K. Production May Start in 2014 Cuadrilla Resources Ltd., a U.K. shale-gas explorer that suspended drilling in northwest England after causing minor earthquakes, expects to resume work this year and said gas production may start in 2014.

“By the first quarter of 2013, we will be far enough along in the exploration program to say this makes sense to go ahead and apply for a full field development permit,” Cuadrilla Chief Executive Officer Mark Miller said in an interview. “Production could be under way as early as 2014.”

Granville Township suspends use of brine GRANVILLE TOWNSHIP -- The controversy about a technique used to drill oil and gas wells in deep-lying shale has caused Granville Township to pay closer attention to a byproduct of that drilling it uses for road maintenance: brine.

The township trustees have suspended their use of brine for melting ice on township roads pending an investigation of the possible health and environmental risks of its use, Township Trustee Paul Jenks said.

Lights Go Out in Spain as Cuts Plunge Highways Into Darkness Cars went barreling along the highway in darkness, ferrying families from Madrid to the beaches of Catalonia during the Easter holiday season, the black stalks of unlit streetlamps flicking past their windows. Truck drivers honked angrily as motorists switched on their full beams to pick out curves in the road, momentarily dazzling oncoming traffic.

Motorists traveling along the main highway linking the Spanish capital to Seville and the rest of the south face similar challenges.

“In some stretches it looks like they’ve been switching off the lights, in others they are missing the bulbs or the cables,” says Pascual Cabello, 32, who runs a fleet of eight trucks. “It’s only going to get worse,” he adds.

Natixis plans to shut commodities brokerage unit NEW YORK/PARIS (Reuters) - French bank Natixis said it plans to close its commodities brokerage division, as one of the oldest ring-dealing members of the London Metal Exchange becomes the latest victim of the European debt crisis.

Qatar buys ‘major’ stake in oil giant Shell LONDON — Qatar is continuing its overseas buying spree, snapping up a stake in Royal Dutch Shell and reportedly also eyeing a chunk of Italian oil major ENI .

A Shell spokeswoman confirmed that Qatar had bought a stake but declined to say how large.

Eni probe will not stall Kazakh oil project-official (Reuters) - Kazakhstan will develop its massive Kashagan oilfield regardless of an Italian investigation into the business activities of key consortium partner Eni in the former Soviet republic, a Kazakh Oil and Gas Ministry official said on Friday.

Cyprus gets 15 bids for offshore gas search (Reuters) - Cyprus received 15 bids for its second offshore hydrocarbons licensing round, including energy heavyweights Petronas, Total, and Kogas, energy minister Neoclis Sylikiotis said on Friday.

Riddles, mysteries and enigmas FEW people outside Russia have ever heard of Gunvor—and Gunvor would probably prefer it that way. It is the world’s fourth-biggest oil trader, and at its peak handled roughly a third of Russia’s seaborne exports of crude oil. We suspect that Gunvor has been driving down the price of Russian oil. An investigation by The Economist into Gunvor’s trading in Urals crude, a benchmark blend in north-west Europe, suggests that such a strategy could have helped the firm buy oil in Russia cheaply and, in theory, earn inflated profits when it sold the same oil on the international market at full price.

Iraq Oil Output Beating Iran Ends Saddam Legacy Iraq, seeking to more than double oil output by 2015, is poised to overtake Iran as OPEC’s second- largest producer by the end of the year as sanctions hobble crude production in its Persian Gulf neighbor.

Iraq is pumping at the highest rate since Saddam Hussein seized power in 1979, supported by foreign investors such as Exxon Mobil Corp. and BP Plc (BP/) that are developing new fields and reworking older deposits. The country produced 3.03 million barrels a day in April, 7.7 percent more than in March, while Iranian production declined to 3.2 million barrels a day, according to an OPEC monthly report yesterday. Iraq’s output last exceeded Iran’s in 1988, when the countries ended their eight-year war, statistics compiled by BP show.

Gulf Arab states face obstacles to unity push (Reuters) - Gulf Arab leaders meeting on Monday will discuss closer union between their six states because of what they see as growing threats from Iran and al Qaeda after the Arab uprisings, but significant political obstacles loom.

Syrians take to the streets after deadly bombings (CNN) -- Syrians took to the streets in protest Friday, a day after massive suicide bombings ripped through the capital, killing dozens in the nation's deadliest attack since an uprising started 14 months ago.

New attacks hit some areas Friday, killing at least five people, according to the Local Coordination Committees of Syria, an opposition group.

Cnooc Deploys Oil Rig as Weapon to Assert China Sea Claims China’s first deep-water drilling rig began operations near islands in the South China Sea in a move to assert Beijing’s territorial claims as travel agencies suspended tours to the Philippines amid safety concerns.

Pirates Hijack Greek-Owned Tanker off Oman Pirates have hijacked a Greek-owned oil tanker carrying 135,000 metric tons of crude oil while in the Arabian Sea off Oman, the vessel's manager said.

Oil rig workers make nearly $100,000 a year NEW YORK (CNNMoney) -- It may be dangerous, difficult work, but oil drillers are well compensated for the job: In 2011 the average salary for rig workers and other industry personnel was $99,175.

JPMorgan faces backlash over ties to Sudan NEW YORK (CNNMoney) -- For the second year in a row, JPMorgan Chase is recommending shareholders vote against a proposal calling for the bank to stop investing in companies that "substantially contribute to genocide or crimes against humanity."

Specifically, the proposal points to JPMorgan's big stake in Chinese oil giant PetroChina, the publicly-traded arm of China National Petroleum Company, which has been widely recognized and condemned for helping finance genocide in Sudan.

South Sudan Hunts for Loans as Oil-Output Halt Dents Economy South Sudan is negotiating loans to boost the value of its currency and keep its economy afloat as foreign-exchange reserves decline after the country halted oil production, Deputy Finance Minister Marial Awou Yol said.

The East African nation has secured a $100 million line of credit from Qatar National Bank and will receive a $500-million loan within a month from an unidentified provider, Yol said in an interview in Juba, the capital, on May 8. Loans are also being sought from countries including China.

Arch Coal Lures Lenders With Coal in Ground: Corporate Finance Lenders are allowing Arch Coal Inc. (ACI) to borrow $1 billion without the typical level of restrictions, helping the company overcome plunging energy prices as it cuts spending after two quarters of cash outflows.

The fourth-largest U.S. producer of coal, saddled with $4.1 billion of debt, will use proceeds of a term loan to refinance obligations and eliminate maturities until 2016 while increasing liquidity. The company is reducing its revolver by $1 billion and loosening restrictions on the existing credit line.

Africa miner SNR opens new coal export route LONDON (Reuters) - South African coal miner Strategic Natural Resources Plc (SNR) will open a new coal export route using the East London port in the Eastern Cape when its joint venture marketing firm begins shipments in December.

SNR has formed the joint venture company with Swiss-based trader Trasteel to sell SNR's anthracite coal, the South African firm said on Wednesday.

Why Green Gold Is The 'New' Black Gold As the world pursues ever more dangerous environments in order to discover untapped reserves, the concept of Peak Oil begins to take a more realistic shape. Companies like BP and Transocean know all too well the risks of exploring the deepwater frontier for abundant crude oil. Even Canadian oil sands leader Suncor Energy would have to admit that such innovative sources of oil are coming at a much higher price and cost of efficiency than they once did. But if black oil is on the way out due to increasing costs passed down to industry, what's going to help alleviate the growing void?

Energy Experts Discuss Economy of Oil at Shasha Seminar Wesleyan hosted the 10th Annual Shasha Seminar for Human Concerns on April 19-20. The Shasha Seminar is an educational forum for Wesleyan alumni, parents, faculty and friends that provides an opportunity to explore issues of global concern in a small seminar environment.

Endowed by James J. Shasha ’50 P’82, the seminar supports lifelong learning and encourages participants to expand their knowledge and perspectives on significant issues. The 2012 theme was The Political Economy of Oil.

The Peak Oil Crisis: Perspective While waiting to see how the Iranian nuclear confrontation and the various Eurozone crises sort themselves out, there is time to step back and look at the interaction of the major forces that will shape our future. While the problems of oil depletion are already upon us, shrinking resources are only a part of global dynamics currently.

There are at least six major forces moving civilization in the world today: 1) population growth: 2) economic growth; 3) political stability; 4) technological innovation; and more recently 5) resource depletion and 6.) climate change. There are, of course, other less obvious change-producing forces at work in the world – theology, geology, and culture to name a few--but these six look like a good place to start thinking about the interaction of change. Our six forces are intertwined so that significant movement in one will eventually result in feedbacks affecting some or all of the others.

Showdown at the H2O Corral Tombstone, Arizona (CNN) -- There's a popular saying in the American West: Whiskey's for drinking, but water's for fighting over. This dusty little city, made famous by the Gunfight at the O.K. Corral, has a dilly of a water fight on its hands.

Tombstone, population 1,400, is suing the federal government -- and it is likely to be a landmark legal battle.

Insight: Canada's oil sand battle with Europe (Reuters) - There's a science to using science.

On May 9, the government of Alberta released a study into the extra carbon emitted by crude produced using oil sands instead of more conventional sources. The study, by a unit of California-based Jacobs Engineering Group, found that emissions from oil-sand crude are just 12 percent higher than from regular crude.

But the report was not just about the science. It also sent a political signal to Europe: Canada's fight over oil sands is not done yet.

Analysis: Canada may seek to silence some foes of new pipeline CALGARY, Alberta (Reuters) - Some opponents of the proposed C$5.5 billion ($5.5 billion) Northern Gateway oil pipeline to Canada's Pacific Coast may not get a chance to be heard as scheduled by the regulatory panel looking at the plan because of federal government moves to streamline the country's environmental review process.

How Brazil Is Making an Example of Chevron For all its global reach and technological sophistication, the second-largest U.S. energy company (ranked behind only ExxonMobil in market capitalization) didn’t have an effective plan for a sudden and multifront assault that included populist protest, political posturing, and criminal prosecution—for, in Chevron’s view, cleaning up after itself. Part of the blame rests with Chevron’s top executives in Brazil. The company represented itself in a critical foreign market with a surprisingly provincial American face. Buck, by all accounts a talented and exacting internal corporate leader, is not the statesman Chevron needed to explain the Frade accident to Brazil’s media.

State power Expect for a brief period of nationalisation in the run-up to and during the second world war, Japan’s electricity industry has always been proudly private. Indeed, for much of its history, it was fiercely independent. In the 1920s the competition was so brutal that rival salesmen would brawl outside their customers’ premises to win the right to flog cheap electricity.

Sadly, those days are long gone. Since the 1980s the utilities have looked more like bloated government departments than red-blooded businesses. Their bosses have tended to be lawyers more familiar with pulling the levers of political than electric power.

End Polluter Welfare Bill Would Stop Coal, Oil, Gas Subsidies WASHINGTON, DC (ENS) - Senator Bernie Sanders, a Vermont Independent, and Congressmen Keith Ellison, a Minnesota Democrat, today introduced a legislation to end billions of dollars in subsidies for the oil, gas and coal industries.

The Sanders-Ellison End Polluter Welfare bill abolishes federal policies making Americans taxpayers pay for fossil fuel company investments. Under current law, more than $110 billion in federal subsidies would go to the oil, coal and gas industries in the coming decade.

EPA to remove vapor-capturing rubber boot from gas pump handles The Obama administration and the Environmental Protection Agency announced Thursday they intend to phase out the rubber boots on gas pump handles now used to capture harmful gasoline vapors while refueling cars.

The EPA says the vapor-capturing fuel pumps are redundant because more than 70% of all cars on the road today are equipped with on-board systems that capture the harmful vapors.

Honda wins appeal of small-claims hybrid ruling A California Superior Court Judge has reversed the high-profile verdict in a small claims case filed by a woman who claimed her Honda Civic Hybrid delivered significantly worse than the maker’s advertising claimed it would.

Couple gets 84 mpg in Passat diesel on real roads A couple well-known for fuel mileage records on regular roads notched 84.1 mpg in a Volkswagen Passat diesel with six-speed manual.

That high mileage let them go 1,621.1 miles on a single tank of fuel in a three-day ramble through nine states from Houston to Northern Virginia, VW and the couple say.

Saudi Arabia Plans $109 Billion Boost for Solar Power Saudi Arabia is seeking investors for a $109 billion plan to create a solar industry that generates a third of the nation’s electricity by 2032, according to officials at the agency developing the plan.

The world’s largest crude oil exporter aims to have 41,000 megawatts of solar capacity within two decades, said Maher al- Odan, a consultant at the King Abdullah City for Atomic and Renewable Energy. Khalid al-Suliman, vice president for the organization known as Ka-care, said on May 8 in Riyadh that nuclear, wind and geothermal would contribute 21,000 megawatts.

Solar Installers Offer Deals, Gaining Converts HOLMDEL, N.J. — Jay Nuzzi, a New Jersey state trooper, had put off installing solar panels on his home here for years, deterred by the $70,000 it could cost. Then on a trip to Home Depot, he stumbled across a booth for Roof Diagnostics, which offered him a solar system at a price he couldn’t refuse: free.

Mr. Nuzzi had to sign a 20-year contract to buy electricity generated by the roof panels, which he would not own. But the rates were well below what he was paying to the local utility. “It’s no cost to the homeowner — how do you turn it down?” Mr. Nuzzi said on a recent overcast morning as a crew attached 41 shiny black modules to his roof. “It was a no-brainer.”

Assessing Whether Solar Panels Make Sense for You Part of the appeal here is that customers can not only reduce their energy costs but fix them for a long period of time, avoiding the unwelcome surprise of a suddenly high bill because, say, natural gas prices have shot up again. Customers also avoid having to figure out how to claim the various incentives and benefits for which they qualify as a renewable energy producer.

But there are some things to look out for. Going solar does not mean going off the grid. A typical roof array will not handle all of a home’s electricity needs since it produces power intermittently. So customers will still get a bill from the utility, though probably a much smaller one. Many contracts also have escalator clauses, with the payments increasing over time, so it is important to determine if your energy costs are likely to go up or down if you were to stick solely with the utility.

Germany Delays Solar Subsidy Cut in Blow to Angela Merkel Germany’s upper house voted to renegotiate a bill backed by Chancellor Angela Merkel that would cut subsidies for solar power after state leaders from her own party said the plan would threaten jobs.

The Neighborhood Visualizer Maps The Resource Intensity Of Your City How much material did it take to build your house? How much energy did it use? This new interactive map tells you exactly how much you and your neighbors are using.

An ocean of troubles (review of The Ocean of Life: The Fate of Man and the Sea, by Callum Roberts) Overfishing, global warming and pollution threaten to transform the ocean—and perhaps life as we know it.

The coming arms race for Arctic oil (excerpt from The Eskimo and the Oil Man, by Bob Reiss) From a national security standpoint, the Russian said, when it comes to the problem of terrorists of the future attacking oil infrastructure, or of fighting in the Mideast interrupting international oil supply, "Arctic is more safe than Persian Gulf, yes?

"But in Arctic we have problems, icebergs. If we stop operations in times of icebergs it is not very good, yes? Another problem is oil spill in ice. Recovery? Practically zero," he said. But he did not look worried.

On the contrary, he was smiling. He had an answer! His eyes lit up and his blunt fingers stumbled over the keyboard, stopped, lifted a pen, sketched.

"We need special technology for Arctic, yes?"

Astounded, I realized he was drawing an underwater nuclear powered tanker, a kind of huge submarine that, he said, would travel beneath the ice, arrive at a sea bottom wellhead, attach itself to piping—as in the sketch—and suck up oil or gas.

Baked Alaska From interviews with Yup’ik hunters and elders in the Alaskan villages of St. Mary’s and Pitka’s Point by researchers from the U.S. Geological Survey, conducted as part of a study of indigenous people’s experiences of climate change. A summary of the USGS findings was published last fall in the journal Human Organization.

Political-Risk Insurer Underused as Climate Talks Fail A World Bank Group agency providing insurance, including political-risk coverage, in developing nations is being underutilized by 30 percent because of a lack of demand as the United Nations fights to protect the climate.

Game Over for the Climate GLOBAL warming isn’t a prediction. It is happening. That is why I was so troubled to read a recent interview with President Obama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves “regardless of what we do.”

If Canada proceeds, and we do nothing, it will be game over for the climate.

Global Warming: An Exclusive Look at James Hansen’s Scary New Math How can NASA physicist and climatologist James E. Hansen, writing in the New York Times today, “say with high confidence” that recent heat waves in Texas and Russia “were not natural events” but actually “caused by human-induced climate change”?

It wasn’t all that long ago that respected MIT atmospheric scientist Kerry Emanuel flatly refuted the notion that you can pinpoint global warming as the cause of an extreme weather event. “It’s statistical nonsense,” he told PBS.

The International Monetary Fund (IMF) recently issued a new working paper called “The Future of Oil: Geology versus Technology” (free PDF), which should be of interest to people who are following “peak oil” issues. This is a research paper that is being published to elicit comments and debate; it does not necessarily represent IMF views or policy.

The paper considers two different approaches for modeling future oil supply:

1. The economic/technological approach, used by the US Energy Information Administration (EIA) and others, and
2. The geological view, used in peak oil forecasts, such as forecasts made by Colin Campbell and forecasts made using Hubbert Linearization.

The analysis in the IMF Working Paper shows that neither approach has worked perfectly, but in recent years, forecasts of oil supply using the geological view have tended to be closer than those using the economic/technological approach. Since neither model works perfectly, the new paper takes a middle ground: it sets up a model of oil supply where the amount of oil produced is influenced by a combination of (1) geological depletion and (2) price levels.

This blended model fits recent production amounts and recent price trends far better than traditional models. The forecasts it gives are concerning though. The new model indicates that (1) oil supply in the future will not rise nearly as rapidly as in the pre-2005 period and (2) oil prices are likely to nearly double in “real” (inflation-adjusted) terms by 2020. The world economy will be in uncharted territory if this happens.

It seems to me that this new model is a real step forward in looking at oil supply and the economy. The model, as it is today, points out a definite problem area (namely, the likelihood of oil high prices, if growth in oil production continues to be constrained below pre-2005 rates of increase). The researchers also raise good questions for further analysis.

At the same time, I am doubtful that the world GDP forecast of the new model is really right–it seems too high. The questions the authors raise point in this direction as well. Below the fold, I discuss the model, its indications, and some shortcomings I see.

The Two Models

Economic /Technological Approach. With the economic/ technological approach, the assumption is made that high oil prices will encourage substitution and/or new oil production. Because of this, high oil prices are not expected to persist. Instead, the most important consideration in determining future oil supply is the level of future demand. The level of future demand, in turn, is primarily driven by anticipated GDP growth, since world GDP growth and world oil production growth tend to be highly correlated.

In effect, models of this type assume that whatever oil supply is needed will be available; they don’t consider the possibility that geological considerations may limit oil supply over the long term. As an example of how well these models have worked for prediction, the paper shows a graph of historical EIA forecasts (Figure 1, below).

Figure 1. Graph showing that oil production forecasts by the US Energy Information Administration have been revised downward, year after year, from paper.

Each year, EIA’s forecasts have been adjusted downward, because actual oil supply growth was lower than forecast.

Models Based on the Geological View. The paper considers forecasts of oil supply such as those of Colin Campbell (shown in ASPO-Ireland Newsletters) and forecasts based on Hubbert Linearization to be models based on the Geological View. The paper observes that forecasts of oil supply based on geological view have tended to be too low, but not by as big a margin as those made using the economic/technological approach. As an example, it gives the following graph of changes in forecasts by Colin Campbell.

Figure 2. Colin Campbell Forecasts of Future Oil Supply, from paper.

A review of the two methods by the IMF group indicates that neither works precisely as hoped, but each has some validity. While oil production did not rise as fast as the economic/technological view would predict, higher oil prices have allowed oil production to stay on more or less a plateau after 2005, rather than declining as predicted by geological methods. The new model in the IMF Working Paper combines indications from both points of view, using an approach that allows them to estimate the relative contribution of geological impacts vs higher prices.

How the Two Methods are Combined

The oil supply equation in the new model is set up so that there are two different ways that the forecast oil supply can change. There is a downward tug from oil depletion at the same time that there is an upward tug from oil prices. It is expected that in the short run, high prices will get producers to utilize spare capacity, and over a longer period (estimated at 4 to 6 years), it will get producers to add new capacity. I will not try to explain all the variables and coefficients, but the blended supply equation is

Figure 3. Oil Supply Equation

In the above equation, qt is the quantity of oil produced in year t and Qt is the cumulative quantity produced in year t, so the ratio qt / Qt produces the familiar downward-sloping line one sees in charts used for Hubbert Linearization. The first two terms to the right of the equal sign are the ones based on the geological approach to depletion. The later terms depend on pt, which is price of oil at the time “t”. Adding the pt terms tends to raise the line at later periods so it does not slope downward as quickly as if depletion were the only factor affecting the relationship.

Growth Rate of GDP

In the model, high oil prices have some impact on GDP, but as we will see in Figure 5, below, not very much. There are two places in modeling GDP where high oil prices come into play. The first is in the Potential Growth Rate of GDP. According to the paper,

The growth rate of potential world GDP is specified as fluctuating around an exogenous long-run trend, with oil price changes making the fluctuations more severe. Oil prices are allowed to have persistent but not permanent effects on the growth rate of GDP. . . The estimated steady state world potential growth rate of potential GDP equals four percent. The average annual growth rate of real oil prices, which is the growth in oil prices at which the model assumes zero effect of oil prices on output growth, is seven percent. The results indicate that an oil price growth that is higher than that historical average has a small but significant negative effect on the growth rate of potential. [emphasis added]

Interesting–the model assumes real oil price growth of 7% per year has no impact growth rate of GDP. Perhaps this is supposed to be picked up by the second place where high oil prices come into forecasting GDP, called Output Gap. This is an excerpt from what the paper says about Output Gap:

Apart from allowing for an effect of higher oil prices on the growth rate of potential output, the model also allows for the possibility that higher oil prices can cause fluctuations in the amount of excess demand in the economy. . . . Similar to the equation for potential, the coefficient estimates show that high oil prices have a small but significant negative effect on excess demand, and that this effect is highly persistent.

Model Output

When all is said and done, what does the IMF model forecast?

Figure 4. Oil Output Forecast with Error Bands, (in gigabarrels per year), from report.

The forecast for future world oil supply, shown in Figure 4 above, is similar to EIA’s most recent forecast of world oil supply (but lower than earlier EIA estimates). Oil supply is expected to rise a 0.9% per year. An alternate tighter oil supply forecast is given as well.

The forecast for world GDP growth (shown in Figure 5 below) is not too much different from standard estimates, either. The point forecast is about four percent per year.

Figure 5. World GDP (in logs) forecast with error bands, with 2011 world GDP normalized to 1.00, from report.

The thing that is different in this analysis is oil prices (in inflation adjusted dollars). Forecast oil prices are expected to be much higher that what the EIA is estimating.

Figure 6. Oil price forecast with error bands (in 2011 Real $) from report.

The report points out that these high oil prices are a real concern. The report says:

The predicted average annual growth rates of oil output are well below the historical forecasts of EIA, but above the forecasts of proponents of the geological view. . . . However, this projected positive trend in oil production comes at a steep cost, because the model finds that it requires a large increase in the real price of oil, which would have to nearly double over the coming decade to maintain an output expansion that is modest in historical terms. Such prices would far exceed even the highest prices seen in 2008, which according to Hamilton (2009) may have played an important roll in driving the world economy into a deep recession.

Need for Enhancements /Areas of Concern Pointed Out by Authors of Paper

The authors raise of the IMF Working Paper raise the following issues:

1. Impact of high oil prices on GDP growth. The expected impact of a continued rise in oil prices on forecast GDP is small, according to the model as constructed. Perhaps the relationship should be non-linear (convex) instead of linear. More generally, what is the importance of the availability of oil inputs for continued overall GDP growth? The report mentions studies showing the close connection between energy growth and GDP growth, such as by Ayers and Warr.

2. Substitutability for oil. What is the substitutability between oil and other factors of production? Is it reasonable to assume that elasticities of substitution will become greater over time? Or is there a possibility that there are limits to the extent of substitutability of machines and labor for energy?

3. Is there a pain barrier? At some point, does the effect of high oil prices on the economy change, and become much worse?

4. Independence of Technology from Fossil Fuel Availability. Perhaps a reduction in fossil fuel availability will negatively affect the availability of future technology improvements since, for example, it takes fossil fuels to make new more efficient cars. This has not been reflected in the model.

5. Smaller Amounts of “Spare” Oil Capacity Available in the Future. The model reflects amounts of OPEC spare oil production capacity available in the past. In the future, less spare production capacity seems likely.

My Comments on the Paper

The IMF is to be commended on putting together this analysis. To me, the big step forward is that questions about the impact of geological depletion of oil on the economy are starting to be addressed. The fact that the paper also points out the level to which oil prices will need to rise, if oil production is to rise at 0.9% a year between now and 2020, is important as well.

Some of the issues I see that aren’t addressed in the paper:

1. Factors underlying world long term growth rate, other than energy. It would seem to me that there are a number of factors which have permitted long term world economic growth, over and above the economic growth enabled by fossil fuels. Some of the following seem to be diminishing in importance, so perhaps the forecast of a 4% world GDP growth rate going forward is too high, apart from oil supply issues:

a. Trend Toward Globalization. The trend toward globalization has allowed greater synergies to occur, and thus has contributed to world GDP growth. The trend toward globalization started over 4,000 years ago, with trade from northwest India to the Mediterranean region (Chew). In recent years, we seem to be approaching a maximum level of world globalization. In fact, higher price of oil has been raised as an issue cutting back on trade of bulky, low valued items (Rubin). Higher cost of oil may also have an adverse impact of commercial airline flights for international companies to oversee their distant operations, because the costs of these flights is now supported by a large number of international tourists, and this international tourist trade may dry up. Thus, the trend toward globalization that has been supporting world GDP growth in the past may not persist, and may even reverse.

b. Growth in Education. Part of what has supported world GDP growth is likely growth in education, since literate workers are better able to use technology. There is evidence that the advanced economies are now plateauing in terms of educational level of new workers, relative to the existing work force. Even less advanced economies, such as China, are showing much higher levels of literacy. (See this post). To the extent that educational levels are reaching a plateau, the “boost” to historical GDP rates that came from this factor can be expected to be lessened.

c. Growth in Debt. GDP growth is enabled by debt growth. Consumers are able to purchase more goods and services, with increased levels of debt; businesses are able to increase their investment in new plants and equipment through more debt; and governments are able to undertake the development of new construction, roads, and other development, through the addition of more debt. But we seem to be reaching limits on debt growth. Theory also suggests that higher levels of debt are enabled by higher economic growth rates (Tverberg). Governments have been aware that increased borrowing can be used to pump up economic growth, but limits are being reached on the amount of debt that can be added. To the extent that debt fails to grow as quickly in the future as it has in the past, this can be expected to have an adverse impact on world GDP growth rates.

d. Quantitative Easing and Extraordinarily Low Interest Rates. An argument can be made that GDP growth of advanced economies in recent years has been held up by quantitative easing and extraordinarily low interest rates. These would seem to be a temporary fixes that cannot be continued long-term. If this is the case, world GDP rates can be expected to be lower in the future, regardless of oil supply growth.

2. Limits on Substitutability of Other Fossil Fuels for Oil. The paper does not address the issue of whether there are limits of substitutability of other fossil fuels for oil. Stationary (as opposed to transportation) uses of oil have been substituting away from oil for years. There are millions of vehicles and other machines that use oil currently in operation. There will be a high cost in replacing these before the end of their normal lifetimes. Also, significant fossil fuels will be required for making vehicles and supporting infrastructure that use another fossil fuel source.

3. Limits on Capital Available for New Investment in Substitutes for Oil, and in New Oil Production. In recent years, we have made heavy use of debt financing for new investment. Government subsidies have also been used. To the extent that debt financing and government subsidies are less available, less investment can be expected in the future.

4. Impact of High Oil Prices on Diverse Parts of the Economy, Not Reflected in the Model. For example, prices of homes may be affected by high oil prices. People with less discretionary income are less likely to “trade up” to a more expensive homes, so high oil prices seem to be one of the reasons for the decline in home prices (Tverberg). Lower home prices affect ability of homeowners to borrow against the value of their homes for new purchases, so affect GDP, apart from oil price’s direct impact on the number of new homes built.

5. Which comes first: Oil Growth or Economic Growth? The assumption in the model is that GDP growth drives oil growth. While this is true, it is to some extent a “chicken” and “egg” situation. Perhaps the availability of inexpensive oil and other fossil fuels is one of the main drivers of economic growth (in addition to the other drivers I mention in the subparts of Item 1 above). Perhaps the cycle is started by the availability of cheap fossil fuels for industrial use and continued by the increased demand to which this growth gives rise.

* * *

I appreciate the work that has been done by the IMF in putting together this model and look forward to seeing further enhancements to the model. The work that has been done and the questions that are being raised are important ones.

I expect that commenters to this post will be able to point out other plusses and minuses of the model. The report itself is very interesting. Again, it can be found at The Future of Oil: Geology versus Technology.

This article originally appeared on Our Finite World.

I will be traveling somewhat extensively over the next few days, and therefore crave your indulgence in that there will be no new posts until after the 21st of May.

I should then be able to rejoin the tale of the Saudi oil production, projections of our future energy supplies and the other topics which you have, from time to time, found of interest.

Best Wishes in the meantime

Dave

NEW YORK--(BUSINESS WIRE)--The ExxonMobil Foundation and Cherie Blair Foundation for Women today released new research demonstrating how mobile phones can help women entrepreneurs develop and grow their businesses.

Smart-Meter Defiance Slows $29 Billion U.S. Grid Upgrade A growing consumer backlash against new wireless digital technology for measuring power usage is slowing U.S. utilities’ $29 billion effort to upgrade their networks.

States including California, Maine and Vermont have responded to customer concerns about higher bills and safety by offering them the option of keeping their conventional devices for an extra charge.

Crude Oil Falls for Sixth Day in Longest Drop Since 2010 Oil fell for a sixth day in New York, the longest run of declines in almost two years, after crude stockpiles increased in the U.S., the world’s largest consumer of the commodity.

Futures slid as much as 1 percent after dropping 8.6 percent in the past five days. U.S. inventories climbed 7.8 million barrels last week to 378 million, the highest level since August 1990, the American Petroleum Institute said yesterday. A government report today may show supplies rose 2 million barrels, according to a Bloomberg News survey. Crude is poised to rebound as global refiners increase purchases, Societe Generale SA said in a report.

Saudi says producers pumping enough to deal with Iran sanctions TOKYO (Reuters) - Saudi Oil Minister Ali al-Naimi said on Wednesday oil markets would remain well supplied even after fresh international sanctions against Iran take effect, as global crude oversupply is already as much as 1.5 million barrels per day (bpd).

Government slashes forecast for summer gas prices Gasoline prices likely won't set any records this summer, thanks to a recent drop in the price of oil.

The government Tuesday slashed its forecast for average gas prices to $3.79 per gallon for the summer driving season. That's down from an initial estimate of $3.95 and below 2008's record average of $3.80.

The Energy Information Administration's revised forecast is encouraging news for the economy. Some economists blame high pump prices for so-so consumer spending this year. They were also seen as a factor in the loss of 35,000 retail jobs in February and March.

China Cuts Retail Fuel Prices for First Time in Seven Months China will cut retail gasoline and diesel prices tomorrow for the first time since October after international crude costs fell to a government threshold for adjusting fuel rates.

Turning natural gas into diesel fuel NEW YORK (CNNMoney) -- Near-record low natural gas prices have hurt the industry, but a technology that can turn cheap gas into more profitable diesel could keep demand high and mitigate the impact of falling costs.

Christine Todd Whitman: It's dangerous to depend on natural gas Today's natural gas market is still vulnerable. We should take advantage of our domestic energy resources, including nuclear energy.

Shale Gas: The View from Russia The official shale gas story goes something like this: recent technological breakthroughs by US energy companies have made it possible to tap an abundant but previously inaccessible source of clean, environmentally friendly natural gas. This has enabled the US to become the world leader in natural gas production, overtaking Russia, and getting ready to end of Russia's gas monopoly in Europe. Moreover, this new shale gas is found in many parts of the world, and will, in due course, enable the majority of the world's countries to achieve independence from traditional gas producers. Consequently, the ability of those countries with the largest natural gas reserves—Russia and Iran—to control the market for natural gas will be reduced, along with their overall geopolitical influence.

If this were the case, then we should expect the Kremlin, along with Gazprom, to be quaking in their boots. But are they? Here is what Gazprom's chairman, Alexei Miller, recently told Süddeutsche Zeitung: “Shale gas is a well-organized global PR-campaign. There are many of them: global cooling, biofuels.” He pointed out that the technology for producing gas from shale is many decades old, and suggested the US turned to it out of desperation. He dismissed it as an energy alternative for Europe. Is this just the other's sides propaganda, or could Miller be simply stating the obvious? Let's explore. I will base my exploration on Russian sources, which is why all the numbers are in metric units. If you want to convert to Imperial, 1 m3 = 35 cubic feet, 1 km2 = .38 square miles, 1 tonne = 1.1 short tons).

More LNG imports for Japan Japan's suspension of the use of nuclear power will lead to a further increase in imports of liquefied natural gas (LNG), cementing the country's position as the world's biggest importer of the fuel.

Japan to take control of Fukushima operator TEPCO Japan's government will take a controlling stake in the operator of the Fukushima nuclear plant under a plan ministers approved Wednesday, effectively nationalising one of the world's largest utilities.

Tokyo will inject one trillion yen (USD$12 billion) as part of a 10-year restructuring aimed at preventing the vast regional power monopoly from going bankrupt.

Lessons for Japan from Chernobyl Two nations, separated by tradition and culture, had been thrown together by disasters that changed the way the world thought about atomic energy.

Japan was a donor to Ukraine for the construction of a sarcophagus to cover the damaged Chernobyl reactor building. In the past year, the aid has flowed in the other direction, with Japanese nuclear officials visiting Chernobyl headquarters for guidance and with an agreement signed last month to cooperate on post-disaster response.

Exclusive: Chesapeake CEO arranged new $450 million loan from financier (Reuters) - In the weeks before Chesapeake Energy CEO Aubrey McClendon was stripped of his chairmanship over his personal financial dealings, he arranged an additional $450 million loan from a longtime backer, according to a person familiar with the transaction.

Keystone Pipeline Divide Shows U.S. Highway Deal Elusive Congressional negotiators clashed over TransCanada Corp.’s Keystone XL oil pipeline, underscoring the U.S. political challenge in reaching a multiyear surface transportation plan for the first time since 2005.

Statoil looks offshore in new tack for concession MONGSTAD, NORWAY // Statoil, the Norwegian oil and gas operator, is shifting from its campaign to secure onshore rights in Abu Dhabi to an offshore bid.

Azerbaijan's natural gas pipeline to wealth When it comes to the fate of the 50 billion cubic metres of natural gas that Azerbaijan hopes eventually to pump every year, the country is keeping all suitors on their toes.

Russia warns Turkey over Cypriot gas plans On May 3, Moscow criticized Turkey's plans to explore natural gas deposits around the divided island of Cyprus, under the protection of Turkish naval and air power. Russian Foreign Affairs Ministry's chief spokesman, Aleksandr Lukashevich, cautioned Turkey that its actions "may exacerbate the situation on the territory of Cyprus".

First Nations set to protest Enbridge shareholder meeting over pipeline TORONTO — West Coast First Nations are planning to protest today at Enbridge’s annual meeting of shareholders in Toronto.

The Yinka Dene Alliance and supporters oppose a proposed pipeline that would cross their territory.

An Old Texas Tale Retold: the Farmer vs. the Oil Company But as the Crawfords discovered, when voluntary compensation agreements are not reached, Texas law allows certain private pipeline companies to use the right of eminent domain to force landowners to let pipelines through. This was true even for TransCanada, which has yet to get State Department permission to bring the Keystone XL across the Alberta border.

The Crawfords’ condemnation hearing happened in front of a district judge. They were not invited to that hearing — landowners in Texas do not get to go to the actual condemnation hearing. They are invited only to the next step, after the condemnation, when a three-person panel of county landowners decides on a value for the property being condemned.

EU Parliament Committee calls for diversification of energy suppliers BRUSSELS (KUNA) -- The Energy Committee of the European Parliament has issued a report calling for opening up to new foreign energy suppliers and for lesser dependance on Russia for energy supplies to Europe.

The Committee in a statement Wednesday said diversification of suppliers, routes and sources is deemed necessary in order to secure EU's energy supply.

Middle Eastern sea routes vital to future oil and gas supply As a result of the escalation of events in Syria, Iran's oil production has begun to be damaged. Additionally, the European Union voted to stop buying Iranian oil from this summer, but the Iranians did not wait and cut off oil sales early. From its position as the global "swing producer", Saudi Arabia has recently reiterated its pledge to keep the oil market well supplied if sanctions hit Iran. However, any military sanction on Iran is likely to cause a host of serious events, which may include closure of the Strait of Hormuz.

Speak to any oil professionals who work on shipping oil through the strait and they will tell you of its importance to the industry. About 18 million barrels of oil pass through the strait daily. An alternative route could be the under-construction Fujairah Pipeline, which on completion should be able to deliver most of Abu Dhabi's oil exports to the Indian Ocean.

China urges Philippines not to further damage bilateral ties BEIJING (Xinhua) -- China on Wednesday urged the Philippines not to further damage bilateral relations, and expressed the country's willingness to jointly explore gas resources in waters off the coast of the Nansha Islands in the South China Sea.

Oil-Rich Angola’s Ruling Party Split Over Succession Angola’s ruling party is gripped by a struggle over who should succeed President Jose Eduardo dos Santos, amid public rallies calling for the leader of Africa’s second-largest crude producer to quit after 32 years in power.

India tells US that Iran an important oil source India said Tuesday it shared the United States' goal of preventing Iran from building a nuclear weapon, but insisted the Islamic republic remained an "important source of oil".

Visiting US Secretary of State Hillary Clinton has urged India to reduce its imports of Iranian oil, while a new US law will next month slap sanctions on nations that buy oil from Tehran.

Britain seeks delay to EU's Iran ship insurance ban LONDON/BRUSSELS (Reuters) - Britain is seeking to persuade fellow European Union members to postpone by up to six months a ban on providing insurance for tankers carrying Iranian oil, arguing that it could lead to a damaging spike in oil prices, European diplomats said.

A European Union ban on importing Iranian oil, which takes effect on July 1, will also prevent EU insurers and reinsurers from covering tankers carrying its crude anywhere in the world.

Indian corporation intends to import oil from Azerbaijan Azerbaijan, Baku / Trend, A.Badalova / The Hindustan Petroleum Corporation Limited (HPCL) board will consider signing crude import agreement with the State Oil Company of Azerbaijan Republic (SOCAR), K Murali, Director Refineries, Hindustan Petroleum Corporation Ltd., told The Economic Times.

Iran refutes claims on pushing Afghan Senate to scrap pact with US Iran's envoy to Afghanistan has dismissed recent claims by some Afghan lawmakers and media outlets that accused Iran of seeking to sway the Afghan Senate in an attempt to prevent the approval of the country's recent strategic cooperation pact with the US.

Shooting to Kill Pirates Risks Blackwater Moment Fear of pirate attacks is creating more violent and chaotic seas, where some overzealous or untrained guards are shooting indiscriminately, killing pirates and sometimes innocent fishermen before verifying the threat, according to more than two dozen interviews with lawyers, ship owner groups, insurance underwriters and maritime security companies.

Peak Oil to Keep Prices High, Commodity Report by Leading Financial Newsletter Profit Confidential Michael Lombardi, lead contributor to Profit Confidential, reports that oil wells supplying the world with oil are declining at a rate of three percent to five percent per year. According to Lombardi, even if there is no economic growth in the world, roughly 3.6 million barrels a day more of oil need to be found to replace the wells that are running dry.

But now a remarkable study says a strong chance exists that the worldwide demand for oil will peak by 2020 – and that this will most likely occur before any constraints on supply begin to make themselves felt. This startling conclusion has been reached after careful examination of the most recent academic and professional thinking on population, technology and public policy trends. The study was led by Ricardo Strategic Consulting in collaboration with Kevin J Lindemer and with industry-wide participation.

Jeff Rubin: Without growth, there's only one ending to euro debt crisis If a strong-enough economic recovery were to take hold, Europe could grow its way out of its huge fiscal deficits and save the monetary union from collapse. That’s a good plan in theory, but the complication facing Europe, and indeed the rest of the world, is that it takes a lot of energy to fuel robust economic growth. What’s more, the most important source of energy for the global economy is oil.

Commuting Drives Up Weight, Blood Pressure People who drive long distances to work are more likely to be overweight than their non-commuting counterparts, according to a new study that links urban sprawl with expanding waistlines.

Report: Fisker Karma blamed for Texas home fire According to the report, the Karma car, which was not plugged in, caught fire less than three minutes after being driven into the garage and that the battery remains intact. Damage to the battery was blamed for Chevrolet Volt fires in government testing last year. The Karma, like the Volt, is an extended range plug-in car that also has a gasoline engine.

Solar Is Europe’s Most-Installed Power Source, Lobby Says Solar power became the most-installed energy source in Europe last year for the first time as subsidies drove investment to records, the European Photovoltaic Industry Association said.

Soy-Crop Bust Spurs China to Drain U.S. Bins U.S. soybean stockpiles are poised to drop to the lowest relative to consumption since at least 1965 after the worst drought in five decades decimated crops across South America, driving China to buy more from Midwest farmers.

Is healthy weight impossible for many Americans? "People have heard the advice to eat less and move more for years, and during that time a large number of Americans have become obese," committee member Shiriki Kumanyika of the University of Pennsylvania School of Medicine told Reuters. "That advice will never be out of date. But when you see the increase in obesity you ask, what changed? And the answer is, the environment. The average person cannot maintain a healthy weight in this obesity-promoting environment."

An Effort to Bury a Throwaway Culture One Repair at a Time AMSTERDAM — An unemployed man, a retired pharmacist and an upholsterer took their stations, behind tables covered in red gingham. Screwdrivers and sewing machines stood at the ready. Coffee, tea and cookies circulated. Hilij Held, a neighbor, wheeled in a zebra-striped suitcase and extracted a well-used iron. “It doesn’t work anymore,” she said. “No steam.”

Ms. Held had come to the right place. At Amsterdam’s first Repair Cafe, an event originally held in a theater’s foyer, then in a rented room in a former hotel and now in a community center a couple of times a month, people can bring in whatever they want to have repaired, at no cost, by volunteers who just like to fix things.

Dead Dolphins and Birds Are Causing Alarm in Peru But even three months after officials began testing the dolphins, the government has not released definitive results, and there is growing suspicion among the public and scientists that there might be more to the story. Some argue that offshore oil exploration could be disturbing wildlife, for example, and others fear that biotoxins or pesticides might be working their way up the food chain.

E.P.A. Chemist Who Warned of Ground Zero Dust Is Reinstated A senior Environmental Protection Agency chemist who argued that she was removed from her job in retaliation for accusing the agency of underestimating the toxicity of dust at ground zero has been reinstated with back pay by an administrative board.

After Kyoto, a new economics? In the results of a survey out today, 800 sustainability experts from around the world have a clear message for governments: make greenhouse gases more expensive.

Diageo to end funding of Heartland Institute after climate change outburst Diageo, one of the world's largest drinks companies, has announced it will no longer fund the Heartland Institute, a rightwing US thinktank which briefly ran a billboard campaign this week comparing people concerned about climate change to mass murderers and terrorists such as Osama bin Laden, Charles Manson and Ted Kaczynski.

An Inconvenient Lawsuit: Teenagers Take Global Warming to the Courts Alec Loorz turns 18 at the end of this month. While finishing high school and playing Ultimate Frisbee on weekends, he's also suing the federal government in U.S. District Court in Washington, D.C.

The Ventura, California, teen and four other juvenile plaintiffs want government officials to do more to prevent the risks of climate change -- the dangerous storms, heat waves, rising sea levels, and food-supply disruptions that scientists warn will threaten their generation absent a major turnabout in global energy policy. Specifically, the students are demanding that the U.S. government start reducing national emissions of carbon dioxide by at least six percent per year beginning in 2013.

No regulatory framework in place to curb greenhouse gas emissions The federal government has promised to cut greenhouse gas emissions significantly by 2020, but it has not put the regulatory framework in place to achieve that goal, environmental groups and economists say, responding to the report of Canada's environment commissioner.

So far, only two regulations are in place for the transportation sector, while regulations for the electricity sector aren't expected to take effect until 2015 and no regulations are in place for oil and gas.

Alberta fires back at proposed EU fuel rules The Alberta government has gone on the offensive against Europe’s proposed fuel-quality directive with a new study that shows the oil sands production is only slightly more greenhouse-gas intensive than crudes already used in Europe.

Alberta and the federal government have lobbied aggressively against the European low-carbon fuel proposal, saying it would discriminate against Canadian-based crude producers with an unscientific approach to reducing greenhouse gases (GHG).

'We have seen the enemy': Bangladesh's war against climate change Devastating cyclones, floods and ruined crops have made Bangladesh 'the world's most aware society on climate change.'

Vietnam's climate woes ignite national strategy HANOI - Vietnam, hailed as a development success story for lifting millions out of poverty and staying on track to meet all its Millennium Development Goals (MDGs) by 2015, is seeing its future progress severely threatened by the impact of global climate change.

Unprecedented climate-related catastrophes in recent years have turned government and citizen attention onto the pressing need for proactive climate change policies, although the speed of global warming is beyond Vietnam's control and depends more on major industrial nations' future greenhouse gas emission reductions agreed within the United Nations Framework Convention on Climate Change.

New Zealand: National sea level rise planning standard dropped The Government is dropping a proposal that would require councils to meet a national standard when planning for sea level rise.

The standard was meant to streamline planning and provide reliable guidance to local authorities about their future environment.

Rising temperature to hit wheat production in India, says report The annual mean temperature in India is expected to rise by 3.5-4.3 degrees Celsius by 2098, badly impacting production of wheat - a major grain crop - and increasing malaria outbreak, according to India's submission to the United Nations (UN) released here Wednesday.

In this post I present an updated view on Norwegian crude oil exploration, sanctioned developments, discoveries, production, reserves and what these now suggest for the future of Norwegian crude oil production.

The content for this post was originally published in Norwegian here and here.


Figure 01: The chart above shows a forecast for crude oil production from the 21 discoveries presently sanctioned for development on the Norwegian Continental Shelf (NCS) and which are scheduled to start flowing from 2012 to 2016.
In Figure 5 these and a forecast for Johan Sverdrup are shown as parts of a forecast of crude oil production from NCS. Click on all charts to enlarge and to open in a new window.

After oil prices moved upwards and settled at a higher level starting around 2005, a new wave of exploration resulted in sanctions for developments of several new and known discoveries that previously had been on hold due to lack of profitability.

These new developments are expected to add up to 350 kb/d of additional oil production, reaching a peak in 2016. This is by itself impressive given the location of the discoveries (offshore, water depth), their size and the total efforts required to bring these to fruition. These 21 developments have been estimated to hold total recoverable reserves of 1 Gb crude oil, 140 Gcm (Gcm = Bcm: Billion cubic meters) of natural gas, around 23 Mb condensates and around 164 Mb NGLs.

These 21 new developments are "small fields". What characterize “small fields” are rapid buildup and a short plateau followed by aggressive (high) decline rates. Total investments for these 21 developments are now estimated to be around 225 billion NOK (2011) or US$40 billion. Most of the developments shown in Figure 1 have been estimated to be profitable for crude oil prices ranging from US$40 - US$90/bbl.

HISTORY OF NORWEGIAN CRUDE OIL DISCOVERIES

Figure 02: The chart shows the history and status of total annual discoveries (stacked columns) of crude oil from the start of oil exploration on the NCS in the mid 60’s until the end of 2011.
The light green columns show what has been sold and delivered. Dark green shows estimated total remaining recoverable reserves. The yellow columns show total discoveries that have not been sanctioned as of end 2011.
Furthermore, the chart shows annual extraction (thick black line) of crude oil since oil production started back in 1970. In the chart is also included a table identifying the year of discovery and name for all fields with more than 1 billion barrels (Gb) of recoverable crude oil.

Figure 2 shows that:

• The bulk of discoveries on NCS was made in the early years of exploration (see also Figure 3 where total discoveries are sorted by decade) and these presently heavily depleted fields still contribute a major part of total Norwegian crude oil production (see also Figures 6 and 7).
• 1979 stands out as the year with most total crude oil discoveries on NCS including amongst others: Oseberg, Troll and Snorre.
• Until 1987 more oil was annually discovered than what was extracted. Then, with the exceptions of 1991, 1992 and 2010 (Johan Sverdrup) more crude oil was extracted than was discovered. The depletion of the oil reserves is also illustrated in Figures 4 and 5.
• The number of and total amounts of discovered oil grew after oil prices moved above US$50/bbl in 2005. This suggests that oil companies have had several prospects in the drawer that became economically attractive to explore with the increase in oil prices and the income growth that allowed for drilling them.

The discovery in 2010 of Johan Sverdrup (formerly Aldous Major South/Avaldsnes), which saw its reserves number soar following an appraisal well in the fall of 2011, is very much an "outlier" relative to the size of the discoveries in the last two decades. Figure 2 also shows that new discoveries that are found to be profitable are fast tracked for production development.

The growth in oil prices in recent years has resulted in a positive economic climate for exploration, allowing more prospects to be drilled and thus establishing more reliable estimates of recoverable volumes from these discoveries.

Based upon data in the public domain from the operators and the authorities (NPD), it has been estimated that the recent discovery of Skrugard will be profitable at an oil price around US$60/bbl (340 NOK/bbl) at a discount rate of 7%. Skrugard is now estimated to hold 250 - 280 Mb of recoverable oil and the field is located at 72 degrees North at a water depth of 390 meters (1,300 feet) and 200 kilometers (125 miles) offshore.
One way to look at these recent developments is that Norway in general is about to run out of discoveries that are profitable in the US$40 – US$60/bbl range.
Could a new wave of exploration and developments be set off at an even higher oil price, say US$150/bbl?

Food for thought is that future discoveries and developments are likely to be smaller than those that set off the past and present waves. If new discoveries are smaller, we are likely to need both a higher price and a larger number of field developments to combat depletion and decline from a growing number of ageing fields.

If this is viewed together with the extraction costs for oil from shale (tight oil) mainly in the U.S. and oil sands in Canada which both require an oil price in the range of US$60 - US$90/bbl, this very much documents that the price for the marginal barrel has now moved higher.

There is a catch here. Buyers of oil do not care about the development costs (or required breakeven prices). Instead the market sets the price as primarily based on the supply/demand balance. If the crude oil price were to temporarily retreat this would threaten the economics of some developments and also defer investments in new capacities.

Figure 03: The figure shows the discovery of crude oil for each past decade of oil operations in Norway. The light green bars show what is sold and delivered. Dark green is estimated total remaining reserves. The yellow bars show discoveries that have not been sanctioned as of the end of 2011.

The figure shows that most of Norwegian crude oil was discovered in the seventies and that total discoveries slowed until the discovery of Johan Sverdrup, Skrugard and Havis, and there are still some years left of this decade.

Figure 04: The figure shows the history and total discoveries of crude oil by year (stacked columns) from oil exploration started on NCS and as of year-end 2011. The figure is also referred to as a "creaming curve". The light green bars shows what has been sold and delivered. Dark green is the total remaining reserves. The yellow bars show the total of discoveries that presently are not sanctioned.

The discoveries from the 70s presently yield more than 28% of total Norwegian oil production, (refer also to Figures 6 and 7), and these will continue to make a significant contribution to the total Norwegian oil production.

Figure 4 shows that discovered Norwegian oil reserves are now around 75% depleted.
Figures 4 and 5 below should be useful for understanding the time horizon and level of future Norwegian crude oil production.

ACTUAL AND A FORECAST OF NORWEGIAN CRUDE OIL PRODUCTION

Figure 05: The chart shows actual crude oil production by field from the NCS for the years 1970 to 2011. Furthermore, I have prepared a forecast until 2040 based upon the reserve and resource data from NPD as of end 2011. The forecast is based upon each field's R/P ratio, projected decline rates for each field, estimated remaining recoverable reserves, sanctioned developments (those shown in Figure 1) and NPD estimates of recoverable reserves for recent discoveries (such as Johan Sverdrup, Skrugard, Havis etc.). The forecast does not incorporate effects from fields that may be closed down as these become unprofitable. The forecast is subject to changes from revisions in estimates of recoverable reserves in producing fields and discoveries, new commercial discoveries in mature areas, the Barents Sea and later Lofoten/Vesterålen.

The parameter that will most influence future Norwegian crude oil production is and will continue to be the oil price. Figure 5 also illustrates that the biggest discoveries are made early, rapidly put into production. Then, with time, as prices rise to a high enough level, the smaller discoveries are developed. Figure 5 shows that the decline in Norwegian crude oil production continues to defy the strong price growth in recent years. The growth in crude oil prices has helped offset the fall in Norwegian crude oil production and stimulated increased exploration activity and made some past discoveries profitable.

In discussions about the time horizon and levels for the Norwegian crude oil production there seems to be a deficit of realistic and unbiased understandings about future production levels relative to what is now publicly known about estimates of remaining recoverable reserves, discoveries and yet to find.

Norwegian crude oil production peaked in 2001 and as of 2012 it has declined about 50% from the peak. This fact has been overshadowed by the oil price growth in recent years. This increase in prices has more than compensated for the decline in the amount of crude sold and delivered (and natural gas volumes), and has helped to maintain and grow annual Norwegian gross income.

Norwegian Petroleum Directorate's (NPD) has forecast that crude oil production for 2012 will decline to 1.61 Mb/d from 1.68 Mb/d in 2011. Norway also produced 0.08 Mb/d of condensates and 0.28 Mb/d of NGLs in 2011. Norwegian domestic oil consumption is now around 0.2 Mb/d and present expectations are that Norway will continue to be a net exporter of crude oil, albeit at a diminishing rate, for the next 25 to 30 years.

OIL PRICE AND GROSS INCOME

A production level that only meets Norway’s domestic needs will not leave anything for exports. Norway presently has an annual trade deficit, excluding income from the petroleum sector, of around US$20 – US$25 billion.

To run a balanced trade and cover domestic consumption Norway needs to produce 0.7 – 0.8 Mb/d at current prices. This level is presently expected to be reached within 15 years.

(Admittedly, income from Norwegian natural gas sales needs to be included, but in 15 years these sales are also forecast to have substantially declined.)

Figure 06: The figure shows the Norwegian crude oil production divided into discoveries by decade. The figure also shows the development of the annual price of oil.

The figure above illustrates the effects from discoveries by decade and that the major discoveries in a new oil province are made early.

The chart could also leave the impression that oil prices really took off as Norwegian oil production started to decline.

Figure 07: The figure shows Norwegian crude oil production divided into discoveries by decade. The figure also shows the development of the annual gross value of the Norwegian crude oil production in U.S. dollars.

As the oil price moved strongly upwards, it also pulled gross incomes from crude oil sales up. What is often overlooked with this increasing revenue is the decline in volume. The price increase for oil in 1979 gave a boost to the gross income from the Norwegian crude oil sales. Later, the increase in gross income was driven primarily by volume. A tighter global supply/demand balance in 2004 ushered in a sharp rise in prices of oil which more than compensated for the decline in oil production and thus sent the gross income from the Norwegian crude oil production to new heights.

Average crude oil price was around US$97/bbl in 2008 and in 2011 US$111/bbl. In 2008 the Norwegian crude oil production was 2.11 Mb/d and by 2011 it had declined to 1.68 Mb/d.

Predicting near term developments of the oil price with any precision is difficult. The growth in total debt in the last three decades caused aggregate demand (also for oil) to be pulled forward, and debt growth also provided price support. A wide spread deleveraging and introduction of austerity measures, which now seems to be in its infancy, could be expected to affect oil demand in the near term and perhaps reduce oil prices.

What Is the Limiting Factor? In yesteryear’s empty world capital was the limiting factor in economic growth. But we now live in a full world.

Consider: What limits the annual fish catch — fishing boats (capital) or remaining fish in the sea (natural resources)? Clearly the latter. What limits barrels of crude oil extracted — drilling rigs and pumps (capital), or remaining accessible deposits of petroleum — or capacity of the atmosphere to absorb the CO2 from burning petroleum (both natural resources)? What limits production of cut timber — number of chain saws and lumber mills, or standing forests and their rate of growth? What limits irrigated agriculture — pumps and sprinklers, or aquifer recharge rates and river flow volumes? That should be enough to at least suggest that we live in a natural resource-constrained world, not a capital-constrained world.

Oil Falls to Four-Month Low on European Votes, U.S. Jobs Oil fell to the lowest level in more than four months after European election results fed speculation that austerity efforts will be derailed and weaker-than-expected jobs data underscored concern the U.S. economy may falter.

Futures pared losses after slumping as much as 3.2 percent to the lowest intraday price since Dec. 20. The euro declined to a three-month low after France elected Socialist Francois Hollande as president and Greek voters backed anti-bailout parties. Crude extended a 4 percent drop on May 4 after U.S. payrolls rose by the least in six months.

Survey: U.S. gasoline prices drop 7 cents "The price decline comes from lower crude oil prices," said publisher Trilby Lundberg.

That's good news for consumers, but it comes from a negative place, she said.

"Oil prices themselves are down because the oil market sees economic weakness in Europe and the United States, which is a negative for oil demand," said Lundberg.

OPEC output target rise not yet on agenda: Algeria ALGIERS (Reuters) - Raising the output target set by the Organization of the Petroleum Exporting Countries is not on OPEC's agenda for now but probably will be, Algerian Energy and Mines Minister Youcef Yousfi said on Sunday.

Asked about the prospect of increasing the target, Yousfi told state radio: "For the moment that is not the object of our discussions, but probably that will come at the OPEC level."

MidEast oil supply reliable - Qatar energy min Qatar's energy minister said on Monday oil production in the Middle East remains reliable and there is no shortage of supply in the market.

"Supply from the Middle East has been reliable despite perceived disturbances in the region... there is no shortage of oil," Mohammed Saleh al-Sada said during a Middle East Petroleum & Gas Conference in Bahrain, organised by Conference Connection.

South Korea says UAE, Saudi promise more oil (Reuters) - The United Arab Emirates and Saudi Arabia have promised to fill any gap in South Korea's oil imports if supplies from Iran are disrupted, South Korean Minister of Strategy and Finance Bahk Jae-wan said on Monday.

"So far the UAE and Saudi Arabia have promised to provide more oil than now if things get worse. They have promised to fill the gap," he told reporters on the sidelines of a bilateral economic meeting with UAE officials in the capital Abu Dhabi. He said no oil volumes had been specified so far.

Effects of Arab awakening on the global oil industry The MENA region has massive hydrocarbon resources (some 60 percent of the world's proven oil reserves and 45 percent of global gas reserves). Most of those resources are concentrated in the Gulf Cooperation Council (GCC) region, which is home to approximately 40 percent of the world's proven oil reserves and 25 percent of natural gas reserves. So, the MENA region, and the GCC region in particular, is of great importance to the global energy market and to the economic stability and prosperity of the world. The current political unrest has already been reflected by a surge in oil prices, but the world hopes that this will be the only short-term effect of the transitional phase that the region is currently experiencing.

Fuel-Oil Shipments to Singapore Rebound in June; 16 Ships Booked Fuel-oil shipments to Singapore rebounded from May, with 16 tankers carrying 3.38 million metric tons scheduled to arrive in Singapore from outside Asia in June, vessel-charter data compiled by Bloomberg show.

The tankers, including 10 very large crude carriers, have been booked to collect the fuel for ships and power generators from ports in Europe and the Caribbean, according to data from shipbrokers including Poten & Partners Inc. in New York. The cargo volume compares with 2.68 million tons reported for June arrival as of last week.

Record Gas Use by U.S. Utilities Fails to Drive Up Price U.S. utilities led by Southern Co. (SO) are burning a record amount of natural gas for generating electricity without triggering a forecasted boost to the fuel’s price from near 10-year lows.

The power companies used 34 percent more gas in February than a year earlier, Energy Department data show. Even Atlanta- based Southern, historically one of the largest U.S. coal-plant operators, is on pace to consume more of the cleaner-burning fuel than coal in 2012 for the first time in its 100-year history. Utilities are the nation’s biggest gas consumers.

Hedge Funds Bet Wrong Before Biggest Slump Since October Hedge funds raised bets on higher commodity prices for the first time in six weeks, just before the biggest three-day slump since October as U.S. jobs data fell short of expectations and European manufacturing contracted.

For China, Oil Helps Lift Other Exports BEIJING — A $1 trillion oil-fueled trade windfall could not be better timed to help companies move into higher-value products and rebalance the economy in China, the world’s biggest exporter.

Fast-growing countries producing oil and other commodities are taking advantage of the windfall from the recent gains in prices for those commodities, buying about half of the $2 trillion worth of goods sold by China overseas.

Iran government denies plans to treble gasoline price DUBAI (Reuters) - Iran's government denied on Monday it would treble the price of gasoline as part of subsidy reforms that have been commended by the IMF but caused anger at home among a population struggling under Western trade sanctions.

In a statement carried by the Fars news agency, the office of President Mahmoud Ahmadinejad said talk of a threefold price increase - broadcast on Friday by Ahmadinejad's bitter critic, the speaker of parliament - was "entirely false".

Clinton presses India to cut oil imports from Iran U.S. Secretary of State Hillary Rodham Clinton urged energy-starved India on Monday to reduce its Iranian oil imports to keep up pressure on the Islamic republic to come clean about its nuclear program.

In meetings in the capital, New Delhi, Ms. Clinton was expected to push for India to find alternative sources of oil on the international market.

Iran's strategic relevance for India United States Secretary of State Hillary Clinton's statement in Kolkata urging India to curtail its oil import from Iran signifies increasing pressure that India is likely to face on its dealings with Iran from the US in an election year.

It is not to undermine the threat to global peace that might emanate, should Iran decide to go in for nuclear weapons, but the US also needs to understand India's strategic compulsion and its critical dependence on Iran for its sustained growth and development. India and Iran have had long civilizational links, but that did not prevent Iran from providing material support to Pakistan, in its wars with India, both in 1965 and 1971.

India Said to Plan 20% Cut in Iran Oil Imports This Fiscal Year India plans to cut its oil imports from Iran by 20 percent this financial year, four Indian government and refinery officials with direct knowledge of the matter said.

Asia’s third-biggest importer of crude will curtail its purchases from the Persian Gulf nation to 14 million tons from 17.5 million tons in the 12 months ending March 31, the officials said. They asked not to be identified because they aren’t authorized to speak on the subject.

India Said to Deny Local Branch for Iran Bank on U.S. Pressure India barred an Iranian bank from opening a branch in the country because of U.S. pressure, making it harder for the Persian Gulf state to settle oil trades with its second-biggest crude customer, two people with knowledge of the matter said.

Polls open in Syria amid heavy security, scattered violence (CNN) -- Polls opened Monday in Syria, with more than 7,000 candidates vying for 250 seats in parliament amid mounting international pressure on President Bashar al-Assad to step aside.

The opposition urged Syrians to boycott the elections, saying a vote for any of the candidates amounted to a vote for al-Assad.

Airstrike in Yemen kills al-Qaeda leader on FBI wanted list SANAA, Yemen (AP) – An airstrike Sunday killed a top al-Qaeda leader on the FBI's most wanted list for his role in the 2000 bombing of the USS Cole warship, Yemeni officials said. The drone attack was carried out by the CIA, U.S. officials said.

Aquino Open to China Sea Oil Deal Separate From Territory Spat Philippine President Benigno Aquino said he’s open to an agreement with China that would allow companies to exploit oil and gas resources while the governments separately resolve South China Sea border disputes.

China's 1st deep-water rig to drill in S China Sea The first deep-water drilling rig developed in China will be put into service in the South China Sea on Wednesday, the country's largest offshore oil producer said Monday.

Argentina Taps Ex-Schlumberger Executive Galuccio to Oversee YPF Argentina President Cristina Fernandez de Kirchner named Miguel Galuccio, a former Schlumberger Ltd. executive, to head YPF SA after Congress approved the government’s seizure of its biggest energy company.

Kuwait's Gulf Oil wants 350,000 bpd by 2014-15 - KUNA Kuwait Gulf Oil Company (KGOC) is aiming to increase its oil output to 350,000 bpd by 2014-2015 from 250,000 bpd now, the company's chairman told state-run news agency KUNA.

KGOC, a unit of Kuwait Petroleum Corp (KPC), is also aiming to boost the gas it extracts from oil fields to 500m cubic feet by the same date, Hashem al-Rifaee said.

Libya’s NOC Says Arabian Gulf Oil Co. Hasn’t Cut Crude Output Libya’s Arabian Gulf Oil Co. has not reduced crude production, its parent National Oil Corp. said on its website, refuting an earlier statement from the company known also as Agoco.

Aramco to increase trading in oil products (Reuters) - Saudi Aramco Products Trading Co expects its refined oil products trading volumes to rise to 1.5 million barrels per day (bpd) as its downstream business expands, the firm's chief executive said on Monday.

Aramco Trading, a subsidiary of state-run Saudi Aramco which plans a major increase in its refining capacity, started commercial operations in January.

Bahrain to award LNG terminal contract this year (Reuters) - Non-OPEC producer Bahrain plans to award a contract to build its liquefied natural gas (LNG) terminal by year-end, Bahrain's energy minister said on Monday.

Debate over continued incentives for energy companies Public money supports the development of nearly every form of energy -- a point not lost on a budget-conscious public after California solar company Solyndra Inc. wasted a $500 million federal loan and oil companies continued to rack up profits with nearly record gasoline prices.

A hodgepodge of incentives, from loan guarantees and grants to tax breaks, support coal, oil, nuclear, solar, wind and other projects.

Total ‘on track’ to begin Elgin well operation within days Total SA (FP), Europe’s third-largest oil producer, said it’s “on track” to begin a well intervention operation to plug a North Sea gas leak in the coming days.

The monthlong gas leak has shut production at the Elgin and Franklin fields and cost the company 50,000 barrels of oil a day. Total’s three platforms at the Elgin and Franklin fields are about 240 kilometers (150 miles) east of Aberdeen, Scotland.

Two Years Later, Grim Photos From the BP Disaster It's been two years since the Deepwater Horizon disaster unleashed 4.9 million barrels of oil on the Gulf of Mexico. In the midst of the disaster, BP and its contractors did everything they could to keep people from seeing the scale of the disaster. But new photos released Monday offer some new insight to just how grim the Gulf became for sea life.

The government does a poor job of estimating what it will cost to tear down a nuclear reactor, Congressional auditors say, and it may not be overseeing plant owners well enough to assure that they set aside enough money to do the job.

For a study it plans to issue on Monday, the Government Accountability Office scrutinized 12 of the nation’s 104 power reactors and found that for 5 of them, the decommissioning cost calculated by the Nuclear Regulatory Commission was 76 percent or less of what the reactor’s owner thought would be needed.

Japan shuts down last nuclear reactor Tokyo (CNN) -- As Japan began its workweek Monday morning, the trains ran exactly on time, the elevators in thousands of Tokyo high rises efficiently moved between floors, and the lights turned on across cities with nary a glitch.

What makes this Monday so remarkable is that for the first time in four decades, none of the energy on this working day is derived from a nuclear reactor.

Ford Focus will offer choice side by side: gas or electric LOS ANGELES -- Car shoppers will soon find two Ford Focus sedans sitting side by side when they visit the dealership -- one with a gas tank and another with batteries.

The case for interdependence The physicist-turned international environmental activist Dr. Vandana Shiva gave the opening keynote address at the Living Future “unconference” on May 2 in Portland, Oregon. Shiva is the author of Earth Democracy and Water Wars, among other books, including Soil Not Oil: Environmental Justice in an Age of Climate Crisis (South End Press, 2008). This book posits that the triple threat of climate change, peak oil, the food and agrarian crisis, together, represent a “triple opportunity”—but only if we change our thinking and our systems.

Amid Brazil’s Rush to Develop, Workers Resist JACI PARANÁ, Brazil — The revolt here on the banks of the Madeira River, the Amazon’s largest tributary, flared after sunset. At the simmering end of a 26-day strike by 17,000 workers last month, a faction of laborers who were furious over wages and living conditions began setting fire to the construction site at the Jirau Dam.

Throughout the night, they burned more than 30 structures to the ground and looted company stores, capturing the mayhem on their own cellphone cameras, before firefighters extinguished the blazes. The authorities in Brasília flew in hundreds of troops from an elite force to quell the unrest.

Food fears feed global scramble for land LONDON (AlertNet) - It was designed to increase production and exports of vegetable oil, a commodity in short supply after World War Two, and foster growth in post-war Britain and Tanganyika.

Instead, Britain's scheme to carve out million-acre plantations for growing groundnuts in what is now Tanzania ended in disaster - scuppered by the thick bush that rendered machines to clear land for cultivation useless, and a lack of suitable soil and rainfall for the crop to grow.

Food competition to leave poor hungrier by 2050-expert LONDON (AlertNet) - In 2008, as world food prices soared as a result of drought-hit harvests, growing grain demand and high oil prices, South Korea had an uncomfortable glimpse of the future.

The country, which imports 70 percent of the grain it needs, suddenly found major wheat and maize producers such as Russia and Argentina imposing export bans, aimed at keeping enough food at home to satisfy demand.

'Green bullet' innovations aim to feed world of 9 billion LONDON (AlertNet) - In flood-hit fields in the Philippines, farmers are testing a hardy new variety of rice that can survive completely submerged for more than two weeks.

In Kenya's Kibera slum, poor urban families are turning around their diets and incomes just by learning to grow vegetables in sack gardens outside their doors.

And in India, a push to help marginalised rural communities gain title to their land is leading to a significant drop in hunger.

Curbing food speculation - right step to stop hunger? Some experts say speculation does nothing more than aggravate other factors blamed for price rises, such as climate change, rising demand for food, export bans and soaring oil prices.

However, critics accuse banks, hedge funds and traders of exploiting the deregulation of the global commodity markets, initiated by the United States in 2000, to make a financial killing at the expense of the world's poor.

FACTBOX-Innovative ways to tackle urban hunger NEW YORK (AlertNet) - With the world's population set to swell to 9 billion people by 2050, hunger and undernutrition is expected to take on an increasingly urban face, as 70 percent of the planet's population become city dwellers.

One promising, if limited, solution is urban gardening.

From Bangkok to Boston, gardens are sprouting on the roofs of high rises, former factories, churches, and garages. Chicken coops and beehives dot rooftops and back gardens from London’s Hackney neighbourhood to the grittiest sections of Chicago.

Here are some innovative urban food projects:

Kenyan villagers grow their way out of food aid They started to invest in ways of harvesting and conserving water, and to experiment with a mix of indigenous and innovative methods of dry-land farming. The approach quickly bore fruit.

The scheme now has a membership of 3,000 registered households, with 2,000 more hoping to take part.

“It is the first programme I have seen that has managed to end dependence on food aid,” says Lawrence Kiguro, associate director for livelihoods and resilience at international aid group World Vision Kenya, which helped the community-led scheme get off the ground.

Sipping From the Garden Hose? Think Again. The group tested nearly 200 gardening products, including hoses, gloves, kneeling pads and tools, for lead, cadmium, bromine, chlorine, phthalates and bisphenol A. Over all, they found that two-thirds of the products tested contained levels of one or more chemicals in excess of standards set for other consumer products.

For example, 30 percent of all products tested contained lead exceeding the Consumer Product Safety Commission‘s standard of 100 parts per million for children’s products.

EU nations get cold feet over climate change fund (Reuters) - EU nations are dithering over how to fill a multi-billion-euro fund to help tackle climate change, just as the region's executive body hosts talks with countries likely to bear the brunt of extreme weather.

The Climate Fixers Is there a technological solution to global warming?

Safeguarding Mammoth Trees, Champs of the Ecosystem Among their many other invaluable roles, the oldsters also store a lot of carbon. In a research plot in California’s Yosemite National Park, big trees (those with a diameter greater than three feet at chest height) account for only 1 percent of trees but store half of the area’s biomass, according to a study published this week in PLoS ONE.

Glacial lake bursts in Nepal, flood kills at least 13 people A glacial lake burst Saturday in the Nepalese Himalayas, causing a flash flood that killed at least 13 people and left 60 more unaccounted for, PTI reports.

Another signal of the potentially deadly mounting cost of climate change, the flash flood, like several other glacial lakes that have burst in China, is believed to be the result of the melting of the Himalayan glaciers.

NREL develops more precise look at cradle-to-grave greenhouse gas emissions for energy technologies (Phys.org) -- A new approach to assessing greenhouse-gas emissions from coal, wind, solar and other energy technologies paints a much more precise picture of cradle-to-grave emissions and should help sharpen decisions on what new energy projects to build.

The method – a harmonization of widely variant estimates of greenhouse gas emissions by the U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) – is being heralded as an important step forward in life-cycle assessments that paints a clearer picture of the environmental penalties and benefits of different technologies.

This is a guest post by Dave Rutledge. Professor Rutledge is the Tomiyasu Professor of Electrical Engineering at Caltech, and a former Chair of the Division of Engineering and Applied Science there. This post originally appeared on Judy Curry's Climate Etc. blog here.

In this post, I consider the limited impacts of climate policy on fossil-fuel production and discuss estimates of fossil-fuel production in the long run. Since this is a cross post, with the original aimed at an audience with a climate interest, it includes introductory material that will be familiar to most Oil Drum readers. I would like to acknowledge the comments on my two earlier TOD posts, The Coal Question and Climate Change and The Coal Question, Revisited, that have helped me in writing this post.

1. Climate Policy and Fossil-Fuel Production

I will start with the notion that the response of carbon dioxide in the atmosphere has slow components that will dominate over time, like the exchange with the deep ocean and weathering of rocks. David Archer expressed this vividly, “A better approximation of the lifetime of fossil fuel CO2 for public discussion might be 300 years, plus 25% that lasts forever.” This means that from a climate perspective, it really does not matter whether we burn a particular ton of coal now or at the beginning of the Industrial Revolution—what counts is the total that the world burns in the long run.

This has several consequences. First, a national policy to reduce fossil-fuel consumption, like mileage standards for cars, will have little climate impact if it does not change world consumption in the long run. Actually, because oil is traded in a world market, mileage standards may have no effect on world oil consumption even in the short run. Figure 1 shows a plot of annual production versus price. Except for the years around the 1979 Iranian revolution, production increased steadily, and the price stayed below $50 per barrel in today’s money. However, starting in 2004, the plot went vertical, with a price range of more than 2:1, but with production varying by only 2%. If this is the case, when the United States reduces consumption, it will be offset by increased consumption elsewhere.

Figure 1. Supply vs price for world oil. Gt means billions of metric tons. This figure is an extension of one published in 2009 by Euan Mearns at The Oil Drum. Data are from the BP Statistical Review and from Brian Mitchell, 2007, International Historical Statistics, Palgrave-MacMillan.

Second, a new fossil-fuel resource resulting from improved technology like shale gas adds to long-term fossil-fuel production, increasing any climate effects. This is true even if the shale gas reduces carbon-dioxide emissions temporarily by partially displacing coal in electricity production.

The final implication is that resources must be walled off from future production to have an effect on climate. My favorite example of this, not least because of the political skill involved, was the creation of the Grand Staircase-Escalante National Monument in Utah by the Clinton Administration. This area contains most of the Kaiparowits Plateau coal field, which is a big one. The Utah Geological Survey estimated the minable coal at 11Gt. For comparison, annual US coal production is about 1Gt. The action was not popular in Republican Utah, which might have gotten $30 per ton for the coal. President Clinton, a Democrat, made his announcement across the border in swing-state Arizona, which he carried in the election two months later. Even though we can acknowledge President Clinton’s political ability, we should be cautious in crediting him with a full 11-Gt reduction in future production because it is not clear how much production would have taken place without National Monument status. Past production only comes to 40,000 tons, with none since the 70′s. It is worth noting that the US Geological Survey estimate for the recoverable coal was 4Gt, much less than Utah’s.

Can climate policy significantly reduce world fossil-fuel production in the long run? At the G8 meeting in L’Aquila, Italy, in 2009, our leaders pledged an 80% reduction in greenhouse-gas emissions by 2050. This proclamation is certainly meant to encourage the countries of the world to commit to this reduction, but so far only the UK has passed the legislation for it.

For perspective, it is worth looking at the historical record before and after the Kyoto Agreement was signed in 1997. Figure 2 shows world fossil-fuel carbon-dioxide emissions, taken from the BP Statistical Review. Do you see a decrease in emissions after the agreement was signed? I don’t either; if anything, emissions accelerated. It is worth noting that the EU and the US show the same percentage decline in emissions, 0.4%/y over the last 10 years, even though the EU countries all ratified the Kyoto Agreement and the US did not.

Figure 2. Annual world fossil-fuel carbon-dioxide emissions. 2012 is the year countries are judged on whether they have met their Kyoto commitments. The 2012 marker is an extrapolation, based on the average growth rate over the past ten years.

The figure also shows where an 80% reduction in 2050 would take us. It is not easy to convey the enormity of what our leaders agreed to. One comparison we can make is to the collapse of the Soviet Union. From 1990-1999, fossil-fuel emissions fell 40% there, and this was no one’s idea of a good time. To get to 80%, the entire world need to do this four times, voluntarily. Not going to happen. What were they smoking?

What about policy impacts at the local level? My home state of California has implemented an ambitious renewable-energy policy through a series of laws, starting with Assembly Bill 1078 in 2002 and culminating in Senate Bill 2 in 2011. These commit the state to a 20% renewable share for electricity in 2010, and a 33% renewables share in 2020. In California-speak, renewables means no large hydro and no nukes. In his signing letter for Senate Bill 2, Governor Jerry Brown wrote, “With the amount of renewable resources coming on-line, and prices dropping, I think 40%, at reasonable cost, is well within our grasp in the near future.”

Well, we are half-way from 2002 to 2020 now. How is California doing? You can judge the progress in Figure 3. The in-state renewables share has actually fallen during this period. California missed its 2010 goal badly, but it appears that the only result of this was to set an even more unrealistic goal for 2020. Governor Brown seems to be smoking something also.

Figure 3. Renewable shares in Californa. The data for the figure come from the California Energy Almanac. Incidentally, if you like plans, this web site is great. But if you want data….

It is hard for me to think of a bigger disconnect between the politics and the reality. What is going on here? Table 1 shows the renewables shares by source. The biggest is geothermal, which peaked in 1992. Biomass is stuck because pollution rules make it is difficult to get permits to build an incinerator in California. Small hydro is no longer favored and it shows. The one bright spot is wind from Oregon and Washington, but wind imports are not going to get us anywhere near 33% by 2020. Most surprising is that the solar share has been flat for ten years, even though California’s solar resources are stupendous.

Table 1. Renewables shares for California electricity in 2010 and 2010. I have broken out in-state and imports for wind, but the total is shown for the other sources.

What this tells us is that there is no magic climate-policy wand that will let us set the total fossil-fuel production in the long run to a particular number. This is not to say that climate policy does not have short-term effects. The EPA’s proposals for carbon-dioxide emissions limits certainly discourage utilities from building new coal plants. If I were a Kentucky coal miner who lost his job this year I would likely blame the EPA. However, the current coal plants could be operated for generations to come, so the coal can be consumed eventually. In addition, even if American customers are lost, an offsetting export market may develop because American coal mining costs are low. Wyoming miners can make money selling coal at $10 per ton, while the price in the main export market, East Asia, is over $100 per ton. This depends on being able to ship the coal to East Asia at a cost that would meet the market price there.

2. Reserves vs. Resources

So, independently of climate policy, how can we estimate production of oil, gas, and coal in the long run? Economists have shown surprisingly little interest in this problem, but many geologists and engineers have been fascinated by it.

First we need to distinguish two terms, reserves and resources:

Reserves refers to oil, gas, and coal that have been discovered and characterized (proved), and that one could produce and sell at a profit now. People distinguish between the oil (or gas or coal) in place, and recoverable reserves that make an allowance for what is left behind when production is finished. Proved, recoverable reserves for oil, gas, and coal have been tracked at the national level for many years.

Resources refers to oil, gas, and coal that are of economic interest. This is a broader term than reserves. At the national level, resources are not well defined or tracked, and they are subject to political winds. In practice, resources means whatever a speaker wants it to mean. As a result, the statement in the President’s recent State-of-the-Union Address, “We have a supply of natural gas that can last America nearly 100 years,”conveys little information.

The boundary between the reserves and resources is not fixed. New technology and higher prices can cause resources to shift to the reserves category. For one example, because of new horizontal drilling and hydrofracturing technology, some shale gas can now be counted as reserves rather than resources. As another example, high oil prices have enabled production from the Canadian tar sands, and Canadian oil reserves are now 3rd largest in the world.

Perhaps surprisingly, reserves can also shift to resources. In 1913, US coal reserves were 4Tt (trillion metric tons). A hundred years later after 60Gt of production, American coal reserves are now 240Gt. The early reserves criteria were too optimistic—seams as thin as 1 foot down to a depth of 4,000 feet down were counted. However, this coal was not mined a hundred years ago, and it is not mined now. Over time, as it has became clear that the criteria were too optimistic, the US Geological Survey tightened up the rules, and other countries followed their lead.

We will develop estimates first for coal, and then for oil and gas together. At this point, future production for other sources like methane clathrates and oil shales is speculative, and they will not be considered.

3. Coal Production in the Long Run

In energy terms, world coal production is 95% of world oil production, and coal is on track to pass oil this decade. Coal markets are regional—85% of coal is consumed in the country it was mined. This means we need a regional analysis. I have given one in a paper in the Journal of Coal Geology that considers the world in 14 regions. I will only summarize the results here. The approach in the paper is to fit an s-curve (logistic or cumulative normal) to the cumulative production history, and to use the top of the s-curve as an estimate of the total production in the long run. Coal has a long production history that we can use to test our ideas. Several regions are very late in the production cycle, with a current annual production that is a thousand times less than the cumulative production. The results for these mature regions are summarized in Table 2 below.

Table 2. Production for four mature coal regions. This table is an updated version of one that appeared in my Coal Geology paper.

One way to estimate the long-term production is to add reserves to the cumulative production. Early reserves and production history are available for each of the regions. Surprisingly, this approach gives numbers that are too high. For example, Japan and South Korea have produced only 21% of the early reserves plus cumulative production. The other regions also show this pattern. Across the four regions, the average is only 26%.

The results of the s-curve fits are given in the “Long-term production projection” and “Long-term production projection range” columns. “Long-term production projection” gives the current estimate, and the range column indicates how the projections have evolved since 1900 (since 1950 for Japan and South Korea). The average range in percentage terms is 38%, so this gives the uncertainty in the estimate. It is interesting that in each case, it appears that the range will include the actual long-term production. However, we cannot be sure of this until the last mine in each region shuts down.

How should we interpret these results? None of the mature regions has come close to producting its reserves, so for coal at least, we might take the reserves as an upper bound on future production. It is interesting that the IPCC in its scenarios assumes that a multiple of the reserves could be produced. However, there is no historical precedent for this in any of the mature regions. On the other hand, the s-curve fitting ranges do appear to predict the long-term production correctly, with an error of about plus or minus 20%.

We can estimate the long-term production for the entire world by adding the results for the 14 regions. The latest world reserves at year-end 2008 were 861Gt and the world cumulative production at that time was 303Gt. This gives a total of 1,164Gt. The s-curve fits updated for the 2010 production give a long-term production of 723Gt, 62% of the reserves plus cumulative production. Thus, the pattern of underproducing reserves that we saw in the mature regions appears to be repeating.

The analysis also indicates that the world reaches 90% of the eventual long-term production in about 60 years. This result should be viewed as a current trend, rather than a projection with uncertainties, because historical shocks that changed the production rate. For example, production slowed after the collapse of the Soviet Union. For the mature regions the production at the 90% point had fallen to about 40% of the peak production. So at that point you would need a Plan B or use less.

4. Oil and Gas Production in the Long Run

In contrast to coal, about half of world oil and gas is exported, and we can consider a world analysis. Usually oil and gas are considered separately, but there is really not a clear distinction. They often come out of the same wells and some products like propane are sold pressurized as liquids and burned as gases. Figure 4 shows the production history.

Figure 4. Production history for world oil and gas, taken from the BP Statistical Review. Here toe stands for metric ton of oil equivalent. It is an energy unit equal to 42GJ.

Notice that the world shifted to a slower pace after the 1989 Iranian Revolution. For this reason, I will start the curve fits a few years after the revolution. The approach I use here was popularized by Ken Deffeyes in two very interesting books, Hubbert’s Peak and Beyond Oil. The technique is called Hubbert linearization, in honor of the geophysicist King Hubbert, who first used it for this purpose. In Hubbert linearization, the cumulative production is plotted on the x-axis, and the growth rate for the cumulative is plotted on the y-axis (Figure 5). Algebraically, the growth rate can be expressed as p/q, where p is the annual production and q is the cumulative production. This kind of plot linearizes a logistic function. The chief advantage of Hubbert linearization is that it gives one an excellent way to visualize the fit. There are some disadvantages that are discussed in my Coal Geology paper.

Figure 5. Hubbert linearization for world oil and gas. This is same data as Figure 4, but replotted with different axesw. The point for the reserves plus cumulative production is calculated from various editions of the BP Statistical Review.

In the Hubbert linearization, the x-intercept gives the estimate for the long-term production. In the figure, I vary the starting point from 1983 to 1995 to give a sense of the uncertainty. The range is 530-680Gtoe. This range contains the reserves plus cumulative production, 608Gtoe. This is different from coal, where countries under-produced reserves. This agreement is fortuitous; it is easy to identify factors that might bias oil and gas reserves high and low. US oil reserves have historically been close to ten years of future production, which clearly makes them too low as an estimate for total future production. On the other hand, OPEC oil reserves have often been criticized for arbitrary increases and lack of outside auditing, and may be biased high.

I will not give the analysis here, but it turns out the curve fits indicate that the world reaches 90% of the long-term oil and gas production around 2070, just like coal. Again, this does not mean that production would cease by then, but it is likely to be half the peak value and dropping. And as for coal, we would either need to use less or replace the energy from a different source.

5. Discussion

Oil and gas are really quite different from coal, and we should not expect their reserves to necessarily have the same relationship to long-term production. Oil and gas are usually hidden in geological traps, and they are difficult to find. Once found, however, oil and gas are relatively easy to produce—the pressure helps. Governments can even arrange turn-key concessions, and the money starts rolling in. On the other hand, coal is a rock, and it is easy to identify most of the major coal fields at outcrops. But there is nothing easy about mining coal underground. To get a sense for this, watch Michael Glawoggen’s documentary on Ukrainian coal miners. I am sure most of us would prefer to get our electricity from solar panels in our yard to manually hewing coal underground if we could afford it. However, coal provided the first rung on the energy ladder for many of the world’s economies, and our society reflects the scientific, technical, and social experience of underground coal mining. And coal has a similar importance in many countries that are on their way up today.

Table 3 summarizes the results. For coal, I use the curve fits, because they have proved more reliable in the mature regions than reserves. For oil and gas, the curve fits are consistent with reserves, and reserves are used. The current world production is also shown for comparison.

Table 3. Summary of results, expressed both in energy terms as Gtoe and as carbon dioxide emission as CtC, billions of metric tons of carbon content in the emitted carbon dioxide. At the world level the energy content of a ton of coal in the BP Statistical Review has historically averaged half that of a ton of oil. For these carbon-dioxide calculations, I have used the carbon coefficients in the BP Statistical Review. It should be kept in mind that the long-term production includes the current cumulative production. To estimate the total future production, you would need to take the difference of the two.

How do these emissions compare with the IPCC numbers? The forthcoming 5th Assessment Report uses representative concentration pathways, RCPs for short. The total carbon-dioxide emissions here, 857GtC, fall between RCP2.6 (peaking around 660GtC in 2070) and RCP4 (1,100GtC and rising in 2100). However, these RCPs assume an effective climate policy. They start with a prescribed top-of-atmosphere forcing and work backwards to a published scenario. It would be more appropriate to compare the emissions here to RCP8.5. This is the only RCP that is unconstrained by climate policy and it might be said, even by geology, with cumulative emissions of 5600GtC in 2500.

For people in the renewables business, what are the implications of a 60-year time frame for reaching 90% of the eventual long-term production? I do not know, but I will guess. You will be facing economic headwinds for decades, and competing with rent seekers who are better at securing favorable rules than they are at actually producing energy. You will be dependent on subsidies and renewables targets, in other words, on other people’s money. But as the Iron Lady observed, other people’s money runs out.

There is a real, practical limit to the amount of oil that can be recovered from a reservoir. Depending on the availability and economic viability of different technical approaches that limit might be less than 25% of the total volume of oil originally in place, or it can be more than 50%, as has been achieved in some of the fields in the Kingdom of Saudi Arabia(KSA). But one cannot get out more oil than is originally there, and in most cases it is difficult to reach even half that value.  However, where the volumes of oil that have been left by conventional methods remains high, as it does in the KSA, then the use of advanced technology, as I began to explain last time, become easier to justify.

 KSA is now reaching the point where the easy production of oil, as in sink vertical wells at kilometer intervals and watch an average of 10 kbd merrily bubble to the surface, is now largely over. Increasingly the oilfields are moving into the more advanced, and costly, procedures that help sustain a production that would, under earlier production regimes, by now have long faded into memory. Ghawar, for example, is moving into CO2 injection and some steam assist (likely with the areas with heavier, tar-ier deposits) seeking to maintain an overall 5 mbd production.

But today I want to talk a little about their increasing use of hydraulic fracturing of their horizontal wells, and a little more technical detail about growing cracks through rocks. Consider the problem that high production fields have, when a horizontal well runs through a high permeability, or densely fractured zone. The impact of this on premature water breakthrough is well documented. The relative preferential movement, for example of water along faults can be seen in this model from Ghawar.

Figure 1, Relative water movement along faults in Ghawar (Dogru et al)

 It is also evidenced by this simulated model of the effect of high fracture densities on the performance of MRC wells, where increasing the drawdown pressure to pull fluid into the wells can lead to premature watering out of the well.

Figure 2. Use of a low draw down pressure to maintain oil flow.

With low draw down, the flow rates are reduced, but the fluid entering the well remains largely oil (Mubarak et al)

In contrast if the differential pressure is increased (by lowering well pressure) then the greater flow rates allows the underlying water to flow up the fractures and prematurely waterflood the well.

Figure 3. The use of a higher draw down pressure preferentially encourages water migration up the fractures, killing the well prematurely. (Mubarak et al)

It has been obvious to Aramco (who run the KSA fields) for some time that adding their own fracture paths to the field would result in better performance, and could also help overcome the problem of natural fractures and high-permeability zones such as those known as the Super-K in Ghawar.

Figure 4. Section through conventional dolomite at Ghawar (Cantrell et al) 

 Contrast this with the blue epoxy-filled pores of the super-K layers which indicate the high permeability.

Figure 5. Section through the super-K dolomite (0nly 5-ft from the sample in figure 2, in the same well. (Cantrell et al)

 There is thus an incentive to provide paths for the oil to make it as easy to reach the well. What follows is a more advanced discussion of hydraulic fracturing, but for those who are not that interested, the earlier simpler description is given here (TOD and BTE).

Now just a little bit of extra tech talk. If you take a rectangular piece of Plexiglas (which gets around the geological variations in properties that occur with rock) as an example, and carefully cut a notch into the center of the block, you can grow a crack out from that notch, by putting the beam into simple 3-point bending. (We started doing this because we wanted some experimental results to compare with the various theories predominant at the time over the stresses required to initiate fractures).

Figure 6. Crack grown out from a wire-sawn notch in Plexiglas, under 3-point bending. 

 One of the first practical steps you take is to stop using a wire saw for the entire crack but cut most of the notch with a milling tool, and only use the wire saw for the last few mm. (The reason is that the heat on the wire causes a high failure rate of the cutting wire, particularly with a set of neophyte graduate students, and the wire, being diamond impregnated, is very expensive). 

 The next thing that you learn is that if you adjust the crack length, you can grow the crack very slowly and stop if where you want, so that it is fairly easy to work out how much work you are putting in relative to the crack surface generated, and the force required to start the crack. Further the surface of the fractured surface has a characteristic look, which we called “river lines.”

Figure 7. Surface of a crack grown out slowly from the initial notch (finger for scale) 

 However if you changed the notch length so that so that it was less of a percentage of the sample width, the crack almost immediately moved much faster, and unless you made a special effort, could not be stopped within the sample (as occurred in Figure 4). And further the crack surface was very smooth, in contrast with the "river lines" of the slower moving crack.

Figure 8. Crack grown from a shorter notch, with a higher speed of advance in the sample, note the smooth surface. 

 What this shows is something that Dick Bieniawski was also finding in rock itself (as we later also demonstrated). Depending on the initial length of the crack, so the speed that the crack grows at changes, and at the higher speed it moves, not around the particles of rock, but often through them. (In our case we were seeing the effects of discontinuities in the Plexiglas as the cause of the deviations in the surface). Dick’s work is given here and here, though I found it in the International Journal of Rock Mechanics and Mining Science (vol 4 no. 4 pp 395 – 430).

Essentially he found (and this has been confirmed by others that based on initial geometry a crack begins to grow relatively slowly, but then accelerates to a terminal velocity, which remains relatively constant. Unfortunately the papers are behind a paywall, so I cannot use the exact curve that Dick drew, but I am going to approximate it, as follows:

Figure 9. Change in crack velocity with length (after Bieniawski IJRMMS) 

 (Half lengths are used, since for many theories the crack is anticipated to initiate as an oval shape. For the fractures in the field these are usually measured in tens of feet. (Rahim and Al-Qatani) 

 There are two critical points that come out of this work. The first is that it is preferable to start with a crack of a significant length so that the acceleration rapidly moves to a trans-granular surface, rather than just growing around the grains. The reason for this is practical in that small cracks can be stopped if they reach an area with a large radius (as in the reason you drill a hole at the end of a crack to stop it growing through a sheet of metal). Having the crack initially moving faster means that it can overcome small open spaces, but also that it can create a smoother, slicker path along which fluid can flow with less resistance. 

 The other aspect of growing the crack is that if you try putting too much energy into it (for example by over-pressuring the borehole) the crack will not grow faster, rather it will expend the additional energy by splitting into a number of cracks that deviate off somewhat from the original direction. That also tends not to be a good thing if you are trying to open a single passage way through the rock, wide enough to push particles into, along with the fracturing fluid. To stop that happening one can, for example pulse the pressure in the well so that only enough energy gets to the crack tip so as to keep only a single fracture growing out. One also has to ensure that the crack is initiated within the right orientation to the existing stress fields. Aramco have, however, become skilled in determining the effectiveness of the fractures by monitoring, among other things, the temperature flows of fluids into the well.

Figure 10. Induced fracture and the evidence for it from the temperature log (Rahim and Al-Qatani )

 Aramco have started to use hydraulic fractures in their horizontal wells, including those with open hole completions with the interval between packers ranging from 100 to 1000 ft, depending on geology.

The pressure within the packed off section of the horizontal well is then increased until the wall fractures and the crack grows out into the formation. An example of how the pressure changes in the well as the fracture grows is given by Al-Naimi et al.

Figure 11. Pressure plot during the generation of a hydraulic fracture (Al-Naimi et al). 

 Getting the rest of the oil, after the best is gone, is an ongoing effort, particularly in older fields such as Ghawar. But understanding some of the technology makes it possible to further appreciate what Aramco are developing to further produce some of the more difficult regions within the field. (But that is a topic for another day).

Fuel Policies Bedevil Asia as Price Increases Hurt Poor: Economy For K. Indrani, who cleans homes in Colombo to support her invalid husband and 16-year-old daughter, living on the 600 rupees ($4.70) she earns a day just got harder because the Sri Lankan government raised fuel prices in February.

“We have only three lights in our house, but we try to keep them off as much as possible,” the 46-year-old said. “This is affecting my daughter’s studies. We are forced to keep the fridge running, but we are having to cut down on food as we can now afford less on the same pay.”

Indrani’s plight highlights the dilemma for Asian governments from Indonesia to India as they struggle to rein in rising subsidies for energy and food that are inflating budget deficits. Sri Lanka’s inflation doubled to 5.5 percent in March after the island raised fuel prices the previous month to curb the trade gap, and concern that higher costs will distress the poor and spur voter anger has restrained increases elsewhere.

Oil Falls to Lowest Since February Before U.S. Jobs Data Oil fell below $100 a barrel for the first time since February as U.S. employers added fewer workers than forecast, stoking concern that demand won’t be enough to reduce inventories from their highest level in 21 years.

Futures declined 3.9 percent after Labor Department figures showed payrolls rose 115,000, the smallest gain in six months. An advance of 160,000 was projected, according to the median of 85 economist forecasts in a Bloomberg survey. Euro-region services and manufacturing output contracted more than initially estimated in April.

Quick Vote How much does your family spend on gasoline per month?

Libya's Arabian Gulf Oil Company cuts oil production PanARMENIAN.Net - Libya's Arabian Gulf Oil Company (Agoco) has cut oil production by another 10,000 barrels per day (bpd) due to protests that have closed off its headquarters for nearly two weeks, a spokesman said on Saturday, May 5.

Reuters reported that protesters have prevented employees from entering Agoco's office since April 23, calling for more transparency over how Libya's new rulers are spending its money and more jobs for youth.

UAE Hormuz Bypass Pipeline To Export In 3 Months The UAE's strategic oil pipeline for bypassing the Strait of Hormuz is complete and exports are expected to start within three months, UAE Oil Minister Mohammed al-Hamli said on Thursday.

Feds likely could push pipelines through B.C. after long legal struggle VANCOUVER — Legal experts say the federal government probably has the power to push the Enbridge Northern Gateway pipeline and the Kinder Morgan pipeline expansion to completion despite opposition in B.C. which grew Tuesday to include B.C. hockey hero Scott Niedermayer.

Niedermayer said Tuesday the Northern Gateway pipeline and its associated tankers are too great a risk to run through B.C.'s so-called "Great Bear region."

Shell shuts down Nigeria pipeline over theft Royal Dutch Shell PLC says it has shut down a major pipeline running through Nigeria's oil-rich southern delta because it had been repeatedly targeted by thieves.

Chesapeake Seen Offering Biggest Gain in U.S. Shale Boom: Energy Chesapeake Energy Corp., battered by a glut-driven collapse in natural-gas prices and growing investor distrust of its management, still is the cheapest way of buying into the U.S. shale revolution.

Warm winter limits Spectra's earnings Record low natural gas prices and the warmest winter in 100 years translated into a lower first-quarter profit for Spectra Energy, a Houston-based natural gas pipeline operator.

Net income fell to $333 million from $357 million in the first quarter of 2011, and operating revenue fell to $1.54 billion from $1.61 billion a year earlier.

National Fuel sees 42% drop in earnings National Fuel Gas Co.’s second-quarter earning tumbled by 42 percent as lower natural gas prices hurt its oil and natural gas drilling business and the warm winter cut into earnings at its utility operations.

Russia's Rosneft signs deal with Norway's Statoil MOSCOW (AP) -- Russia's state oil company Rosneft has announced the signing of a deal with Norway's Statoil to jointly develop deposits in Russian sections of the Barents and Okhotsk seas.

Rosneft, which is Russia's largest oil producer, said Statoil ASA will take a 33 percent stake in the joint venture and will finance the initial exploration.

Russia shows interest in exploration of oil and gas in Pakistan KARACHI: Russia has shown interest in exploration of oil and gas in Pakistan.

This was stated by the Federal Minister for Petroleum and Natural resources, Dr Asim Hussain, here on Saturday.

He further pointed out that the Russians are willing to explore oil and gas in Pakistan.

Ahmadinejad rivals rout president in Iran runoff TEHRAN, Iran – Supporters of President Mahmoud Ahmadinejad have been reduced to a small fraction in Iran's legislature, hugely outnumbered by the conservatives who once backed him but then turned against him after he was perceived to challenge the authority of top clerics, according to final results from a runoff parliamentary election announced Saturday.

Iran has touted the turnout for Friday's vote as a show of support for the country's religious leadership in their confrontation with the West over Tehran's controversial nuclear program.

Iran May Lose 9.5% of Oil Contracts as Asian Buyers Cut Imports Iran is poised to lose at least 192,000 barrels a day of crude-supply contracts, or about 9.5 percent of its global exports, as Asian buyers curb purchases amid western sanctions targeting the nation’s oil trade.

Iraq aims to double power supply by next year Iraq plans to double its electricity supply to 12,330 megawatts (MW) by 2013 as it brings new sources of power online, the electricity ministry said on Saturday, but is still seen falling short of demand.

Iraq needs investment in most of its industries after years of war and economic decline. In a country where temperatures can top 50 degrees Celsius in summer, power generation is especially crucial.

Fracturing rule offers a concession WASHINGTON - The Obama administration on Friday unveiled a proposed rule that would force companies to reveal the chemicals they use when drilling for oil and natural gas on public lands.

But the long-anticipated regulation includes a major concession to oil and gas companies - allowing the disclosures after a well is drilled and the chemicals are pumped underground instead of a month beforehand as federal regulators originally considered.

Frack First, Disclose Chemicals Later Under U.S. Rule “This is a free pass to the oil and gas industry at the expense of public health,” Jessica Ennis, a Washington-based legislative associate for the environmental group Earthjustice, said today in an e-mail.

New Keystone Bid Gives GOP Political ’Ammunition’ A fresh application from TransCanada Corp. to build the Keystone XL oil pipeline assures that the project, strongly opposed by environmental groups, will remain an issue through the November U.S. presidential election.

Russian nuclear power plant 'explodes' Bulgaria Bulgaria is protesting against the government's decision to abandon construction of NPP "Belene". The facility erected by Russian specialists was to help the Balkan country to meet stringent EU requirements for reducing greenhouse gas emissions. But the political situation was more important for the Sofia politicians than the national interests.

Japan nuclear power-free as last reactor shuts TOKYO (Reuters) - Japanese utility Hokkaido Electric Power Co began shutting the country's last active nuclear reactor on Saturday, leaving the world's third-biggest user of atomic energy with no nuclear-derived electricity for the first time since 1970.

Debbie Chachra on "peak plastic" If we’re running out of oil, that also means that we’re running out of plastic. Compared to fuel and agriculture, plastic is small potatoes. Even though plastics are made on a massive industrial scale, they still account for less than 10% of the world’s oil consumption. So recycling plastic saves plastic and reduces its impact on the environment, but it certainly isn’t going to save us from the end of oil. Peak oil means peak plastic. And that means that much of the physical world around us will have to change.

Transition reaches Latvia Ikskile Transition Initiative is a pioneering project that promotes the Transition Movement and permaculture in Latvia. It became an official transition initiative in March 2011, and a registered NGO in July 2011. The website has been visited more than 26,000 times. ITI aims to be a platform that connects the local inhabitants and organizations who value self-sufficiency, localization and sustainability. Meanwhile, the initiative is bringing a new awareness regarding global and local peak oil and climate change challenges, so that a new motivation, focus and energy is brought to ITI member's already existing activities and services.

A Recycling Czar for New York City In a sign that New York City is getting serious about improving its poor recycling record, the city’s Department of Sanitation is appointing a recycling industry innovator as its new “deputy commissioner for recycling and sustainability.”

Degraded environment threat to national security, says retired general BUTUAN CITY (MindaNews) – For retired Lt. Gen. William Hotchkiss III, the greatest threat to national security is not the rebels but environmental destruction.

Hotchkiss, the 24th commander of the Philippine Air Force and former Philippine Eagle Foundation president, yesterday issued a statement challenging the government to keep a close watch on the environment saying its degradation is the greatest threat to national security.

When Global Warming Ate My Life It never occurred to me that my status quo confronted a mortal threat and could be extinguished forever. My mind did not conceive that in a few hours everything we had worked for and cherished would no longer exist.

I committed a cognitive error that I call "the error of predictability." It is the deeply ingrained tendency of every living system -- from the human brain to microorganisms to complex societies -- to operate as though the near future will follow from the near past. As a social scientist I have studied this pattern for decades. I've pored over control room transcripts in which operators ignored catastrophic data, preferring to think "bad instruments" rather than "CATACLYSM!" I have worked closely with hundreds of adults in crisis struggling to cope with change. I've consulted with companies reluctant to let go of the past. The morning of the fire I completed work for a chapter in my new book. The title? The Error of Predictability. Apparently knowledge did not inoculate me from this error.

There is a real, practical limit to the amount of oil that can be recovered from a reservoir. Depending on the availability and economic viability of different technical approaches that limit might be less than 25% of the total volume of oil originally in place, or it can be more than 50%, as has been achieved in some of the fields in the Kingdom of Saudi Arabia(KSA). But one cannot get out more oil than is originally there, and in most cases it is difficult to reach even half that value.  However, where the volumes of oil that have been left by conventional methods remains high, as it does in the KSA, then the use of advanced technology, as I began to explain last time, become easier to justify.

 KSA is now reaching the point where the easy production of oil, as in sink vertical wells at kilometer intervals and watch an average of 10 kbd merrily bubble to the surface, is now largely over. Increasingly the oilfields are moving into the more advanced, and costly, procedures that help sustain a production that would, under earlier production regimes, by now have long faded into memory. Ghawar, for example, is moving into CO2 injection and some steam assist (likely with the areas with heavier, tar-ier deposits) seeking to maintain an overall 5 mbd production. But today I want to talk a little about their increasing use of hydraulic fracturing of their horizontal wells, and a little more technical detail about growing cracks through rocks. Consider the problem that high production fields have, when a horizontal well runs through a high permeability, or densely fractured zone. The impact of this on premature water breakthrough is well documented. The relative preferential movement, for example of water along faults can be seen in this model from Ghawar.

Figure 1, Relative water movement along faults in Ghawar (Dogru et al)

 It is also evidenced by this simulated model of the effect of high fracture densities on the performance of MRC wells, where increasing the drawdown pressure to pull fluid into the wells can lead to premature watering out of the well.


Figure 2. Use of a low draw down pressure to maintain oil flow.

With low draw down, the flow rates are reduced, but the fluid entering the well remains largely oil (Mubarak et al) In contrast if the differential pressure is increased (by lowering well pressure) then the greater flow rates allows the underlying water to flow up the fractures and prematurely waterflood the well.
Figure 3. The use of a higher draw down pressure preferentially encourages water migration up the fractures, killing the well prematurely. (Mubarak et al)


It has been obvious to Aramco (who run the KSA fields) for some time that adding their own fracture paths to the field would result in better performance, and could also help overcome the problem of natural fractures and high-permeability zones such as those known as the Super-K in Ghawar.



Figure 4. Section through conventional dolomite at Ghawar (Cantrell et al) 

Brazil Sending More Troops to Guard Amazon Borders RIO DE JANEIRO — Brazil is deploying more than 8,500 troops to the far reaches of the Amazon rain forest this month in an operation aimed at cracking down on drug smuggling, gold mining and illegal deforestation, officials said.

The troop mobilization sends a clear message ahead of the United Nations Conference on Sustainable Development, which is scheduled to take place here in June, that Brazil is taking steps to assert greater control over its porous frontiers in the Amazon. Soldiers are being sent to border areas near Venezuela, Suriname, French Guiana and Guyana.

“The Amazon is Brazil’s No. 1 priority from a strategic viewpoint, given its importance to humanity as a source of water, biodiversity and food production,” Gen. Eduardo Dias da Costa Villas Boas, chief of the Amazon Military Command, said in a telephone interview.

Oil falls to three-month lows under $115 LONDON (Reuters) - Oil fell to three-month lows of under $115 per barrel on Friday ahead of a U.S. payrolls report and was set for its steepest weekly fall since December due to concerns over the health of the global economy and easing fears over supply disruption.

The jobs data will help investors gauge the outlook for demand growth in the world's biggest oil consumer amid renewed worries its recovery may be faltering. Businesses outside the farm sector are expected to have added 170,000 jobs last month, according to a Reuters survey.

OPEC says supply ample, speculation driving price PARIS (Reuters) - Oil supply will be more than sufficient to meet demand this year and beyond, OPEC's Secretary General said on Thursday, but added the price of fuel is being driven higher by speculation.

"There has been no shortage of oil in the market. Producers have been able to meet consumer needs," Abdullah al-Badri told an energy conference. "We also see this as being the case for the rest of 2012 and the foreseeable future."

British spot gas firms on supply shortages LONDON (Reuters) - British gas prices firmed on Friday as the pipe linking Britain and Belgium flipped to import mode to cover domestic supply shortages, and planned maintenance in Norway next week raised the likelihood of further cutbacks.

North Sea gas output turned lower compared with Thursday's average and imports from the Netherlands also fell, somewhat counter-balanced by another rise in Norwegian deliveries.

Russian govt approves gradual rise in gas taxes (Reuters) - Russian government approved an increase in mineral extraction tax (MET) for Gazprom to 582 roubles ($19.82) per 1,000 cubic metres of gas starting from Jan. 1, 2013, a Finance Ministry official said on Wednesday.

India proposes setting up sovereign fund to buy coal assets abroad -min NEW DELHI (Reuters) - India's coal ministry has proposed setting up a sovereign wealth fund to buy coal assets abroad, Coal Minister Sriprakash Jaiswal said on Friday.

Coal accounts for more than half of India's power generation and will be required for 85 percent of the 76,000 megawatts additional capacity targeted in the next five years.

India’s Quest for Coal Stalls as Red Tape Kills Mining Takeovers India’s quest for natural resources to power its growing economy and compete with China has met the enemy: Its own red tape.

Thwarted by lengthy bureaucratic delays for approvals, Indian state companies have lost out on or walked away from at least seven purchases of overseas coal and mining assets in the last two years, data compiled by Bloomberg show. They have completed just a single overseas deal between them in that time.

India's Reliance hit with US$1.25b fine MUMBAI: India's government has asked energy giant Reliance Industries to pay a US$1.25 billion penalty for a fall in gas production from its main oil fields, a company executive said on Friday.

The government and investors have been concerned for months over Reliance's declining gas output from its main D6 fields in the Krishna-Godavari basin off the coast of eastern India.

Exclusive - Shell, PetroChina JV Australia LNG faces big cost overrun - source (Reuters) - The cost of Royal Dutch Shell (RDSa.L) and PetroChina's 0857.K Australian joint venture LNG may rise as much as 50 percent from initial estimates, which could force the companies to delay development, a source close to the project said on Friday.

Russia's Gazprom mulls gas pipeline, LNG supply boost to Japan Moscow (Platts) - Russia's Gazprom Thursday said it is considering the construction of a gas pipeline to Japan as well as higher LNG supplies to its Asian neighbor.

Representatives of Gazprom and the Japanese parliament discussed gas cooperation at a meeting held Thursday, a Gazprom statement said.

Turkmens plan trans-Afghan gas sale deal in May ASHGABAT, Turkmenistan (AP) - Senior officials in Turkmenistan say the energy-rich Central Asian nation plans to sign a natural gas sales agreement with Afghanistan, Pakistan and India this month.

The deal would mark a decisive move toward construction of a pipeline crossing the four nations that backers hope will meet energy demands across the region.

First floating LNG terminal to start delivering gas Indonesia’s first floating storage and re-gasification unit (FSRU) is expected to commence gas delivery to state electricity company PT Perusahaan Listrik Negara’s (PLN) Muara Karang power plant on May 15.

Revolution in Yemen: 'We are not finished yet SANAA, Yemen – Salman Abdul Salam has lived on University Square in Sanaa for more than a year in protest. He hasn't had a job since graduating from college two years ago. His clothes are worn, and he says he's too poor to marry his girlfriend.

But the departure of longtime dictator Ali Abdullah Saleh has him feeling determined.

"We are not finished yet," said Salam, 25. "This revolution will continue until Saleh is tried and Yemen is passed over to civilian hands."

Iran dismisses Western demand to close nuclear bunker VIENNA (Reuters) - Iran said on Friday it will never suspend its uranium enrichment programme and sees no reason to close the Fordow underground site, making clear Tehran's red lines in nuclear talks with world powers later this month.

Last month a senior U.S. official said the United States and its allies would demand that Iran halt higher-grade enrichment and immediately close the Fordow facility at talks over Tehran's nuclear standoff with the West.

India to cut back on Iran oil purchases: report India's two biggest importers of crude oil from Iran will cut shipments from the Islamic republic by at least 15 percent this financial year due to US pressure, a report has said.

Washington has been seeking to shut down Iran's oil trade to put pressure on the Persian Gulf nation to abandon its disputed nuclear programme.

Zhuhai Zhenrong Books May Fuel-Oil Shipment From Iran Zhuhai Zhenrong Co., the Chinese company censured by the U.S. in January for trading with Iran, provisionally hired an oil tanker to carry fuel oil from the Persian Gulf nation, shipping data showed.

Iran Embargo Impossible to Meet as Ships Need Its Oil Europe’s oil embargo on Iran is having unforeseen consequences in the shipping market, making it almost impossible to determine if vessels are using fuel that violates the sanctions.

Supplies from Iran are a “vital blending component” to make ship fuel, known as bunkers, according to Barclays Capital. The nation accounted for about 8 percent of bunkers exported last year to Asia, the largest market, and about a third of the supply at Fujairah in the United Arab Emirates, the Middle East’s biggest refueling port, Barclays estimates.

Pirates free gasoline tanker off West Africa LONDON (Reuters) - West African pirates have freed a gasoline tanker that was hijacked at the end of April and contact was reestablished with the crew early this morning, the ship's owner told Reuters on Friday.

The vessel is believed to have been hijacked for its cargo of gasoline, worth millions of dollars.

"We believe that was the purpose. Some of the cargo has been stolen," said Nick Fell, a spokesman for BW Maritime.

Kurt Cobb: The Oil Industry's Deceitful Promise of American Energy Independence Faced with increasing political obstacles to oil and natural gas exploration in many countries around the world, the oil industry is focusing again on the United States. The industry is using the deceitful promise of energy independence to cajole Americans and their policymakers into relaxing environmental regulations and opening protected public lands and restricted offshore areas to drilling.

Oil Supply and 'Peak Oil' Price Drivers Peak Oil can be defined at least four ways, but one way is simple: Peak Oil is when supplies and stocks are tight enough, relative to demand, to make price slides short and price hikes long. This will continue until and unless the economy tilts into recession through market forces, or by policy decision in response to either external or internal shocks.

Charlie Hales' Bookshelf Gloomier Than He Lets On "I'm not a doomer, but I do think the issue of Peak Oil is real," Hales went on. "You need good ideas from smart people. Kunstler is controversial and sometimes bombastic, but he has some good ideas. He's not right on everything. But he's got some good ideas."

Enbridge asks court to overturn N.B. gas regulations Enbridge Gas New Brunswick is asking the courts to overturn new regulations under the provincial Gas Distribution Act.

Otherwise, the company could lose more than $9.7 million a year and be forced to cuts its staff in half and reduce services in the province, it claims in documents file with the Court of Queen’s Bench.

Will you heat your home from methane hydrates? Maybe. WASHINGTON - Will the world be tapping methane hydrates deep in the permafrost and off the edges of continents decades from now? Part of the answer will rest with research in Alaska.

A day after the Department of Energy announced the results of a test at Prudhoe Bay that resulted in a steady flow of natural gas, researchers stressed that this was among many tests to come. The test was the first use of carbon dioxide to extract natural gas. It also was the longest test of methane hydrate extraction: 30 days.

TransCanada Applies for U.S. Permit on Portion of Keystone XL TransCanada Corp. has applied for a U.S. presidential permit for a portion of its Keystone XL pipeline from the Canadian border to Steele City, Nebraska.

Chesapeake Alone Forecasts Gas Rally for Recovery Chesapeake Energy Corp. Chief Executive Officer Aubrey McClendon is banking his turnaround of the industry’s biggest debtor on a rebound in natural-gas prices that no Wall Street analysts tracked by Bloomberg expect will happen.

A day after directors said they’ll strip him of the chairman’s role as they investigate potential conflicts of interest in his personal finances, McClendon laid out a plan to shrink a $12.6 billion debt pile, cut costs and remake the second-biggest U.S. gas producer into an oil company. At the core of his plan is a rebound in gas by 2014 to $5 per thousand cubic feet, more than double today’s level.

Fracked: Why Chesapeake Energy’s Aubrey McClendon is in Hot Water In two decades, Chesapeake — which describes itself as “America’s Champion of Natural Gas” — has grown from a handful of employees into the nation’s second largest natural gas producer (after Exxon Mobil), with 10,000 workers drilling vast tracts of land, and over $11 billion in revenue last year. But the company has been buffeted lately due to the dramatic decline in natural gas prices thanks to the discovery of huge fields of shale gas, which have flooded the market with supply. Natural gas prices have dropped 50% in the last year, recently hitting their lowest point since 2001, though they’ve edged up lately. Chesapeake Energy shares have fallen by 36% over the past year. In February, the company said that its revenues would fall over $2 billion short of expenses this year.

But while other producers have started to curtail production to ease the glut of gas on the market, Chesapeake increased production 18% in the first quarter even as the price as plummeted, according to The Wall Street Journal. That’s consistent with a massive bet that McClendon has engineered for Chesapeake that natural gas prices will go up, as Christopher Helman described in a Forbes profile of the CEO from last October.

Inside Chesapeake, CEO ran private hedge fund As chairman and CEO of Chesapeake Energy Corp, Aubrey McClendon has been a powerhouse in the vast U.S. natural gas market, directing the company's multibillion dollar energy-trading operation and setting output targets for America's second-largest producer.

Behind the scenes, a Reuters investigation has found, McClendon also ran a lucrative business on the side: a $200 million hedge fund that traded in the same commodities Chesapeake produces.

Gulf spill: Ex-BP engineer indicted on obstruction charges NEW ORLEANS – A former BP drilling engineer was indicted Wednesday on charges he deleted text messages that indicated the company's blown-out Gulf of Mexico well was spewing far more crude than BP was telling the public.

Wastewater Becomes Issue in Debate on Gas Drilling Vexed by declining revenue, officials of the Niagara Falls water utility seized on a new moneymaking idea last year: treat toxic waste from natural-gas drilling at its sewage-treatment plant once hydrofracking gets under way in New York State.

Accepting the waste would both offset the drop in revenue and help keep water rates down for customers in the economically strapped region, they reasoned.

But the thought of having fracking fluids trucked into the city, treated and discharged into the Niagara River frightened local residents, many of whom still recall the Love Canal environmental crisis of the 1970s. In a unanimous vote, the Niagara Falls City Council blocked the plan this spring by banning the treatment, transport, storage and disposal of drilling fluids within city limits.

Wastewater Jitters in New York New York already deals with waste from about 6,800 active vertical and horizontal gas wells upstate. Although these wells require just a fraction of the water that would be needed for fracking in the Marcellus, they still produce waste that needs to go somewhere.

Officials with the New York Department of Environmental Conservation say that in 2010, New York’s gas wells produced more than 23 million gallons of waste, 17 million of which stayed in New York. Most of it went to sewage treatment plants or was used for de-icing roads.

Romania gov't: moratorium on shale gas exploration Romania's new left-leaning government has pledged a moratorium on shale gas exploration and will review a controversial Canadian plan to build Europe's largest open-cast gold mine.

Shale Gas Hydraulic Fracking: Poisoned Water. Inducing Earthquakes Fracking techniques have been around since the end of World War II. Why then suddenly is the world going gaga over shale gas hydraulic fracking? One answer is that the record high oil and gas prices of the recent few years have made inefficient processes such as extracting oil from Canada’s tar sands or the costly fracking profitable. The second reason is the advance of various horizontal underground drilling techniques that allow companies like Schlumberger to enter a large shale rock formation and inject substances to “free” the trapped gas.

But the real reason for the recent explosion of fracking in the country where it has most been applied, the United States, is the passage of legislation in 2005 by the US Congress that exempts the oil industry’s hydraulic fracking activity from regulatory supervision by the US Environmental Protection Agency (EPA) under the Safe Drinking Water Act. The oil and gas industry is the only industry in America that is allowed by EPA to inject known hazardous materials -- unchecked -- directly into or adjacent to underground drinking water supplies.6

Majority of Canadians support increased oil production: poll According to an Ipsos Reid survey, two-thirds of Canadians believe the country can increase its oil and gas production without seriously harming the environment.

The poll, conducted on behalf of the Canadian Chamber of Commerce and released Thursday, also shows that Canadians living in different regions are split on Canada’s rise as a major energy producer.

BP Wins Delay of Gulf Oil Spill Trial A trial to assign blame and damages that could total tens of billions of dollars for the 2010 Gulf of Mexico oil spill has been put off until January, in a setback for the U.S. government, which wanted to try its case this summer.

How The Valdez Oil Spill Shaped ExxonMobil Steve Inskeep talks to Steve Coll about his new book, Private Empire: ExxonMobil and American Power. In it, Coll delves into the business model of one of the country's largest and most profitable corporations. He explores how the Exxon Valdez oil spill in 1989 shaped the culture at the company for years to come.

Japan’s Leaders Fret as Nuclear Shutdown Nears OSAKA, Japan — Barring an unexpected turnaround, Japan on Saturday will become a nuclear-free nation for the first time in more than four decades, at least temporarily.

Japan’s leaders have made increasingly desperate attempts in recent months to avoid just such a scenario, trying to restart plants shut for routine maintenance and kept that way while they tried to convince a skittish public that the reactors were safe in the wake of last year’s nuclear catastrophe. But the government has run up against a crippling public distrust that recently found a powerful voice in local leaders who are orchestrating a rare challenge to Tokyo’s centralized power.

As Japan swings away from nuclear power, higher oil dependency erases greenhouse-gas gains TOKYO — The Fukushima crisis is eroding years of Japanese efforts to reduce greenhouse gas emissions blamed for global warming, as power plants running on oil and natural gas fill the electricity gap left by now-shuttered nuclear reactors.

Court Urged to Order Decision on Nuclear Waste Site WASHINGTON — Two states with large amounts of military and civilian nuclear waste told a federal court panel on Wednesday that the Nuclear Regulatory Commission was flouting the law by declining to decide whether the Nevada desert is a suitable burial spot — even if the Obama administration says the storage plan is dead.

Is Yucca Mountain Still Dead? Yucca Mountain was chosen by Congress as the repository site in 1987. Its chief backers were senators from other states that were also under consideration as waste sites, including Texas and Washington. Nevada, lacking allies, could not stop it.

The initial choice had a thin veneer of science to it – Yucca was one of several sites under consideration mostly because it was remote and the government already owned it. Further scientific and engineering work, though, exposed substantial problems with the site.

When Flying 720 Miles Takes 12 Hours The major airlines have been paring service for much of the last decade. But their cutbacks accelerated three years ago as carriers merged, fuel prices spiked and the recession reduced demand for seats. Even after the economy started to recover and passengers came back, the big airlines did not restore many of their flights, particularly on routes to small airports, as they sought to bolster their profits.

The strategy has squeezed the regional airlines, whose purpose is to ferry passengers on behalf of the major airlines and provide the backbone of air service to the nation’s small airports. Three regional carriers have filed for bankruptcy protection since 2010, including Pinnacle Airlines in April.

So while airports in large metropolitan areas like New York, Chicago and Atlanta have emerged relatively unscathed from these changes, the smaller cities have borne the brunt.

Air France-KLM posts $483 million loss for Q1 PARIS — Air France-KLM posted a net loss of €368 million ($483 million) in the first quarter of the year, saying Friday that high fuel costs and a continued drop in cargo cut into its profits.

U.S. buyers turn away from high-mileage cars With fuel prices now showing signs of hitting their peak are U.S. car buyers shifting focus from the high-mileage models that were quickly gaining ground earlier this year?

That’s one possible conclusion based on data collected by the University of Michigan showing that the fuel economy of the average new vehicle purchased in the U.S. last month dipped slightly from March, when fuel prices seemed to be rising that just about every other day.

Ferrari, Rolls Royce among exotic cars selling fast in China Following years of torrid growth, the Chinese auto market suffered a rare, but very slight, downturn earlier this year. But, according to analysts at J.D. Power and Associates, that swoon did not affect the luxury car market, where sales plowed ahead.

Around the World on Solar Power On Friday, if all goes well, a sleek spaceship-like catamaran will glide into Hercule Harbor in Monaco after a remarkable 19-month journey around the globe.

Since it set sail from Monaco in September 2010, the Turanor PlanetSolar, the world’s largest solar-powered boat has crossed the Atlantic and the Pacific, passed through the Panama and Suez canals and stopped in Miami; Cancún, Mexico; Brisbane, Australia; Singapore; Abu Dhabi and many places in between.

First Solar racks up huge losses NEW YORK (CNNMoney) -- First Solar, a maker of photovoltaic panels that announced a massive restructuring last month, reported a quarterly loss of $5.20 on Thursday.

Uncertainty still clouds future of EU biodiesel BRUSSELS (Reuters) - Senior European Union officials failed on Wednesday to agree on how to measure the full climate impact of biofuels, prolonging uncertainty in a debate that threatens to wipe out large parts of Europe's biodiesel industry.

The talks followed warnings from scientists that using biodiesel made from European rapeseed and imported palm oil and soybeans does nothing to prevent climate change and could actually accelerate it.

Corn Ethanol: Growing Food, Feed, Fiber ... and Fuel? Most analysts agree that we are rapidly approaching “peak oil,” the point when the volume of global oil production begins to decline. In response, Farm Bill programs have promoted a shift to liquid “biofuels” and “biomass” energy derived from farms. The Renewable Fuels Standard of the Energy Independence and Security Act of 2007, for instance, boosted the country’s ethanol production by mandating that up to 36 billion gallons be blended into gasoline by 2022. But taxpayers have been investing in this industry for decades via corn subsidies, import tariffs, tax credits for every gallon of ethanol blended with gasoline, loan guarantees, construction cost-shares, and gas pump upgrades. For politicians and lobbyists, ethanol became a sacred cow, untouchable, because of the belief that these public investments would 1) support farmers, 2) reduce dependence on foreign oil (currently about 60 percent of U.S. oil consumption), 3) cut greenhouse gas emissions, and 4) strengthen national defense.

Commercial food waste to be banned Officials said the proposed rules, designed to save space in landfills and reduce emissions of gases that trap heat in the atmosphere, will make Massachusetts the first state with such a comprehensive prohibition on commercial food waste.

Their immediate goal is to divert a third of the nearly 1.4 million tons of organic waste produced every year in Massachusetts from landfills by the end of the decade. Instead, it would go to composting sites and a new generation of specially designed plants that convert waste into energy, heat, and fertilizer.

Infographic: What's Wrong with Our Food System? Around the world every night, one in seven people go to bed hungry—that's almost one billion people. People are hungry not because there isn't enough food produced but because our food system is broken. In fact, 80% of the world's hungry are directly involved in food production.

Third-deadliest U.S. food outbreak was preventable, experts say The auditor was James DiIorio, and he gave Jensen Farms a 96% score, and a "superior" grade. On the front page of his audit at the farm, DiIorio wrote a note saying "no anti-microbial solution" was being used to clean the melons.

Dr. Trevor Suslow, one of the nation's top experts on growing and harvesting melons safely, was shocked to see that on the audit at Jensen Farms.

"Having antimicrobials in any wash water, particular the primary or the very first step, is absolutely essential, and therefore as soon as one hears that that's not present, that's an instant red flag," Suslow said. The removal of an antimicrobial would be cause for an auditor or inspector to shut down an entire operation, he said.

"What I would expect from an auditor," Suslow said, "is that they would walk into the facility, look at the wash and dry lines, know that they weren't using an antimicrobial, and just say: 'The audit's done. You have to stop your operation. We can't continue.'"

A Former Chicago Meatpacking Plant Becomes a Self-Sustaining Vertical Farm Had Willy Wonka had been fascinated by industrial ecology instead of cocoa beans, his factory may have looked something like The Plant, Chicago’s first entirely self-sustaining "vertical farm."

The Plant occupies a former meatpacking plant and slaughterhouse in the Union Stock Yards, transforming a huge brick building that once specialized in bringing red meat to the masses into a green space all about urban farming without waste. The interior looks like something straight out of a scientific-environmental fantasy.

Rolls-Royce Joins Jupiter in U.K. Green Jobs Trade Plan in U.S. Britain’s Energy Minister Greg Barker is leading a delegation of companies ranging from Rolls-Royce Holdings Plc to Jupiter Asset Management Ltd. to the U.S. to identify business opportunities relating to low-carbon energy.

Bangkok swelters, sparks debate on city planning in Asia BANGKOK (Reuters) - Five months after the worst floods in half a century, the Thai capital is facing a heat wave with temperatures at three-decade highs, stoking debate over chaotic urban planning that blights many of Southeast Asia's overcrowded capitals.

The daily average high in Bangkok in April was 40.1 Celsius (104.2 Fahrenheit), the Meteorological Department says, prompting warnings from authorities for residents to be alert for heat-related ailments.

Critics say the heat has been exacerbated by poor urban planning in the fast-growing city of 12 million people - from a thinning of trees by city workers, often to accommodate electrical power lines, to heat-trapping building designs and a small number of parks.

U.S. Corporations Sponsor Carbon Scam in Europe BRUSSELS (IPS) - Major publicly traded U.S. corporations, including Dow Chemical, ConocoPhillips, Chevron and Cabot Corporation, have secured multi-million-dollar dubious carbon credits to compensate for their greenhouse gas emissions in Europe, as revealed in this investigative report.Dow scored the largest purchase volumes. The Michigan-headquartered giant owns dozens of CO2-venting plants producing plastics and chemicals in Germany, the Netherlands, Belgium, Spain and Poland. Altogether, those plants ranked 21st among the top 100 European buyers of certified emissions reduction certificates (CERs) that originated from questionable projects.

Report Points to Decline in Ability to Monitor the Earth Earth-observing systems operated by the United States have entered a steep decline, imperiling the nation’s monitoring of weather, natural disasters and climate change, a report from the National Research Council warned Wednesday. Long-running and new missions are frequently delayed, lost or canceled because of budget cuts, launching failures, disorganization and changes in mission design and scope, the report said.

What Kenya and Peru Can Teach the United States About Fighting Climate Change The plans that these countries are putting into place aren’t perfect, of course, and they’ll require work and oversight to become reality. But unlike the U.S. Congress, the governments of these countries are making progress, and overcoming similar obstacles to the ones America faces. Countries like Mexico and South Korea produce huge amounts of greenhouse gas, just like the United States, and it’s difficult for business to see a different way. In South Korea, industries that will have to change their ways under a cap-and-trade system fought against the proposal, just as they did here.

Sea-level rises 'may not be as high as worst-case scenarios have predicted' Sea-level rises are unlikely to be as high as worst-case scenarios have forecasted, suggests new research which shows that Greenland's glaciers are slipping into the sea more slowly than was previously thought. But the scientists warned that ice loss still sped up by 30% and is driving rises in sea levels that endanger low-lying coasts around the world.

European climate change to hit Scandinavia and south hardest Global warming in Europe this century will mostly affect Scandinavia and the Mediterranean basin, the European Environment Agency warned on Thursday.

"The highest warming is projected over the eastern Scandinavia, and southern and south-eastern Europe," experts at the agency said in comment accompanying a series of maps posted on the agency's website.

Peak oil move over - now solve CO2: Gerard Wynn The world may have found a sticking plaster, at least, to peak oil with rising production of offshore crude, onshore tight oil, shale gas and tar sands, but increased output of such fossil fuels conflicts with the goal of limiting climate change.

Renewable energy grew faster in percent consumption than any other energy source in 2010, but only from a lower base: in absolute terms, growth was dwarfed ten-fold each by coal and natural gas, and five-fold by oil, show data from the energy firm BP.