NOTE: With the demise of The Oil Drum I’ve decided to put a current event feed here under the name, “Monday Mayhem” which will run once or twice a week … not just on Monday. If there is interest and after the burial of TOD, the term ‘Drumbeat’ or some variation thereto might or might-not be applied. There might also another catchy term.
US Oil Demand Peak was in 2007
Detroit’s Motown legacy has put the spotlight on the vulnerability of the American car culture. Despite an oil shale boom and years of money printing US oil demand has hit a wall. (Crude Oil Peak)
No, Peak Oil Really Is Dead
... the core of the Peak Oil hypothesis could be summed up as: sometime in the not so distant future we need to put some effort into finding new oil extraction techniques. (Forbes)
As Fracking Rises, Peak Oil Theory Slowly Dies
And so it should surprise no one that The Oil Drum, a site devoted a theory based on lack of imagination and growing irrelevance among prevailing thought around the oil and gas industry, was unable to sustain a critical mass of interest and will soon be closing its proverbial doors. (Forbes)
The receding threat from 'peak oil'
The IEA's head of oil markets, Antoine Halff, says forecasts have had to be repeatedly revised upwards in the past two years. (BBC)
The Peak Oil Crisis: A Summer Review
The financial press of course starts from the unstated premise that any limitation on availability of natural resources, be it fossil fuels or the capacity of the atmosphere to absorb any more emissions without triggering off devastating consequences, could be bad for economic growth and stock prices. (Tom Whipple)
Has Peak Oil Been Vindicated Or Debunked?
America's oil boom hasn't pushed U.S. oil prices back down to mid-aughts levels and it certainly hasn't pushed U.S. oil prices back down to 1990s levels. The good old days of genuinely abundant liquid fuel really do appear to be behind us. (Matt Yglesias/Slate)
Reports of the Death of Peak Oil Have Been Greatly Exaggerated
Crude oil production has been almost flat over the past decade, and the likely date of the overall global peak is sometime between now and 2020. After that, we'll be in irrevocable decline. (Kevin Drum)
World Oil and Gas Production Forecasts Up to 2100
-- Jean Laherrére
There is a huge difference between the political/financial proved reserves in brown, which has always increased since 1947, and the confidential technical 2P reserves in green, which has been decreasing since 1980. This graph explains why most economists do not believe in peak oil. They rely only on the proved reserves coming from OGJ, EIA, BP and OPEC data, which are wrong; they have no access to the confidential technical data. Economists ignoring peak oil do not think wrong, they think on wrong data! (The Oil Drum)
Peak oil isn’t dead; it just smells that way
When prices are high, as they are now, those who only understand price look at it as evidence that the peak oil explanation has some merit. But price is fickle. When prices crashed into the $30s per barrel at the end of 2008, everybody was writing about how it was proof that the peak oil theory was wrong. (Chris Nelder)
Harper, Johnston to attend Lac-Megantic memorial mass Saturday
Quebec City Mayor Regis Labeaume called on the authorities to build a new train track near Lac-Megantic so that local businesses can recover from the tragedy. (CTV News)
Lac-Mégantic mulls legal action over $4M in cleanup costs
The town of Lac-Mégantic is considering options including legal action against the railway behind the fatal derailment, because the company has ignored pleas to reimburse the $4 million the town has spent so far on cleaning up. (CBC News)
Lac Megantic: Don't Blame the Engineer
Starting back in the 1970s, the US government deregulated rail transport, allowing deep staff reductions, the removal of brakemen from trains and lower safety standards for shipping hazardous materials. Canadian governments followed suit and allowed the railways to self-regulate safety standards and continue to ship oil in the older, accident-prone tanker cars of the kind that crashed into Lac-Mégantic. (Huffinton)
Why Chevron is suing one of D.C.’s most powerful lobbying firms over…the Amazon jungle?
“You would think it would be difficult for an oil company that contaminated a Rhode Island-size swath of the Amazon to portray its opponents as brigands and pirates ... ” (Washington Post)
Why Big Oil is Shifting Away from the Gulf of Mexico
Apache unloaded its assets to Fieldwood Energy, an entity held by Riverstone Holdings LLC. Fieldwood CEO Matt McCarrol said his company would take over where Apache left off, adding his company was "very enthusiastic about the opportunity to continue this legacy going forward." (Oilprice)
Hercules Jackup Suffers Loss of Well Control in U.S. Gulf of Mexico
According to a statement today by the Bureau of Safety and Environmental Enforcement (BSEE), the rig was doing completion work on a sidetrack well to prepare it for production. (gCaptain)
BG Says Qatar to Start LNG Supplies in July to Counter Egypt
BG Group Plc (BG/), the U.K.’s third-largest natural-gas producer, said Qatar will begin liquefied natural gas supplies at the end of July to counter lost volumes from Egypt after diversion of the fuel to the domestic market. (Bloomberg)
Dynagas Takes Delivery of Two Ice-Class LNG Carriers at HHI
Dynagas, the liquefied natural gas (LNG) shipping arm of the George Prokopiou shipping enterprises, has today taken delivery of Arctic Aurora, the second of two ice-class membrane LNG tankers, during a ceremony at Hyundai Heavy Industry (HHI) Ulsan shipyard, Korea. The first, Yenisei River, was delivered yesterday. (gCaptain/Lloyds)
Golar LNG Receives Over $1B in Financing for 8 Newbuilds
In Golar’s presentation at Marine Money week this summer, they note that their newbuilding plan is such that these vessels are delivered before global LNG liquefaction ramps up to full capacity over the coming years. (gCaptain)
Kirby Says Crude Shipments Unaffected By Higher U.S. Oil Prices
U.S. oil prices traded at a discount to London's Brent of more than $23 a barrel in February, but that discount has narrowed to less than $3 a barrel. That cuts profits from crude shipments via rail or barge, more expensive options than pipelines. (Reuters)
Gas well on fire in Gulf of Mexico, 44 evacuated
UPDATE: The rig is now collapsing. WWLTV reports that, "Walter Oil & Gas is hiring a jack-up rig to start drilling a relief well at the site." (Treehugger)
Hercules Jack-Up Rig Fire is Out
The Bureau of Safety and Environmental Enforcement (BSEE) is currently returning from their tour of the incident scene and our source indicates that the fire from the well is out and a clean-up plan is in progress. This would indicate that the well has caved in and sealed itself downhole, effectively removing the fuel source from the blaze. (gCaptain)
Höegh to Conduct Pre-FEED Study on Barge-Based FLNG Concept
A near-shore FLNG concept such as this would tap into the existing U.S. natural gas pipeline infrastructure, liquefy the gas, store in on board, and then transfer it to an LNG carrier for shipment worldwide. (gCaptain)
China: A Shift from Industrial Commodity Demand to Agricultural Demand
China’s stated policy for the past 15 years was to be self-sufficient in the production of three crops: corn, rice and wheat. It’s becoming clear that policy has been abandoned. China is becoming non-self-sufficient in grains and even rice. China represents 20% of the world’s population, but it only has 7% of global arable land. Increased urban and industrial development has substantially reduced the amount of per capita cropland. Chinese cropland erosion is resulting in soil loss of 40 tons per hectare each year, 4 times the erosion estimated in the U.S. and Europe. (Jay Goodgal)
China's Bad Earth: Industrialization has turned much of the Chinese countryside into an environmental disaster zone, threatening not only the food supply but the legitimacy of the regime itself.
Estimates from state-affiliated researchers say that anywhere between 8% and 20% of China's arable land, some 25 to 60 million acres, may now be contaminated with heavy metals. A loss of even 5% could be disastrous, taking China below the "red line" of 296 million acres of arable land that are currently needed, according to the government, to feed the country's 1.35 billion people. (WSJ)
(What? Is the Wall Street Journal suggesting that American-style industrial development without limits might not be all-good?)
"Chinese dream" education campaign debuts
An education and publicity campaign related to the "Chinese dream" debuted on Tuesday, with Environment Minister Zhou Shengxian delivering a lecture on environmental protection.
Zhou said China must attach equal importance to economic development and environmental protection, adding that preventing the degradation of air, water and soil quality must be prioritized. (Xinhua)
Party propagandists impose 'China Dream' on skeptical public
Skepticism is rife online, where micro-blog users share jokes that the real Chinese Dream is to secure a green card in the USA. (USA Today)
Anchored in Seattle, Adrift in Beijing
The Chinese Dream is the pet catchphrase of China's new leader, Xi Jinping, who in March used it nine times in his inaugural speech to the National People's Congress, and since then repeated it in international confabs and in meetings with Taiwanese officials. Deliberately vague, the central tenet is that the wealth and power of the nation (is) to be achieved through the collective effort of the Chinese people under the leadership of the Communist Party. (Caixin)
Ice-free Arctic in two years heralds methane catastrophe – scientist
Professor Peter Wadhams, co-author of new Nature paper on costs of Arctic warming, explains the danger of inaction
A new paper in the journal Nature argues that the release of a 50 Gigatonne (Gt) methane pulse from thawing Arctic permafrost could destabilise the climate system and trigger costs as high as the value of the entire world's GDP. The East Siberian Arctic Shelf's (ESAS) reservoir of methane gas hydrates could be released slowly over 50 years or "catastrophically fast" in a matter of decades – if not even one decade – the researchers said. (Guardian, UK)
Greenland Melting
But Box decided to return to Greenland this summer – his 24th trip here in the past 20 years – to test a more startling hypothesis, part of what he calls “a unified theory” of glaciology: that tundra fires in Canada, massive wildfires in Colorado and pollution from coal-fired power plants in Europe and China had sent an unexpectedly thick layer of soot over the Arctic region last summer, which settled onto Greenland’s vast frozen interior, increasing the amount of sunlight the snow and ice absorbed, which in turn accelerated the melting. (Rolling Stone)
Norilsk breaks records for Arctic heat in a new sign of changing weather patterns
Norilsk has hit 32C in recent days with some forecasts predicting a blistering 35C by the weekend as the Arctic competes with the Mediterranean. The tundra turned hot as the Kransnoyarsk region industrial city - where foreigners are restricted from visiting - smashed records for heat established in 1979. (Siberian Times)
Deforestation in Australia killing and mutilating koalas – Loggers say finding dead koalas is ‘like a daily thing, sometimes a couple every hour’
No one is taking full responsibility for the koala. It's a native icon but everyone is saying it's someone else's job. The government has allowed industry to completely self-regulate. (Guardian UK/Desdemona Despair)
Texas oilman, fracking pioneer Mitchell dies at 94
Billionaire Texas oilman, developer and philanthropist George P. Mitchell, considered the father of fracking, died Friday at his home in Galveston, his family said. He was 94. (USA Today)
A Tale of Two Cities: Oil Drilling and Fracking in Northern Colorado
In Loveland, an anti-fracking group turned in enough petitions to put a two year ban on fracking within the city limits on this year’s ballot. In an unrelated effort, the Loveland city council is working on new rules on buffer zones around drilling sites. But just down the road in Greeley, city officials approved 18 new oil and gas well sites, nearby a school. (CBS Denver)
Industry Pressure Shuts Down EPA Fracking Investigations, Watch our Ring of Fire interview
One of the main obstacles the EPA was forced to overcome in order to even conduct the cursory investigations came from within the government itself, in the form of noted climate change skeptic and the dirty energy industry’s favorite senator: James Inhofe. (Smog Blog)
Crude Oil Inventories Decline at Record Rate
Inventories declined for three reasons: (1) an increase in U.S. refinery runs; (2) a decrease in crude oil imports; and (3) an increase in backwardation (a reduction in price for future months) on the West Texas Intermediate (WTI) futures price curve that has encouraged reducing inventories rather than buying crude at current market prices. (EIA)s
(Chart: EIA, click on for big)
MARKET WATCH: WTI-Brent spread narrows sharply
Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said, “A large part of the narrowing of this spread…is attributable to WTI strength, premised on growing US demand optimism and strong drawdowns of US crude oil inventory levels (especially Cushing, Okla., inventories). (Oil and Gas Journal)
BG Group still on track with projects as output declines
(Natural gas producer) BG Group insisted it was on track to deliver projects in Australia and Brazil on time and budget and push on to sanction further investments, although quarterly profits were trimmed by falling oil prices and output. (FT)
How The Energy Industry Should Respond To HBO's Thoroughly Refuted 'Gasland II'
While there is much the oil and gas industry can do to counter Gasland now, its job would have been 10 times easier had it properly educated the public about shale energy technology-aka “fracking”-before publicity-seeking individuals like Fox got their hands on it. (Forbes)
Va. Power watching first U.S. wind energy lease sale
Dominion Virginia Power, the state’s largest electric utility, will bid Sept. 4 to develop commercial wind turbines in the Atlantic Ocean about 25 miles from Virginia Beach. (Richmond Times-Dispatch)
IMF fears Fed tapering could 'reignite' euro debt crisis
"There is a high risk of stagnation, especially in the periphery. Such an outcome could push the periphery toward a debt-deflation spiral," (the IMF) said. (Ambrose Evans-Pritchard)
Political Dreaming in the Twenty-First Century
In 1963, when Dr. King gave the nation permission to share our dreams, few could have imagined how radically the political and cultural landscape would be reshaped by new myths within just a few years. (Tom Dispatch)
Last year's collapse in natural gas prices appears to be over:
(EIA/Stuart Staniford)
Two Faux Democracies That Threaten the World
Amitai Etzioni has raised an important question: “Who authorized preparations for war with China?” (Paul Craig Thomas)
Who Authorized Preparations for War with China?
The United States is preparing for a war with China, a momentous decision that so far has failed to receive a thorough review from elected officials, namely the White House and Congress. (Yale Journal of International Affairs)
Is the Pentagon preparing for war with China?
It’s important for Filipinos to be aware of the probability of war between the United States and China because the Spratlys may be the flashpoint in such a development. (Philippine Daily Inquirer).
Jimmy Carter Defends Snowden and Says, "America does not have a functioning democracy."
According to Der Spiegel, former President Jimmy Carter railed against NSA surveillance and defended whistleblower Edward Snowden at a closed-door affair in Atlanta.
The German publication reports that Carter – while speaking at "Atlantik-Brücke" in Atlanta – sharply criticized government surveillance and the current state of American democracy in terms that went much farther than any of his previous critiques. (Daily Kos)
Fukushima trench water crisis returns
The latest sample, taken Friday from a trench, contained 750 million becquerels of cesium-134, 1.6 billion becquerels of cesium-137 and 750 million becquerels of other radioactive substances, the utility said.
A sample from April 2011 contained 1.8 billion becquerels of both cesium-134 and cesium-137 per liter. Cesium has a half-life of about 30 years. (Japan Times)
Radioactive Water Detected at Fukushima
The radiation is millions of times higher than Japan's acceptable limit under normal circumstances. (WSJ)
Steam Found Near the Central Part of the Fifth Floor (Equipment Storage Pool Side) of Unit 3 Reactor Building at Fukushima Daiichi Nuclear Power Station
... there was a difference between the nitrogen injection amount (16m3/h) and the extracted amount (13m3/h) of the RPV and the PCV. Therefore, the gas including this difference amount of water vapor (approx. 3m3/h) is likely to be leaked from the head of the PCV, etc. (Tepco)
Delay in Disclosing Leaks at Fukushima Is Criticized
“This poor communication program gives the impression of a lack of an effective decision-making process, a lack of ability of keeping the people of Japan informed, and it brings into question whether Tepco has a plan and is doing all it can to protect the environment and the people,” said Dale Klein, a nuclear expert who heads a committee hired by the utility to recommend changes in its corporate culture. (Hiroko Tabuchi-NYTimes)
US Disappointed in Yemen Journalist's Release
The United States expressed disappointment Wednesday in the release of a Yemeni journalist who rights groups say was detained because of his reporting on al-Qaida and alleged U.S. complicity in attacks in Yemen. (ABC News)
Qatar-funded Syrian rebel brigade backs al Qaeda groups in Syria
The Islamic State of Iraq and the Levant has already claimed that the Free Syrian Army, the darling of US policymakers, has sold the ISIL arms. Although the claim cannot be confirmed, it certainly isn't difficult to believe, given that al Qaeda's affiliates have fought alongside Free Syrian Army units numerous times in the past. (Long War Journal)
IMF and US worry Argentine debt default case may complicate debt relief for other countries
A years-long court battle in New York could have major implications for the world’s financial system as investors seek to recover unpaid debts from Argentina’s massive 2001 default.
Global finance officials fear a victory by creditors could make it more difficult to put together an international financial rescue package like the one that pulled the Greek economy from the brink of collapse in the past few years. (WaPo)
At least 65 killed as nation’s military fires on protesters
The Muslim Brotherhood, which supports Morsi, put the toll higher than the state’s account, saying that at least 120 people were killed and thousands were injured when police and plainclothes men opened fire with live ammunition and tear gas on demonstrators who had expanded their protest onto two major highways. (WaPo)
U.S. Now Blamed for Undermining and Supporting Egypt's Coup
The reality is that the United States doesn't want to jeopardize its influence in Egypt by siding with one group or another. That was plainly clear as White House and State Department officials went through a series of rhetorical gymnastics in recent days to avoid calling the military's ouster of Morsy a coup. (Foreign Policy)
Detroit bankruptcy case could bring unwanted change for muni market
Detroit Emergency Manager Kevyn Orr said that the city is treating its limited and unlimited-tax General Obligation bonds as unsecured debt, except for those backed by liens on state aid. (CNBC)
Michigan AG to defend public pensions, state constitution in Detroit bankruptcy filing
Invoking his role as “the people’s attorney,” Schuette said he will file in U.S. Bankruptcy Court in Detroit on Monday to intervene in the city’s federal bankruptcy proceedings, even after his office opposed efforts in a state court earlier this month to halt the bankruptcy filing in challenges brought by pensioners and lawyers for the city’s pension funds.
“The City of Detroit’s bankruptcy will cause even greater hardship for many people in southeast Michigan who are already struggling,” Schuette said. (Detroit Free Press)
The QE repo distortion is uncharted territory for funding markets
Scott Skyrm noted on his blog earlier this week that it took only six months of Fed QE purchases to move GC (Repo) rates from an average of 0.24 per cent in December 2012 to an average of 0.05 per cent this month.
There is, consequently, a growing distortion in the short-term funding markets, which is clearly one of the first unintended consequences of the QE programmes to surface ... (FT Alphaville)
The Fed hoovers collateral until all the good stuff is gone ...
Detroit's new CFO Jim Bonsall brings tough management style to Motor City
Jim Bonsall, Detroit’s new chief financial officer, is a no-nonsense, hard-nosed corporate turnaround expert who expects people to meet deadlines.
He will need that toughness as he works to improve the city’s finances and operations, starting with reform of tax and unpaid bill collections, he said in an exclusive Free Press interview Tuesday. (Detroit Free Press)
Shades of Greece and Italy.
Spain Levies Consumption Tax on Sunlight
Proving that idiocy truly has no bounds, Spain issued a "royal decree" taxing sunlight gatherers. The state threatens fines as much as 30 million euros for those who illegally gather sunlight without paying a tax.
The tax is just enough to make sure that homeowners cannot gather and store solar energy cheaper than state-sponsored providers. (Mish)
Popularity of home solar panels challenges utilities
Alarmed by what they say has become an existential threat to their business, utility companies are moving to roll back government incentives aimed at promoting solar energy and other renewable sources of power. At stake, the companies say, is nothing less than the future of the US power industry. (Boston Globe)
Mojave Mirrors: World's Largest Solar Plant Ready to Shine
At 377 megawatts (MW), Ivanpah's capacity is more than double that of the Andusol, Solnava, or Extresol power stations in southern Spain, which previously were the largest in the world (150 MW each)
European Union Reaches Agreement With China — Solar Panel Trade Dispute Resolved
The European Union and China have come to terms with regard to their recent trade dispute over solar panels — Chinese solar panel imports to the EU will now be subject to a minimum price limit somewhere around spot market prices. The deal should put to rest any potential worries about a larger trade war erupting between the two economic superpowers within the near future. (Clean Technica)
The Geopolitical Impacts of the U.S. Tight Oil Boom: Implications for OPEC and the U.S. Strategic Posture – Bipartisan Policy Center (video of panel discussion)
- Risk of a decline in crude prices. If price falls too low continued growth of production would end.
-- Ed Morse
NOTE: If you haven't done so already, hurry up and subscribe to Jim Hansen's excellent Master Resource Report, published weekly. A data-rich analysis of petroleum energy trends. Send an E-mail to jim.hansen -at- kmsfinancial.com with 'subscribe' in the subject line.
Crude Oil Inventories Decline at Record Rate
Inventories declined for three reasons: (1) an increase in U.S. refinery runs; (2) a decrease in crude oil imports; and (3) an increase in backwardation (a reduction in price for future months) on the West Texas Intermediate (WTI) futures price curve that has encouraged reducing inventories rather than buying crude at current market prices. (EIA)