Supporters of Egypt's Islamist President Mohamed Morsi rally near Cairo University in Giza, Egypt, Tuesday. Egypt's control of the Suez Canal is where it makes its presence known on global oil markets. (Manu Brabo/AP)

Why oil prices rise on Egypt unrest (+video)

By David J. Unger, Correspondent / 07.03.13

Unrest in a country lacking significant oil exports has startled global markets. 

Oil prices jumped as high as $105 a barrel in London Wednesday as protesters gathered in the streets of Egypt's capital, demanding the ouster of Egyptian President Mohamed Morsi. It's the first time oil has passed $102 a barrel in over a year.

Egypt isn't among the Middle East's major oil countries, but it controls the Suez Canal, a vital choke point in the worldwide distribution of petroleum resources. That, along with the threat of protests spreading elsewhere, has investors worried.

Production booms elsewhere may temper those fears, keeping price spikes at bay. But US drivers who have enjoyed a steady decline in gas prices over the past months may see that decline temporarily slow or even reverse. 

"In the bigger picture, there’s adequate oil supply to meet global demand, especially as we see increases in North America, Iraq, Russia, and the return of oil in Sudan," energy consultant Andrew Lipow, president of Houston-based Lipow Oil Associates, said in a telephone interview. "Should a new [Egyptian] government come in place and the unrest dissipate, then I expect them to fall as rapildly as they’ve risen."  ( Continue… )

Vehicles are reflected in a sign advertising unleaded gas for $2.99 at a QuikTrip station at the corner of Woodruff Rd. and Verdae Blvd. on Monday in Greenville, S.C. Drivers will likely enjoy July 4 gas prices below $3.50 in many parts of the country this week. (Rainier Ehrhardt/AP)

Fourth of July travel: Gas prices drop for Independence Day (+video)

By David J. Unger, Correspondent / 07.03.13

Fourth of July revelers have another reason to enjoy their time off this weekend. Gas prices are falling just in time for the Fourth of July weekend.

That should come as some relief to the millions of Americans expected to crisscross the country in commemoration of Independence Day. Whether the savings last depends on the future of unrest in the Middle East and the intensity of hurricane season.

"If we see some price spikes, it will be because of hurricane season, much more than the Middle East, the dollar, or the economy," Tom Kloza, chief oil analyst for GasBuddy, a gas prices website, said in a telephone interview. "But obviously, if the economy goes down the toilet, prices for all commodities will come under pressure.

Average US gas prices dropped just a hair below $3.50 a gallon this week, according to the US Energy Information Administration (EIA). At $3.496, the average gas price is down eight cents from last week. That's still 14 cents higher than last year's Independence Day and the third highest July Fourth on record, according to Mr. Kloza. ( Continue… )

President Barack Obama and First Lady Michelle Obama wave as they enter State House accompanied by Tanzanian President Jakaya Kikwete, unseen, in Dar es Salaam, Tanzania Monday. Mr. Obama's $7 billion investment in African clean energy aims to double access electricity across six countries. (Ben Curtis/AP)

Obama pledges $7 billion for clean energy in Africa

By Joao Peixe, Guest blogger / 07.02.13

During his three country tour of Senegal, South Africa, and Tanzania, US President Obama has unveiled the Power Africa initiative, in which he has pledged $7 billion of investment over the next five years to increase energy production and access to energy across the sub-Saharan region.

The goal is to double access to electricity across six countries that Obama’s administration has selected for their promotion of good governance; Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.

Africa as a continent and economic region is growing rapidly, and US companies see great potential. The US Trade Representative claims that in 2011 the continent imported $21 billion of merchandise from the US, up 23% on the year before; whilst exports to the US were up 14% to $74 billion, with most of the being oil.

Obama understands that Africa has huge potential to grow, but lacks the financial backing. His new initiative will focus on supplying Africa with the means to support itself, rather than just handing over money to stem the problems for a short while.  ( Continue… )

In Dar es Salaam Tanzania, Obama heads a soccer ball at Ubungo Power Plant Tuesday, July 2, 2013. The ball has internal electronics that allows it to generate and store electricity that can power small devices. (Jason Reed/Reuters)

Tanzania: Obama kicks soccer ball, generates power

By David J. Unger, Correspondent / 07.02.13

President Obama kicked a soccer ball in Tanzania Tuesday, but it was more than just a soccer ball.

The so-called Soccket ball dribbled by the president captures kinetic energy that can later be used to power a light or charge a cell phone. It's the kind of innovative technology some hope can bring electricity to rural parts of Tanzania and other developing countries where traditional power grids are far from reach.

Mr. Obama, who played soccer as a child in Indonesia, used the ball to underscore his $7 billion plan to improve energy access across Africa.  

"I thought it was pretty cool," Obama said after batting the ball about, dressed in a buttoned-up suit jacket and tie. "You can imagine this in villages all across the country."  ( Continue… )

Tugs slowly move the Noble Frontier Driller into port at Signal East Shipyard in Pascagoula, Ms. (Rusty Costanza/The Times Picayune/AP/File)

Why oil and gas drilling is going deeper and further offshore

By Lou Gagliardi, Guest blogger / 07.02.13

Majority of Global Oil Reserves in Areas of Geopolitical Risk

The last two weeks I have been writing about deepwater oil and gas exploration and the trend to push out into deeper waters further offshore. This week I wanted to drill deeper into the drivers of this important exploration and production trend in the oil and gas industry.

Against a backdrop where 43% of global oil production is  in high risk regions — the Mid-East and Africa account for 32.5% and 10.9%, respectively — and add on top of that another 16% from Russia and Venezuela, you have nearly 60% of world oil production in areas of high geopolitical risk. Looked at from another perspective, National Oil Companies control roughly 75% of proven crude oil reserves (probability that 90% of the reserves will come to production), with the remainder held generally by multinationals – IOCs.

Clearly, the hydrocarbon (oil and natural gas) pie is limited to a few players and the IOCs – and the eight Majors have a dwindling share of that pie. Couple that reality with the fact that worldwide oil production for the eight majors (ExxonMobil, Shell, BP, Chevron, ConocoPhillips, ENI, Total, and Statoil) since 2004 has declined 2% per annum, and although revenues have increased 9% over the comparable period, margins are shrinking due to production costs increases of 11%. In addition, the IOC’s global oil reserve replacement — the ability to replace production — from 2004 to 2012 was a dismal 78%. In other words, for every 100 barrels of production the IOCs replaced 78 barrels. The net result is that the IOCs have little recourse but to explore for oil deposits in highly difficult regions.  ( Continue… )

President Barack Obama wipes sweat from his head during a speech on climate change last week at Georgetown University in Washington. (Evan Vucci/AP/File)

Obama climate plan: the one thing you need to know

By Kurt Cobb, Guest blogger / 07.01.13

The one thing you need to know about President Obama's plan to address climate change is that the most it will accomplish is slowing very slightly the pace at which the world is currently hurtling toward catastrophic climate change. Having said this, his plan is nonetheless a brave and even historic move in a country whose political campaigns and public discourse have been utterly poisoned by the science-free propaganda of the fossil fuel industry.

I would be more enthusiastic about the president's baby steps if the devastating droughts and floods and swiftly melting ice in the polar regions and mountain glaciers weren't telling us that drastic action is necessary right now. Nature doesn't really care about the timetables of politicians or about what is politically feasible. Nature doesn't negotiate, and it doesn't compromise. The laws of physics and chemistry cannot be repealed or altered by the Obama administration, the United States Congress or any other body. And, these physical laws are deaf to complaints about the negative economic consequences of addressing climate change--consequences that will be far worse if we do nothing about climate change.

But let me return to the goal announced by the president and put his plan into perspective. Using existing executive powers--mostly through the U.S. Environmental Protection Agency which the Supreme Court affirmed in 2007 has the power to regulate greenhouse gases--the Obama Administration will endeavor to reduce the RATE of greenhouse gas emissions in the United States to 17 percent below the RATE in 2005 and do this by 2020. It's a relatively easy target because half the reduction has already taken place. In recent years electric utilities have been changing from coal to cheaper and cleaner-burning natural gas to fuel their plants, and drivers, stung by unemployment and high gasoline prices, have reduced their driving.  ( Continue… )

Maria Wieser, of Italy, takes a drink of water while sightseeing in Death Vally National Park Friday in Badwater, Calif. Utilities recommend turning off unnecessary lights, postponing major appliance use until after 6 p.m., and turning air conditioners up to 78 degrees, or using a fan instead. (Chris Carlson/AP)

Heat wave tests California power grid. Why no blackouts so far?

By David J. Unger, Correspondent / 07.01.13

An oppressive heat wave strained California power plants through the weekend and into Monday, as overheated residents blasted fans and air conditioning to keep cool in record temperatures.

It's the grid's first major test of summer's spiking energy demand, and so far it seems to be passing. Improved grid technology and better communication of energy use have helped prevent any major blackouts so far. But the permanent closing of one major nuclear plant last month and the temporary shutdown of another last week further complicates the stress of summer's high temperatures, and utilities remain on high alert.

"Over time they’ve added transmisson to the grid," Jeff Roark, senior project manager at Electric Power Research Institute, said in a telephone interview, "as well as technology that provides info on what’s happening on the grid. Those devices are providing new information of the type that utilities didn’t have before." 

The improved information technology is helping customers as well. Utilities can now provide realtime demand information to consumers online and send out alerts via mobile phones and social media. That helps spread the call for efficiency during times of peak demand.  ( Continue… )

A drilling rig is set up near a barn in Springville, Pa., to tap gas from the giant Marcellus Shale gas field. (Alex Brandon/AP/File)

How to reap the rewards of the shale gas boom

By Jennifer Warren, Guest blogger / 06.30.13

Unique Energy Opportunity if Smart Policies Continue

In the early part of 2008, I began delving into the big story of the day in North Texas and Dallas, the prolific activity from the recovery of natural gas in the Barnett Shale. At the time, other shale plays were being explored as well, such as the Fayetteville play that confirmed the Barnett’s results; the Marcellus was just being sized up. I was challenged with attempting to figure out how to communicate what shale could be physically described as — in essence, a dead ocean from a geologic perspective.

Three things came together that gave tailwinds to today’s “shale revolution.” One was that the government stepped out of the way after many decades of nearly regulating natural gas out of existence. It had created artificially low gas prices, which killed production and confidence in the market until the 1980s and ’90s. The second force was the entrepreneurial spirit in oil and gas exploration, which presides in Texas. A powerhouse of expertise exists here, and these newfound unconventional gas production techniques and know-how spread to the rest of the country and the world. For producers, it was their Google moment.

And finally, technological advances in drilling technology —hydraulic fracturing and horizontal drilling— combined in the Barnett with independent producers’ experimentation, the innovators like Trevor Rees-Jones of Chief Oil and Mitchell Energy. Their efforts, and those of other operators in the 1980s and ’90s, paved the way for the U.S. gas revolution and its ripple effects across the globe. It was the right combination of economics, opportunity and efforts coming together.  ( Continue… )

A crew works on a drilling rig at a well site for shale based natural gas in Zelienople, Pa. (Keith Srakocic/AP/File)

Just how much shale gas does the UK have?

By Nick Grealy, Guest blogger / 06.29.13

Let the original UK shale gas expert, established  August 2008, run you through some numbers. There’s an all you can eat buffet of “expert” words special today in the restaurant of ideas. 

The average use of a UK gas consumer is 16,500 kWh

There are approximately 10.5 kWh in one cubic meter

The average home thus uses 1,571 cubic meters

UK gas consumption is divided into three equal parts: Electricity generation, heating and industrial use.  ( Continue… )