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… )
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… )
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.
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"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… )
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… )
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… )
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."
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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… )
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… )
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… )
The House Energy and Water Appropriations subcommittee voted this week on an energy appropriations bill that decimates federal investment in clean energy innovation in the name of prioritizing funding for national security and economic growth. This bill presents the harshest proposed cuts to energy innovation programs in the last two years, cutting total funding for key Department of Energy offices by nearly 20 percent from already-sequestered FY2013 levels.
To make matters worse, the most significantly impacted programs under the proposal are arguably the most important efforts for ensuring the future growth of clean energy in the United States. The legislation cuts the Office of Energy Efficiency and Renewable Energy (EERE) budget by 43 percent from FY2013 levels under sequestration, or nearly 65 percent from the President’s requested levels for FY2014. EERE’s responsibility as the “connective tissue” of the U.S. energy innovation ecosystem, as well as its efforts to enable and develop an advanced manufacturing sector in the United States would likely be derailed by such significant funding cuts.
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The proposal also calls for combining the programs within the Office of Electricity Delivery and Energy Reliability (OE) with those at EERE. Lack of specific details within the legislation prevent a full understanding of which projects within the two offices might be cut or eliminated, however it is clear that the proposal, which funds both EERE and OE at $982 million, would be a 67 percent cut from the President’s FY2014 request for the combined budgets ($2.9 billion). ( Continue… )
The British Geological Survey released a report on Thursday that provided a revised estimate for shale gas resources in the North of England. The new estimate is double the old one.
The shale formation, known as the Bowland shale formation has been calculated to hold around 1,300 trillion cubic feet of natural gas. Considering that BP reports British consumption as 2.76 trillion cubic feet in 2012, this formation is enough to transform the UK energy market, even though only 10-15 percent of shale gas reserves is generally recoverable.
Danny Alexander, the Chief Secretary to the Treasury, stated that “today’s news from the Geological Survey confirms 1,300 trillion cubic feet of (shale resources), which is double previous estimates.”
Fracking has come under some scrutiny by environmentalists and local communities who are worried that it could lead to earthquakes and contamination of ground water and drinking water supplies.
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To try and appease local communities the government has said that companies must invest £100,000 in communities near to fracking wells, along with a further one percent of all revenues earned from each production site.
Energy Minister Michael Fallon, explained that “this will provide a welcome boost for communities who will host shale exploration and production as well as offering strong assurances that operators will engage with them and work to the highest health, safety and environmental standards.”
Britain’s shale industry is still very young and as it has not been determined whether any gas can be economically extracted, it may never actually grow to maturity.