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Energy Voices: Insights on the future of fuel and power

Monitor staff and guest contributors offer a mix of news, analysis, and commentary on energy and resource issues emerging across the globe.

A security officer walks past a gas pipeline after an explosion, 11 miles south of the city of Ajdabiyah, Libya in April. With oil demand and production centers shifting away from the Middle East and North Africa, Libya may find itself in a long-term state of disrepair. (Esam Al-Fetori/Reuters/File)

Libya oil production slows as world looks elsewhere for fuel

By Daniel J. GraeberGuest blogger / 06.13.13

Oil production from OPEC-member Libya, a leading African oil producer, hasn't recovered from civil war. The state oil company said it wasn't able to return to its pre-war glory because of ongoing protests that forced the closure of two export terminals and an entire oil field. OPEC said in its monthly report for June that oil demand should continue to grow this year as global economies slowly start to recover. China is leading in terms of oil demand growth and it's North America, not the Middle East, that's leading the way in oil production. With demand and production centers shifting away from the Middle East and North Africa, Libya may find itself in a long-term state of disrepair.

The Organization of Petroleum Exporting Countries said it expected world oil demand would increase by 800,000 barrels per day in 2013. China is expected to lead in terms of oil demand with 400,000 bpd, the cartel said. On the supply side, OPEC projected growth from outside the cartel at 1 million bpd for 2013, a figure supported by "strong anticipated growth" from the United States. (Related article: Libya Wants to Sell Oil. Is Anyone Listening?)

The U.S. Energy Department's short-term market report paints a similar picture, with U.S. tight oil and Canadian oil sands expected to drive production growth for non-OPEC members. The United States is expected to produce 8.1 million bpd by 2014, a 24 percent increase from 2012 levels. That means the world's leading economy is importing less foreign oil from places like Libya.  In February, the United States didn't import any oil at all from Libya.  ( Continue… )

Ernest Moniz speaks after being sworn in as Energy Secretary in May, in Washington. Dr. Moniz, a nuclear physicist at the Massachusetts Institute of Technology, replaced Steven Chu, who served as Energy secretary in President Obama's first term. (Susan Walsh/AP/File)

Energy Secretary Moniz promises LNG export decisions this year

By Correspondent / 06.13.13

By the end of the year, newly appointed Energy Secretary Ernest Moniz will tackle one of America's most pressing energy issues: How much liquefied natural gas (LNG) the United States will export to other nations.

"[W]e will expeditiously work through the remaining applications [to build LNG export terminals], reviewing each one on a case-by-case basis to ensure that all approvals are in the public interest," Mr. Moniz said Thursday in prepared remarks for his first congressional testimony as head of the Department of Energy.

When a member of the House Energy and Power Subcommittee asked the secretary whether he would make decisions on export applications this year, he responded: "Yes, absolutely," but declined to be more specific.

It's a sensitive subject, because the US shale boom has created a glut of natural gas. Energy companies are eager to further open up that shale gas production to world markets and push depressed gas prices back up. But those prices have benefitted residential and industrial consumers. More exports could mean an end to cheap electricity from the natural gas oversupply.  ( Continue… )

An oil derrick is seen at a fracking site for extracting oil outside of Williston, N.D. A surge in US oil production, the biggest in six decades, according to BP, is largely due to new drilling techniques that recover oil from shale rock formations across North Dakota, Pennsylvania, and other parts of the country. (Shannon Stapleton/Reuters/File)

BP: US oil production sees biggest rise in 62 years

By Correspondent / 06.13.13

Already booming, US oil has set a new record: the biggest single-year increase in oil production since BP started keeping track 62 years ago.

Oil also gained elsewhere in the world, pushing global production up 2.2 percent in 2012, according to BP's annual report on global energy, released Wednesday. Demand for energy, meanwhile, grew at a more moderate pace than it did in 2011. 

“The data show there is ample energy available," Bob Dudley, BP group chief executive, said in a statement. "Our challenge as an industry is to make the best choices about where to invest."

The surge in US production is largely due to new drilling techniques that recover oil from shale rock formations across North Dakota, Pennsylvania, and other parts of the country. The hydraulic fracturing and horizontal drilling of shale also unlocks previously trapped troves of natural gas. US production of natural gas jumped 4.9 percent in 2012, according to BP.   ( Continue… )

Smoke billows from a chimney of the cooling towers of a coal-fired power plant in Dadong, Shanxi province, China. Data provided by the US power industry and the transparency gained offers policymakers around the world important insights, Warren writes. (Andy Wong/AP/File)

How 'green' is your power?

By Jennifer WarrenGuest blogger / 06.13.13

U.S. Power Producers Offer Insight for Investors and Policymakers Worldwide

As the number two carbon emitter on the globe, behind only China, U.S. power generation’s impact on carbon emissions can shed light on our progress. U.S. data can also inform other countries as they make choices regarding their energy portfolio mixes, particularly in power generation fuel source decisions. It would seem easier to start cleaner than to become cleaner.

Carbon emissions, a chief culprit in the warming of the planet, crossed a new threshold with uncertain consequences in May to 400 parts per million (ppm). The last time concentrations were this high was 3 to 5 million years ago — featuring an earth with higher sea levels and forests extending to the Arctic Ocean, according to an atmospheric scientist. It was a reminder to those concerned about the effects of climate change and others supportive of a lower carbon economy that considerable heavylifting lies ahead. A goal of 450 ppm is considered a threshold to ward off temperature rises higher than 2 degrees Celsius, or 3.6 Fahrenheit.

The financial community and shareholders appear to be the influential tail stirring the wind around the emissions mega-dog. It is worth noting that publicly-traded firms are supposed to disclose “material” effects of climate-related risks on business operations. Ratings agencies such as Moody’s and Standard and Poor’s have looked at the credit impacts of climate change in the power sector. In ten year’s time, institutional investors of the Investor Network on Climate Risk, numbering 100 with $10 trillion in assets, are influencing firms to disclose risks and opportunities associated with climate change and the shift toward a lower carbon economy. In a study by the U.S. SIF Foundation, 11% of professionally-managed U.S. investments — $ 3.74 trillion — were selected based on environmental, social and governance (ESG) criteria.  ( Continue… )

A motorist puts fuel in his car's gas tank at a service station in Springfield, Ill. Retail fuel consumption may or may not recover to post 2008 levels, Gagliardi writes, but what is clear is that we are living in a world of multi headwinds for energy consumption, relatively high crude prices, and slow global economic growth. (Seth Perlman/AP/File)

What a bad economy means for gasoline demand

By Lou GagliardiGuest blogger / 06.12.13

As we have built more fuel efficient transportation vehicles over the years, we have been able to curtail our consumption of motor gasoline and distillates – diesel. However even with more fuel efficient vehicles, our gasoline consumption as measured by the U.S. Energy Information Administration (EIA) of total product supplied has been fairly stable since the 1980’s as more vehicles have come onto the road to offset greater fuel efficiency. Then in 2008, the Great Recession hit brought on by the financial crisis and the trend accelerated dramatically downward. By 2008 fuel consumption began to slide downward, by 2012 gasoline consumption literally fell off the cliff.

The primary catalyst for the dramatic decline in motor gasoline demand has been weak economic growth in the U.S. that has been exacerbated by stubbornly high retail fuel prices pegged to relatively high crude prices, despite a deepening global recession.

Not only has gasoline demand been weak since 2009, it has been successfully lower roughly each year to year the date in 2013. Within the last month gasoline retail sales have moved upward, whether we see this 2013 trend pass above 2012 remains to be seen. For now, clearly demand in 2013 remains below previous years.

Retail fuel consumption may or may not recover to post 2008 levels, but what is clear is that we are living in a world of multi headwinds for energy consumption, relatively high crude prices, and slow global economic growth.

Canadian Prime Minister Stephen Harper is seen through a television camera scope while speaking at the Council on Foreign Relations in New York, in May. Mr. Harper has campaigned in the US for the approval of TransCanada's Keystone XL pipeline. (Shannon Stapleton/Reuters/File)

Keystone XL: the 'Kim Kardashian of energy'?

By Correspondent / 06.12.13

If oil pipelines had personalities, the proposed Keystone XL would be a Hollywood starlet. It's always elbowing into the spotlight.

Never mind that the Canada-Texas line would create only about 35 permanent jobs. Or that the tar sands (or oil sands) bitumen flowing through the pipeline would create, by one estimate, a significant but not enormous 17 percent more greenhouse gases on a life-cycle basis than the average barrel of oil. As a political symbol, Keystone XL is hugely important for environmentalists and the energy industry.

“It’s the Kim Kardashian of energy,” Sen. Heidi Heitkamp (D) of N.D., reportedly said at a conference in Washington Wednesday, referring to the reality TV star. “I don’t know why we care.”

Those living in the path of the proposed pipeline certainly have reason to care about Keystone XL. For the energy industry, the proposed 1,179-mile oil pipeline represents an opportunity to create jobs and supply the United States with oil from a friendly neighbor. For environmentalists, it's a litmus test for the administration's and America's resolve to cut greenhouse gas emissions.

The furor is likely to persist well beyond the US State Department's release of its final environmental review of the project.  ( Continue… )

Workers tend to a well head during a hydraulic fracturing operation at a gas well outside Rifle, in western Colorado. (Brennan Linsley/AP/File)

In Amish country, trading fracking rights for a pittance

By James BurgessGuest blogger / 06.12.13

I don’t think it would come of a surprise to anyone if I were to state that fracking companies have been known to use underhand tactics to get access to shale formations, but an article written in New Republic, shows a new low for fracking companies.

Eastern Ohio, home to billions of dollars worth of oil and gas shale reserves, also boasts the largest Amish population in the world, and energy companies have been approaching Amish farmers to buy drilling rights to the land for a pittance. The problem is that once the farmers realise that they have signed away their land for a mere fraction of its real worth, they are unable to sue in court because their religion does not permit lawsuits. (Related article: Next on the US Shale Scene? Try Tuscaloosa)

New Republic mentioned the case of an Amish farmer called Loyd Miller, who was approached by an agent from Kenoil, who offered him $10 per acre for the drilling rights to his 158 acre farm, and assured him that these were the best rates around. Miller said that he spoke to his wife, and they agreed“hey, that’s $1,500 we didn’t have.”

Not long after they found out that other non-Amish landowners in the area were receiving as much as $1,000 per acre. After consulting with a lawyer he was told that the Kenoil agent had in fact committed fraud by promising that $10 an acre was the best price available, and that Miller had a strong case to sue. The problem is that due to his beliefs, that is something he could never do.  ( Continue… )

Un-harvested corn in a field near Council Bluffs, Iowa. (Nati Harnik/AP/File)

Gas stations on the front lines of an ethanol war

By Robert RapierGuest blogger / 06.12.13

(Robert Rapier's edit: Some of you need to turn on your sarcasm detectors)

I just finished reading a story that made my blood boil. It was about how the oil industry is using dirty tricks to keep the ethanol industry in check. I need to sit down, take a deep breath, and make sure everyone knows of the atrocity that has happened in Kansas.

The problem started when the ethanol lobby requested — and subsequently received — a waiver from the Environmental Protection Agency (EPA) that would allow up to 15% ethanol in gasoline blends. The current limit is 10%, which is a problem for the ethanol industry because the mandate in the Renewable Fuel Standard already has the country at the 10% limit. It would be a huge boost to the ethanol industry if that limit was moved up to 15%, because that would increase the potential size of their US market by 50%.

Since the EPA allowed 15% — but didn’t mandate it — and because some automobile manufacturers have stated that use of E15 would void car warranties, I predicted that E15 sales would be essentially nonexistent.

And that is exactly what has happened. E15 has failed to win over consumers. Few stations offer it. Head ethanol lobbyist Bob Dinneen says that it is the oil industry’s fault that E15 isn’t being sold. Now comes evidence from Kansas that Dinneen may be onto something.  ( Continue… )

A vessel containing oil is placed on core samples of oil-bearing rock from Russia's oil heartland in West Siberia at a warehouse of the Tyumen Oil Research Centre in Tyumen, Russia. Russia's estimated 75 billion barrels of shale oil tops the list of the world's shale oil reserves, according to a new report. (Maxim Shemetov/Reuters/File)

EIA: World has more shale oil and gas, but will it drill?

By Correspondent / 06.11.13

If the world seems suddenly awash with oil and natural gas, it's because of a stubborn rock called shale.

The amount of known technically recoverable oil from shale formations has jumped 10 times in the past two years, according to a new 41-nation survey by the US Energy Information Administration. The amount of technically recoverable shale gas is up 10 percent from the last time the EIA surveyed the world's shale formations.

How much of that fossil-fuel energy actually sees the light of day remains unknown. Although the number of known shale formations has doubled in the past two years, economics trumps geology in the energy. What's clear is that nations will spend the next several years trying to replicate the success of the United States and Canada in turning geologic obstacles into fossil-fuel windfalls.

"As shale oil and shale gas production has grown in the United States to become 30 percent of oil and 40 percent of natural gas total production, interest in the oil and natural gas resource potential of shale formations outside the United States has grown," EIA Administrator Adam Sieminski, said in a statement.

Technically recoverable shale gas now represents nearly a third of the world's total natural gas, according to the EIA report, released Monday. Shale oil makes up 10 percent of the world's crude oil.  ( Continue… )

A girl uses candlelight as she studies during a power outage in a slum in Islamabad Pakistan. Pakistan's national security is compounded by domestic frustration with an energy crisis that leaves most of the country without power for much of the day. (Faisal Mahmood/Reuters/File)

Sanctions won't stop Pakistan from Iran natural gas

By Daniel J. GraeberGuest blogger / 06.11.13

Pakistan says it can't let geopolitical concerns interfere with its quest to find ways to keep the lights on. A planning minister said last weekend that all options must be on the table to resolve ongoing energy woes and that could include actually moving on a long-discussed natural gas pipeline from Iran. A rival project from Turkmenistan has U.S. and Asian Development Bank support, though with U.S. priorities shifting, the new Pakistani government may have greater freedom in terms of its regional social circles.

The U.S. government last week tightened the screws on the Iranian energy sector on the heels of a damning report from the International Atomic Energy Agency.  U.S. sanctions are meant to starve Iran of the revenue it could use to finance its controversial nuclear program and, to some extent, the U.S. efforts are working better than ever. (Related article: Pakistan Faces Tough Choices with Energy Crisis)

Nawaz Sharif is in the dawn of his third stint as prime minister of Pakistan. His third non-consecutive term marks the first time that a civilian government ended a full five-year term and handed power over to another administration by a democratic vote. Last week, he told members of Parliament the day of U.S. drone strikes over Pakistani territory are over.

"We respect the sovereignty of other countries, but others should also respect our sovereignty," he said( Continue… )

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