South Sudanese President Salva Kiir accused his former vice president of launching a coup earlier this week, sending the world's newest nation into political turmoil. Rocked by conflict last year over oil-rich areas along a shared border with Sudan, the latest troubles could undermine economic hopes for a troubled region.
Former Vice President Riek Machar said recent political conflicts in Juba, the nation's capital, weren't the result of a coup but part of a "misunderstanding" between presidential guards.
Machar was sidelined in a Cabinet shakeup earlier this year. (Related article: Emerging Oil Giant Kenya Gets Major Infrastructure Boost from China)
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More than 500 people were reported dead and hundreds more were reported injured from the fighting. The British Foreign and Commonwealth Office announced its embassy was open, though diplomats and their dependents were evacuated as a security precaution. ( Continue… )
By then end of this year, Pennsylvania may be the second-biggest gas-producing US state, behind Texas, as production at the Marcellus Shale soars, according to a new report from the Energy Information Administration (EIA).
For now, Pennsylvania ranks third for gas production in the US, but data for this year is still coming in and the state is clearly the fastest-growing, while Texas remains the all-out leader.
According to the EIA, natural gas production in Pennsylvania grew by 72% from 2011 to 2012, boosting the state from seventh place to third thanks to rapidly increasing production at the Marcellus Shale, which produced 1.4 trillion cubic feet of gas during the first two quarters of this year alone. (Related article: China’s Sinopec Eyes Stake in Canadian LNG Project)
“Pennsylvania also saw the largest volume and percentage increases in marketed gas,” according to the preliminary EIA report, whose final figures for this year will come out in February. “Production in the Marcellus region has grown so substantially that spot prices in the Northeast may continue to drop further below the Henry Hub spot price in the future.” ( Continue… )
When civil rights advocates grew restless because of President Richard Nixon's right-wing rhetoric on the issue of desegregation, then-Attorney General John Mitchell told them, ''Watch what we do, not what we say.''
Those following the hype over America's supposed newfound abundance of oil and natural gas would do well to follow that advice when evaluating what oil and gas company executives and their surrogates say.
When Royal Dutch Shell pulled the plug on its U.S. gas-to-liquids project recently, the company offered the same explanation it used when it shut down its oil shale project earlier this year: Shell sees better opportunities elsewhere. This explanation--much like the I'm-resigning-to-spend-more-time-with-my-family explanation--tends to deflect questions about why things aren't working out.
What's not working out for Shell is a planned $20 billion plant in Louisiana designed to turn natural gas into diesel, jet fuel, lubricants and chemical feedstocks, products typically produced by oil refineries. The plug was pulled, however, while the project was still in the planning stage. ( Continue… )
Tesla Motor’s chief designer, Franz von Holzhauzen, has recently taken part in an interview with Auto Bild, a leading German automobile magazine, in which he gave tantalising titbits about the progress of Tesla’s current projects, as well as model releases in the pipeline.
Von Holzhausen claimed that the Model X SUV is very close to completion and should be unveiled next year, and that the Tesla Model E, the model which has been lauded as the affordable car for the masses, will be ready for release in 2015.
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Tesla has always claimed that the Model E, E for Everyone, will be the vehicle that will have the largest impact on the US consumers, predicted to sell the largest volumes and help turn the country into an EV heaven. With a pre-tax credit price estimated to be around $35,000, the Model E will offer the average American a quality EV car with a range of 200 miles, for half the price of the current Model S. (Related article: Company Created to Turn Elon Musk’s Hyperloop Idea into Reality) ( Continue… )
The U.S. Department of Energy announced that it has selected NuScale Power as its second winner in the agency’s public-private partnership program to support the development of small modular reactors (SMR). The award includes a five-year cost-sharing program including up to $226 million in funding – DOE will provide 50% of the cost of the project and requires matching funding from the company.
DOE originally announced its decision to partner with the nuclear industry to develop SMRs in March 2012, issuing a Funding Opportunity Announcement (FOA) worth up to $452 million. Babcock & Wilcox received the first award in November 2012 and after negotiations with DOE, the two signed an agreement in April 2013 that provides B&W with $79 million in federal funding.
DOE defines SMRs as nuclear reactors that are 300 megawatts or less, about one-third the size of a conventional large-scale nuclear reactor. B&W’s MPower design will have a capacity of 180 MW, while NuScale’s Power Module will generate a much smaller 45 MW. (Related article: The Iranian Nuclear Deal and Its Effect on Oil Markets) ( Continue… )
U.S. oil production last month reached its highest monthly total in 25 years. South of the border, the story is different, though Mexico's decision to end a state oil monopoly in place for 75 years may consolidate the America's supremacy over the international energy market.
Mexican legislators passed a reform ending the 75-year state grip on the energy sector in overwhelming fashion. Petroleos Mexicanos, the former monopoly known also as Pemex, is on course for nine straight years of production decline. That could change as the measure, passed Thursday, was lauded as the most significant measure for the Mexican economy since the North American Free Trade Agreement went into force in 1994.
Mexico is one of the largest oil producers in the world, though production has declined steadily thanks in part to the loss from the Cantarell oil field and other major onshore plays. Mexican President Enrique Pena Nieto said the reform measure could boost production by 40 percent to 3.5 million barrels per day. (Related article: Budget Deal Opens up Parts of Gulf of Mexico for Drilling)
The decline in Mexico's oil production posed a threat to an economy that in 2011 generated 34 percent of its revenue from Pemex. The Mexican gross domestic product during the third quarter increased 0.8 percent, reversing earlier declines. A low benchmark interest rate of 3.5 percent, coupled with the energy overhaul, may stimulate the economy even further, as will future private investments. ( Continue… )
Continuing a tradition since 2007, once again we bring you some end-of-year thoughts about where we think the cleantech investment theme is going.
Our cleantech-specific analysis and advisory firm Kachan & Co. focuses on this space. We publish research reports. We get briefings from companies introducing new technology. We publish a cleantech analysis service. We’re quoted in the press. We pore over what’s going on in the world in clean/green tech markets and have made some informed calls over the years, like China’s cleantech dominance, the rise of efficiency technologies and the downturn in cleantech venture capital funding.
This year, we’re of the opinion that industry-watchers should take heart. Especially if you’ve been on the page that cleantech is past its prime or otherwise unworthy of your attention of late. Why? Because we’re more optimistic about the year ahead in cleantech than in our last two years of predictions (read 2012 and 2013), which were uncharacteristically negative for a firm that’s often been something of a cheerleader for the cleantech space.
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What’s different this year? As you’ll read below, we believe the world turned an important corner in cleantech in 2013. ( Continue… )
The emerging budget deal put together by Congressman Paul Ryan and Senator Patty Murray includes provisions that will open up vast new territories in the western Gulf of Mexico for oil and gas drilling. The bill, which will fund the government through the fall of 2015, approves the U.S.-Mexico Transboundary Hydrocarbons Agreement, originally signed between those two countries in 2012.
The agreement allows for the development of oil and gas reserves that cross national boundaries, and sets up a framework for their joint development. The deal would open up 1.5 million acres, an area that may hold 172 million barrels of oil and 304 billion cubic feet of natural gas, according to the Bureau of Ocean Energy Management (BOEM).
If the Ryan-Murray deal is approved and the treaty goes into effect, U.S. companies will be allowed to partner with Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company. This would be a significant change, as Mexico’s constitution forbids private sector contracts. Mexico is also separately considering a larger overhaul of its energy sector, and on December 10 the Mexican Senate approved of legislation that would allow for production sharing agreements with private companies. The Transboundary Agreement included in the Ryan-Murray deal would only affect areas along the maritime border, known as the Western Gap. (Related article: Russia Readies to Take Shale Oil Lead) ( Continue… )
More Supply, Competition and Friction Possible
News of Iran’s potential slow ramp up of oil supply resounded with a downward small ping in prices in late November, later to bounce back based on supply realities and economic growth. Iraqi oil supply keeps increasing, averaging about 3 million barrels per day, a new high in the last 20 years. Iraq plans to keep pumping — growing production 500,000 – 750,000 barrels more per day in 2014. Iraq’s output relative to OPEC production hovers near 10%, from around 7.5% in 2008. Iran’s contribution to OPEC production was around 12% in 2008, dropping in 2013 to 8.6%, according to a recent Wall Street Journal article.
“Al Arab Yantafiq lam yantafique,” said Mr. Charles Kestenbaum, a top Middle East expert and former U.S. Trade Specialist, in a November 25th interview, immediately following the news of Iran’s nuclear deal. This Arabic expression is translated as: ”Arabs can only agree to disagree.” In late November, the Dallas Committee on Foreign Relations hosted Charles Kestenbaum, a veteran of Middle East affairs since the mid-1970s. In his quote, a common expression, lies the challenges ahead in the Middle East.
“Iran sanctions will not be sufficiently relaxed during the next six month period to have a major impact on Iranian production or world markets,” Kestenbaum notes in follow up commentary. ”Word in Washington today [Dec. 4] reinforces that. It will take some time for the Majors to feel safe enough to go back or expand purchases, given how tough the sanctions regime has become and uncertain the relaxation will be.” Kestenbaum believes it will take months to sort things out, at minimum, just from the U.S. legal side. This does not include negotiating with the Iranians for the fields, production agreements, and even simple purchases will not restart right away. The sanctions are not lifted in any real way yet, which will come when the next stage of agreements is reached, suggests Kestenbaum. ( Continue… )
A deal between refiner Phillips 66 and Sapphire Energy to develop green crude was lauded by advocates as the dawn and the emergence of a new renewable form of domestic oil. With a production target of around 65,000 barrels per day by 2025, however, the celebration may be premature.
Phillips 66 and green crude pioneer Sapphire Energy, Inc., agreed to work together to develop crude oil derived from algae to the commercial level. Both sides said they'd work to expand on Sapphire's test program to show green crude can be refined using traditional methods.
Sapphire Chief Executive Officer Cynthia Warner said the decision by Phillips 66 shows there is momentum building behind the development of algae as a petroleum alternative. (Related article: European Car Manufacturers and Oil Companies Join to Create a Biofuel Roadmap)
"We’re looking forward to building a strong relationship with Phillips 66, an established leader in research and development for next generation fuels, who understands the opportunity our green crude oil holds as a feasible and sustainable crude oil choice for refiners," she said in a statement.
The U.S. Energy Department said algae-based fuels have the potential to displace 17 percent of the oil imported for use in the transportation sector and in August, Sapphire secured a $5 million grant from the federal government to help develop the refining process for algae-based fuels. ( Continue… )