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The average price of gas in the U.S. has hit $3 a gallon thumbnail

The average price of gas in the U.S. has hit $3 a gallon

The average price of gasoline in the U.S. hit $3 a gallon Friday, and should soon drop below the benchmark for the first time since December 2010. The price at the pump fell 33 cents in October, thanks mainly to plunging oil prices, according to AAA. Many exuberant drivers have taken to social media to post pictures of gas station signs with prices of $2.99 or lower. Drivers in South Carolina and Tennessee are paying the lowest prices, with an average of $2.75 a gallon. Drivers in New York are paying the most in the continental U.S., at an average of $3.37. That's still 22 cents cheaper than a year ago. Gasoline is cheaper than milk again. In September the national average price of milk was $3.73 per gallon. CBS News

Russian oil: Between a rock and a hard place thumbnail

Russian oil: Between a rock and a hard place

One of Russia’s most powerful men stood on stage at New York’s St Regis Hotel with a conciliatory message for America. “The relationship between the US and Russia has been severely hampered by historical stereotypes,” said Igor Sechin, a former Soviet intelligence officer and now the dominant force in the Russian energy industry. “But we have long ceased to be adversaries. It is time for us to become strategic partners.” It was April 2012. With those words, Mr Sechin signed a wide-ranging partnership between Rosneft, Russia’s state oil company, and ExxonMobil – in the process throwing open the doors of Russia’s vast oil wealth to the western energy industry. Today, the partnership envisaged by Mr Sechin, Rosneft chief executive, is in tatters. Under pressure of western sanctions, Exxon has frozen all 10 of its joint ventures with Rosneft, and other western companies – ...

Growth in Global Total Debt sustained a High Oil Price and delayed the Bakken “Red Queen” thumbnail

Growth in Global Total Debt sustained a High Oil Price and delayed the Bakken “Red Queen”

The saying is that hindsight (always) provides 20/20 vision. In this post I present a retrospective look at my prediction from 2012 published on The Oil Drum (The “Red Queen” series) where I predicted that Light Tight Oil (LTO) extraction from Bakken in North Dakota would not move much above 0.7 Mb/d. Profitable drilling in Bakken for LTO extraction has been, is and will continue to be dependent on an oil price above a certain threshold, now about $68/Bbl at the wellhead (or around $80/Bbl [WTI]) on a point forward basis. (The profitability threshold depends on the individual well’s productivity and companies’ return requirements.) Complete analysis of developments to LTO extraction should encompass the resilience of the oil companies’ balance sheets and their return requirements. What makes extraction from source rock in Bakken attractive (as in profitable) is/was the high oil price and cheap debt ...

Public Policy

The End Of An Era: Is The US Petrodollar Under Threat?

Recent trade deals and high-level cooperation between Russia and China have set off alarm bells in the West as policymakers and oil and gas executives watch the balance of power in global energy markets shift to the East.  The reasons for the cozier relationship between the two giant powers are, of course, rooted in the Ukraine crisis and subsequent Western sanctions against Russia, combined with China's need to secure long-term energy supplies. However, a consequence of closer economic ties between Russia and China could also mean the beginning of the end of dominance for the U.S. dollar, and that could have a profound impact on energy markets.  Rein of the USD  Before the 20th century, the value of money was tied to gold. Banks that lent money were constrained by the amount of their gold reserves. The Bretton Woods Agreement of 1944 established ...

Dubious Assumptions Underpin Latest ‘Peak Oil’ Anti-Fracking Report thumbnail

Dubious Assumptions Underpin Latest ‘Peak Oil’ Anti-Fracking Report

David Hughes, a Canadian geoscientist and a fellow of the anti-fracking Post Carbon Institute, has emerged as one of the media’s favorite proponents of “Peak Oil,” the debunked theory that oil production will soon be in permanent decline. Never mind, of course, that there are more proven oil reserves today than there were decades ago, when “Peak Oil” advocates were saying the exact same thing as they are today. In a new report, Hughes once again gives succor to anti-development and anti-fracking activists with more claims that shale development will “peak” a lot earlier than expected. More specifically, Hughes claims that “tight oil production from major plays will peak before 2020”. He also adds: “…by 2040, production rates from the Bakken and Eagle Ford will be less than a tenth of that projected by the EIA.” Hughes is arguing, in effect, that the ...

Public Policy

Russia-Ukraine Agree Terms On Gas-Supply Through March

Good news for the cold-showering, snow-covered Ukrainians... Russia has reached an interim agreement to supply natural gas to Ukraine through March according to Bloomberg. Of course, this will be paid for by more IMF loans (thank you US Taxpayer), pushing Ukraine further into debt and more dependent upon the West. *RUSSIA CONFIRMS GAS SUPPLY RESUMPTION TERMS AGREED WITH UKRAINE *GAZPROM, NAFTOGAZ CEOS SIGN AMENDMENT TO CONTRACT *RUSSIA, UKRAINE, EU AGREEMENT TO COVER DELIVERY THROUGH MARCH Terms... *OETTINGER: RUSSIA TO CHARGE UKRAINE $385/KCM THROUGH MARCH *UKRAINE READY TO IMMEDIATELY PAY $1.45B OF GAS DEBT: OETTINGER *NAFTOGAZ TO PAY $1.6B AS 2ND GAS DEBT INSTALLMENT BY YEAR-END Paid for by US taxpayers... *UKRAINE TO USE EU, IMF AID TO PAY FOR RUSSIAN GAS: OETTINGER As Bloomberg reports, Ukraine and Russia reached an interim natural-gas supply deal in talks brokered by the European Union to secure flows before the heating season, a Russian Energy ...

Consumption

Oil – A Question of Economics

Despite the political instability in parts of the MENA region, supply has managed to keep up with demand. This is largely due to the emergence of shale oil in the United States, which has ramped up its production to 8.7 mbd, which is 1 mbd more than last year. Some commentators even suggest that US oil production may reach up to 12 mbd by 2015. Meanwhile, Russia has also been putting record volumes of crude oil on to the market. The recent debate over falling oil prices has become an over simplified economic question of supply and demand, ignoring other interrelated economic theories. Despite the global recession and, oil demand has remained at 90-91 million barrels per day (mbd) over the past 5 years. However, due to the recession, Western nations have slowly reduced their demand. Meanwhile low growth, fuel efficiency, ...

Production

Enhanced Oil Recovery: Can Chemical EOR Take Off?

Can Chemical EOR Take Off? Enhanced Oil Recovery: Prospects for CO2-based EOR In the second of three articles on enhanced oil recovery, research firm Visiongain looks at the prospects for chemical EOR, outlining why the least prominent of the enhanced oil recovery (EOR) methods is beginning to see significant growth. Chemical EOR: A Checkered History Chemical formulations act as a displacing fluid, thus lowering the interfacial tension or increasing the mobility ratio to enhance oil recovery. The use of chemical EOR methods hit its peak in the mid-1980s when a vast number of pilot projects were active, particularly in the United States. High levels of research and development (R&D) and rocketing oil prices encouraged abundant pilot projects focusing on a range of chemical formulations, including both polymer and surfactant testing. Yet, when oil prices plummeted in the ...

A reality check on U.S. Government forecasts for a lasting tight oil & shale gas boom thumbnail

A reality check on U.S. Government forecasts for a lasting tight oil & shale gas boom

Drilling Deeper reviews the twelve shale plays that account for 82% of the tight oil production and 88% of the shale gas production in the U.S. Department of Energy’s Energy Information Administration (EIA) reference case forecasts through 2040. It utilizes all available production data for the plays analyzed, and assesses historical production, well- and field-decline rates, available drilling locations, and well-quality trends for each play, as well as counties within plays. Projections of future production rates are then made based on forecast drilling rates (and, by implication, capital expenditures). Tight oil (shale oil) and shale gas production is found to be unsustainable in the medium- and longer-term at the rates forecast by the EIA, which are extremely optimistic. This report finds that tight oil production from major plays will peak before 2020. Barring major new discoveries on the scale of the ...

Water Trading: Studies Call for Market-based Water Use System thumbnail

Water Trading: Studies Call for Market-based Water Use System

The Hamilton Project at Brookings and the Stanford Woods Institute for the Environment recently hosted a forum on the water crisis in the US. This resulted in the release of two interesting new discussion papers – “New Directions for US Water Policy” – charting feasible paths for improving water management in the US in the face of increasingly scarce water supplies. Especially the American West is continuing to experience a widespread and severe drought straining crucial water-supply systems. This does not bode well in light of long-term projections of rising water demand in combination with the potential for climate change-induced increased variation in precipitation. The Hamilton Project staff led by Melissa S. Kearney – with Benjamin H. Harris, Brad Hershbein et alia – compiled in a paper nine economic facts about water in the US, which serves as a good ...

World Crude Oil Production and the Oil Price thumbnail World Crude Oil Production and the Oil Price
In April 2012 I published this post about World Crude Oil Production and the ...
Why Resilience? thumbnail Why Resilience?
While it is clear that the pace and pattern of global economic growth is ...
Putin to Western elites: Play-time is over thumbnail Putin to Western elites: Play-time is over
  Most people in the English-speaking parts of the world missed Putin's speech at the ...
How Would We Provide Enough Energy For 11 Billion People? thumbnail How Would We Provide Enough Energy For 11 Billion People?
Reconciling energy and environmental concerns was challenging enough when global population seemed headed for ...

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Reddit takes on Kickstarter with crowdfunding site Redditmade | Technology | The Guardian #peakoil bit.ly/1wRNwNi
Reddit takes on Kickstarter with crowdfunding site Redditmade | Technology | The Guardian #peakoil bit.ly/1wRy4AD
#peakoil Fall and winter garden tips, tasks and events - The Tennessean: The TennesseanFall and winter garden ... tinyurl.com/kcz9ndr