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Dynamics of Fossil Fuel Movement

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Dynamics of Fossil Fuel Movement

Unread postby Keith_McClary » Tue 05 Aug 2014, 11:14:38

How the U.S. got mixed up in a fight over Kurdish oil — with a unified Iraq at stake
Lots of legal complications discussed here, including:
Since 1991, Iraqi oil revenue has gone through the U.N. Compensation Commission, which is still sending 5 percent of the total to Kuwait as reparations for damage done during Saddam Hussein’s invasion and occupation in 1990. The most recent payment to Kuwait, $1.2 billion, was made July 24, bringing the total payments to $46.7 billion.
...
One of McGurk’s tweets said: “There is no U.S. ban on the transfer or sale of oil originating from any part of Iraq. Suggestions to the contrary [are] false.”
Except maybe from the IS part?

I don't know how the reparations are enforced.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Tue 05 Aug 2014, 12:31:07

Keith - Apparently all the important players at the UN (US, Russia, China, etc.) agreed to the deal. Thus the buyers as well as the Iraq govt have no other option: the UNCC either gets the money or the home countries of the oil buyers don’t allow them to import the Iraq oil. I had not known about this arrangement. Interesting details here, such as Iraq having already paid $40+ billion in reparations. And with future settlements possible will be giving up 25% of their oil revenue perhaps until 2070:

http://www.casi.org.uk/guide/compensation.html
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Thu 21 Aug 2014, 07:06:16

Who says the light ends of US shale production don't have much value? Apparently not the folks in India. And again: exporting ethane isn't exporting "oil":

Reuters - India's Reliance Industries Ltd is to import 1.5 million tonnes a year of ethane from the United States to use as feedstock for its crackers, as the company looks to take advantage of its investments in the prolific North American shale gas industry. Crackers using ethane derived from shale natural gas liquids (NGLs) enjoy a cost advantage as it is cheaper than the alternative oil-derived feedstock naphtha for cracking into the petrochemical industry's basic building blocks such as ethylene and propylene. The company has executed storage and capacity agreements for liquefaction and export of ethane with a North American terminal, which is expected to commence operations in the second half of 2016, the company said in a statement on Wednesday.

The energy conglomerate, which operates the world's biggest refinery complex in a single location in western India, has also invested a total of $7.36 billion as of the end of June in three shale joint-ventures in the United States. Reliance, controlled by India's richest man Mukesh Ambani, plans to invest an additional $2 billion in shale assets, according to a person with direct knowledge of the company's investment plans. "Reliance's investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing ethane from North America and shipping it to India to attain long term feedstock competitiveness," the company said in the statement.

Reliance also said it has placed orders for six very large carriers to ship liquefied ethane to India as well as building storage facilities and pipelines to take the ethane to its crackers.
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Re: Dynamics of Fossil Fuel Movement

Unread postby Keith_McClary » Sat 23 Aug 2014, 00:06:48

Oil-Export Ban: Holding America Back
“Without compelling reasons for continuing to restrict crude exports, and given the potential benefits, Congress should liberalize the crude oil export regime. Republicans and Democrats alike, including President Obama, express support for boosting U.S. exports in general. Crude oil should be no exception.”

- Blake Clayton, “The Case for Allowing U.S. Crude Oil Exports,” Council on Foreign Relations, Policy Innovation Memorandum No. 34, July 2013.

“Because relatively free trade in petroleum products is allowed, the crude oil ban introduces artificial bottlenecks in the refining sector that paradoxically drive up the world (and hence U.S.) price of gasoline…. Ironically, the very people supposedly helped by the export ban—American motorists—are among those hurt by it.”

- Robert Murphy, “Oil Export Ban is Bad Economics,” Institute for Energy Research, August 15, 2014.

Oil tanker BW Zambesi made history last month by carrying $40 million in unrefined American oil from Texas to South Korea. The voyage marked the first time the United States has sold crude oil overseas since Congress banned such exports in the 1970s.

But what’s more remarkable than this landmark event is that the United States — now the world’s leading oil producer — continues to enforce a decades-old prohibition on crude exports. Repealing this arcane policy would drive down domestic fuel costs and create many new high-quality jobs, while spurring growth across the U.S. economy.

The federal ban on crude exports was an example of government intervention trying to solve the problems created by prior intervention. Congress enacted the prohibition in 1975 with two goals in mind. The first was to preserve domestic price ceilings by preventing U.S. producers from receiving higher world-oil prices. The second was to preserve believed-to-be depleting domestic reserves for the domestic market. “We have a classic Malthusian case of exponential growth against a finite source,” President Carter’s energy czar James Schlesinger infamously said.

The real problem was not a shortage of oil but a surplus of regulation. Lawmakers mistook regulatory-induced shortages with physical depletion. Energy economist Joseph Kalt estimated that without price controls, U.S. crude-oil production would have been as much as 1.4 million barrels per day higher, displacing imports and reducing prices from OPEC. Alas, instead of deregulation, the nation got petroleum allocation regulation and a ban on crude-oil exports.

The oil world has flipped since 1975. Federal price controls on oil were abolished by President Reagan in 1981. And breakthroughs in oil extraction techniques, with none greater than hydraulic fracturing and horizontal drilling, have boosted domestic production to levels not seen in decades.

Indeed, the United States will be the world’s leading oil producer this year, developing more of the resource than both Saudi Arabia and Russia. And according to the U.S. Energy Information Administration (EIA), by 2019, crude oil production will reach 9.6 million barrels a day, tying the all-time record set in 1970. Yet despite growing domestic production, companies are still prohibited from exporting crude except by special authorization by the U.S. Department of Commerce.

Such restrictions on crude exports have no public purpose. It is fallacious to believe, as Senator Robert Menendez (D-NJ) recently wrote in a letter to the president, “We must continue to keep domestically-produced crude here to lower prices for consumers . . .” In fact, export restrictions prevent U.S. consumers from enjoying the full benefits of our domestic energy boom, including lower fuel prices.

Case in point: Since there is no ban on exporting gasoline and other oil products, Americans pay the world price at retail, despite the fact that U.S. refiners have lower crude costs. After all, why pass on the savings to American drivers, when foreign consumers are willing to pay a premium for the same gasoline?

Lifting export restrictions would drive down prices at the pump by correcting this market distortion. A study chaired by Daniel Yergin found that removing the export ban could lower U.S. pump prices by an average of 8 cents per gallon from 2016 to 2030. This savings would be $265 billion over the same period.

The impetus for crude exports reflects the current reality of the U.S. refining industry. Our refineries are better equipped to process heavier, imported oil, as opposed to the lighter-grade crude produced here in the United States. This situation has created a refining bottleneck that artificially suppresses crude-oil production.

By unleashing global demand for U.S. crude, a repeal of the export ban would lead to an additional 1.2 million barrels a day in domestic production, according to Yergin’s IHS study. This translates into hundreds of thousands of new jobs and hundreds of billions of dollars in new investment. Free trade does just this, as economists from Adam Smith to Robert Murphy have explained.

The ban makes even less sense at a time when leaders in both parties are eager to boost exports. Back in 2010, in fact, President Obama promised to double U.S. exports by 2015. Abolishing the oil export ban would bring the United States far closer to meeting this goal given that petroleum products are among the fastest-growing exports.


The Obama Administration is still considering an end to the ban, while the EIA is scheduled to release several reports on the issue in the coming months. Eliminating an antiquated regulation that suppresses job growth and raises fuel costs should be an easy choice.

Robert L. Bradley Jr. is the founder and CEO of the Institute for Energy Research
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Sat 23 Aug 2014, 07:58:12

"This situation has created a refining bottleneck that artificially suppresses crude-oil production." What refining bottleneck? US refineries are shipping about 3 million bbls of products per day to foreign buyers. I haven't heard of one company not drilling because they can't find someone to buy their production. What I do see is companies borrowing tens of $BILLIONS to drill new wells as fast as possible. If their production was being "suppressed" why would they be doing that? Shipping crude oil overseas allows non-US refineries to capture that segment of the profit stream. Take that logic to the extreme end point: exports all US produced oil = US refineries lay off thousands of high paid jobs and US consumers have less products to compete for so prices increase. Don't get me wrong: I'm all for exporting every bbl of oil we produce since it would increase my profits. Screw the refinery workers and consumers: they don't care anymore about my well-being then I care about theirs. LOL.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Mon 25 Aug 2014, 20:04:39

Here's a story about relieving a real bottleneck...a pipeline bottleneck. It's also good to understand that much of the boom in Permian Basin production is enhanced recovery from existing fields. The reserves and technology have been around for many years. What was lacking was higher oil prices but the transport out of the Basin was still a hindrance. With a continued drop in transport cost the drilling boom may expand that much more.

Reuters - The reversal of flow in a little-known pipeline this week may be a first step toward ending bottlenecks at Midland, Texas, that have kept crude prices there sharply discounted to those at Cushing, Oklahoma. News of the switch for the 60,000 barrel-per-day (bpd) pipeline has already sharply narrowed the discount for WTI delivered at Midland to that at Cushing, the delivery point for the benchmark U.S. crude futures contract. "The reversal is definitely a start, but it doesn't resolve all the Permian Basin takeaway problems," said Amrita Sen, chief oil analyst at Energy Aspects. The Permian Basin has quickly become the nation's fastest growing oil patch with oil production on course to jump 38,000 bpd to 1.72 million bpd in September, according to the Energy Information Administration's drilling productivity report.

But infrastructure bottlenecks have held up its crude around Midland, pressuring prices there. On Tuesday, the day Centurion Pipeline LP, a subsidiary of Occidental Petroleum Corp, informed authorities of the pipeline change, WTI crude at Midland <WTC-WTM> for September traded at a discount of $21.50 a barrel versus oil delivered at Cushing, just 500 miles away. It was the widest discount since Reuters began reporting the price in 1998. By the end of the day, the discount had narrowed by around $5-6 a barrel. A day later, Midland gained even more and traded around $12 a barrel below WTI. "We're expecting differentials to move back closer to the $6 to $7 range (a barrel) from now until the BridgeTex pipeline starts up, and then you'll probably see more of a jump," Sen said. Magellan Midstream Partners LP's 300,000 bpd BridgeTex pipeline is set to start delivering oil from Colorado City, Texas, to the Houston area in September.

But market participants cautioned that this week's moves came at a volatile time for crude differentials. On Friday, physical traders and refiners were trading the second of three roll trading days, where refiners, pipelines and traders adjust their crude slate after the expiration of the front-month U.S. crude contract. A trading source said that differentials will likely remain unchanged at levels around $12 a barrel until 2015. Sending oil from Midland to Cushing costs about $1 to $1.50 a barrel provided there is pipeline capacity available, and recently, some traders have been able to take advantage of the $15 to $20 a barrel premium. But if the spread is any narrower than $6 to $7 a barrel, it may be worth pushing oil towards the Gulf Coast instead, which would cost some $2.50 to $4 a barrel, but could fetch a higher premium.
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Re: Dynamics of Fossil Fuel Movement

Unread postby toolpush » Tue 26 Aug 2014, 07:35:55

Rockman,

I would like to pick your brains a little, if you don't mind.
i was doing a little reading and came across this strange animal, well it is actually a drill bit, but it is strange, and it raised a few questions for me.

http://www.epmag.com/item/Optimizing-Pe ... one_134049

a recent focus was to drill the curve section 50% faster in the Wolfcamp Shale while maintaining high build rates that range from 12 degrees to 14 degrees per 30 m (100 ft) consistently.

snipe

changes to bottom hole assemblies (BHAs), and motor selection alterations and additional trips


1/ Drilling with build rates of 12 to 14 degs?? 3 to 5 is the normal build rate, have you heard/used these types of high build rates. They must use very flexible BHAs, liners and completion strings.
2/ Are all these shale horizontals still being drilled with mud motors? Surely rotary steerable tools must be the way to go, for hole cleaning and speed. I know they are more expensive, but haven't they come off patent and the prices have dropped?

PS, I wasn't really interested in the drill bit, but it is still strange, lol.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Tue 26 Aug 2014, 08:15:38

pusher - "Short radius" drilling has been around for a while. here's a discussion of 28 degrees/100'.

http://www.drillingcontractor.org/dcpi/ ... wledge.pdf

Rotary steering has been dominating the Eagle Ford for a good while. Quick drills with few dog legs. But not cheap: costs at least $200k just to rig it up. But that's how they've doubled the p rate and can sometimes get to TD from the KOP without tripping. But directional (non-horizontal) drilling is still mostly done with motors. I just hit a 14 degree hold angle after building 4.5 degrees/100' with a motor. Easy peazy.
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Re: Dynamics of Fossil Fuel Movement

Unread postby toolpush » Tue 26 Aug 2014, 18:11:22

Thanks Rockman,

Interesting read. I see why I have not come across it offshore, as it mainly restricted to small hole sizes. On the rare occasions I have drilled with a 6 1/8" bit, it has been to dress cement in 7" liner or very occasionally a short rat hole out of the 7" liner. I understand the economics from onshore to offshore are different. Out here, it sometimes seems a competition to see who can run the most rotary logging tools in a string, whereas onshore it is more cost retrained.
With the smaller hole sizes onshore, hole cleaning would not be as big an issue, most of bends we do are in the 12 1/4", but 17 1/2" and 26" hole we have also gone off to a high degree. The 26" work was done with a motor, but hole cleaning 900m of 26" really takes some volume.
Not sure about bit quality or formations how they compare, but it is very rare these days offshore to trip a bit. Casing points and tool failure are really the only times we trip while drilling. As for bits, it is usually hole many holes per bit, rather than bits per hole.

Any way thanks for the feedback.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Fri 29 Aug 2014, 07:02:01

Just to make it clear the export of US light oil and lightly "refined products" is essentially a battle between the producer lobbyists and the refinery lobbyists. Nothing more than producers trying to reach foreign markets that will pay more then US refiners. Good to remember that while México is a significant source of US imported oil they use 25% of that income to buy refined products from Gulf Coast refineries. From

http://www.downstreamtoday.com/news/art ... a_id=44313

Reuters - At least three oil-producing Latin America countries may soon start importing cheap, light crude to replace costly purchases of refined products, ending decades of crude self-sufficiency. State-run companies in Mexico, Venezuela and Argentina have said they are considering importing light crudes. Those could be blended with domestically-produced heavy crudes so they can be more easily exported, or be used to improve the crude diet of old refineries that lack enough deep conversion capacity to transform heavy oil into light products such as gasoline and diesel.

With regards to blending it's also good to remember that virtually every load of the Canadian oil sands production exported to the US contains about 25% condensate so it can be pumped. Most of that light oil is from the US.
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Re: Dynamics of Fossil Fuel Movement

Unread postby toolpush » Fri 29 Aug 2014, 07:51:46

Rockman,

Mexico, being a NAFTA country, would be able to receive US crude, just like Canada. Correct?
Now how much refining capacity does Mexico have?
http://en.wikipedia.org/wiki/List_of_oi ... ies#Mexico
Mexico[edit]
Reynosa Refinery (Pemex) Reynosa, Tamaulipas
Minatitlan Refinery (Pemex) Minatitlan 167,000 bbl/d (26,600 m3/d)
Cadereyta Refinery (Pemex) Cadereyta Jiménez, Nuevo León 217,000 bbl/d (34,500 m3/d)
Tula Refinery (Pemex) Tula, Hidalgo 290,000 bbl/d (46,000 m3/d)
Salamanca Refinery (Pemex) Salamanca, Guanajuato 192,000 bbl/d (30,500 m3/d)
Ciudad Madero Refinery (Pemex) Ciudad Madero 152,000 bbl/d (24,200 m3/d)
Salina Cruz Refinery (Pemex) Salina Cruz 227,000 bbl/d (36,100 m3/d)



So the problem of excess LTO solved for another one million barrels per day of production, lol. Export discounted LTO to Mexico, light, cheap and easy to refine, and export more of the Mexican crude they are having trouble to refine at the full world price.
I know you are going to ask me where are they going to sell it. Well the US doesn't need it, the Canadians are doing a good job of supplying the heavy crude to the US. China has just built a heap of heavy oil refineries, but Saudi, Kuwait and Venezuela have probably got them covered, beside China seems to have taken a little down turn lately. Well India, could be a good place, besides let the Mexicans work that one out, can't make it too easy on them, lol. The main issue is for the US to be able to handle all their LTO, so it doesn't effect the price Rockman gets for his oil. Correct? lol
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Re: Dynamics of Fossil Fuel Movement

Unread postby Synapsid » Fri 29 Aug 2014, 14:07:10

ROCKMAN,

If the Duvernay meets its (hyped?) promise then Alberta will have less and less need to import US condensate. That will just give us more condensate to play with; would any opportunities open up as a result?
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Fri 29 Aug 2014, 14:31:46

Syn - The Duvernay may be the real thing. But will still take a while to ramp up production and then keep the drilling pace up. As far as opportunities the best bet (for the operators...not the refiners) may be to ship it south for a better price. For those countries cheaper than importing refined products (at the right oil price, of course). Let's their refining industry catch that profit, reduces trade balances and adds some employment opportunities for the locals.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Fri 29 Aug 2014, 14:47:04

Pusher - The latest I've heard is that Venezuela is having trouble meeting the oil export contracts with their Caribbean partners. In fact, I think I read that they are having to buy refined products in the world market to meet those obligations. If true they actually do need to free up some of their heavy production. Here's some of the latest news of Venezuelan problems:

Venezuela’s plummeting oil sales to the U.S., its biggest export market, are exacerbating a collapse in the nation’s debt securities. Bonds issued by Venezuela sank 3 percent on Jan. 31, a day after data released by the U.S. Energy Information Administration showed that 2013 energy sales to the country are headed for a 28-year low. The selloff pushed losses this year to 12.4 percent, more than three times the average 3.93 percent drop among notes from the least-creditworthy developing nations, according to data by Bloomberg. The tumble in oil exports, Venezuela’s biggest source of dollars, comes as President Nicolas Maduro faces a shortage of U.S. currency that’s caused consumer prices to soar 56 percent and foreign reserves to plunge to a decade-low of $21 billion. Petroleos de Venezuela SA, the state-run oil producer known as PDVSA, is sending hundreds of thousands of barrels a day to China to repay loans totaling more than $40 billion since 2008, at a time when its production is shrinking.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Sat 30 Aug 2014, 12:51:07

Would interesting to have a live feed from this meeting, eh? Meeting just as the heating season begins. What a surprise. LOL.

Reuters - European Energy Commissioner Guenther Oettinger expects the trilateral talks between Russia and Ukraine, brokered by the EU, to resume by mid-September. Oettinger has been in Moscow where he met Russian Energy Minister Alexander Novak. Russia stopped supplying Ukraine with gas in June after the former Soviet republics failed to agree on gas price and debt. Around half of Russian gas exports to Europe flow via Ukraine.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Mon 01 Sep 2014, 10:10:41

Is Canada Finally Seeing the Light on Energy? Canada appears to have begun to get its act together for developing projects to tap global markets for the nation’s energy resources. These projects will be very important for the long-term future of the Canadian economy. IOW what are those damn Canadians doing with "our oil"? From http://www.downstreamtoday.com/news/art ... a_id=44300

Pacific Future Energy Corp. is backed by Mexico’s Grupo Salinas and is proposing to build a C$10 billion refinery on the coast of British Columbia. Various energy companies were employing former politicians, bureaucrats or First Nations’ executives to help promote major energy infrastructure projects. More projects appear to be on the boards that could enable Canada to begin accessing world markets for its energy resources. The Pacific Future refinery proposal is one of three being discussed for B.C. The other proposals are being floated by B.C. newspaper magnate David Black and aboriginal businessman Calvin Helin. The Pacific Future refinery is designed to be built in modules of 200,000 barrels per day capacity up to a maximum of 1 million daily barrels. The idea for a refinery is that rather than exporting oil sands bitumen that sells at a low price and has citizens fearful of the environmental damage from a bitumen-ladened tanker accident, by refining the oil the value of that barrel will be much greater, while the environmental risk is considerably lower.

The increased environmental risk from a spill is a reason why Enbridge’s (ENB-NYSE) Northern Gateway oil line through B.C. is being fought by local residents. On the other hand, the battle with the United States over approval of the Keystone XL pipeline may have finally convinced Canadians that they need to work harder to access other markets for the country’s oil and gas or their economy will fail to grow as anticipated. The landscape for exporting western Canadian natural gas is also changing. There are 14 LNG terminals proposed for the coast of British Columbia, seven of which have been granted export permits by the Canadian government. It is thought that there is capacity for only three terminals – two at Kitimat and one at Prince Rupert, although it is possible that a smaller fourth terminal might be built such as Woodfibre LNG, proposed for Squamish near Vancouver. West Coast Canada LNG, the Exxon Mobil Canada/Imperial Oil Ltd. joint venture, in Prince Rupert harbor is considered the favorite in that region.

At Kitimat, the three terminals furthest along in development include Pacific NorthWest LNG headed by Malaysia’s Petronas, LNG Canada, a venture led by Shell Canada Energy, and Kitimat LNG, a joint venture of Chevron and Apache Corp. (APA-NYSE). The future of the latter project is questionable since Apache – under pressure from an activist shareholder – has announced its exit from the venture, plus the project has yet to secure any Asian customers for its LNG. The other two Kitimat terminals already have Asian customers.

OTOH we're doing it to ourselves also: U.S. Condensate Exports Likely to Be Duty Free in Japan

Reuters - More Japanese refiners are likely to buy U.S. condensate if the light oil is ruled to be not liable for customs duty, as is expected, industry and government sources said. The United States started allowing exports of the super light oil only in the last few months, and the ruling by Japan's customs bureau when the first cargo arrives in October is likely to give the shipment the same status as Middle East condensates. Japanese refiners have been concerned that U.S. condensate would be treated as an oil product subject to import duties. So far only refiner Cosmo Oil Co has decided to import the U.S. oil, and an official with the Tokyo customs office said it would likely be ruled a crude and thus not subject to tariffs. That means exports of the U.S. condensate to Asia could rise as long as they are priced competitively against similar oils from suppliers such as Qatar and Iran to offset the longer voyage. Government officials have said Japan is trying to wean itself from a roughly 84 percent reliance on Middle East oil.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Wed 03 Sep 2014, 15:30:43

For a long time the EU govt's condemned the Canadians for producing the "dirtiest oil on the planet"... the oil sands. Now it looks like the Russians have helped the EU reclassify the oil sands as "not that dirtiest" after all: "European Union policymakers were reportedly proposing to scrap a requirement to label oil from tar sands...as more polluting than other types of crude."

Reuters- Over time, the Canadian dollar might prove to be a winner from the conflict in Ukraine, which has highlighted the European Union's reliance on energy supplies from Russia. Canada is a potential provider of oil and gas to Europe from its western provinces, and considerable investment has been made in infrastructure to get production to North America's eastern seaboard for possible transatlantic passage. If that business develops, it can only bolster demand for the Canadian dollar.

The investment in pipeline and transport is clear. Enbridge, Canada's biggest pipeline company, expects its new 450,000-barrel-per-day Seaway Twin pipeline to carry Canadian oil-sands crude to the U.S. Gulf Coast in mid-October. TransCanada Corp plans to transfer 1,864 miles of under-utilized natural gas mainline system to the 1.1 million barrel-per-day Energy East pipeline. That will ship crude from Alberta's oil sands to Saint John in New Brunswick, on Canada's Atlantic seaboard. Saint John is also the home of Canada's largest oil-by-rail terminal, one of many now established on North America's eastern and Gulf shoreline. The fact that, in April, Enbridge's U.S. subsidiary Tidal Energy Marketing secured a U.S. government license to export "limited quantities" of Canadian-origin oil from a U.S. port is encouraging. The licenses were specifically to re-export oil to Europe, the first awarded the U.S. Commerce Department had awarded since 2008. It does suggest Canada would be part of the solution if the EU decides it needs to reduce its energy dependency on Russia.

Canada and the EU have been edging toward closer trade relations, and energy is a key component."We don't see the crisis in Ukraine as simply an opportunity to market Canadian products," Canadian Prime Minister Stephen Harper said in June. "But obviously we're deeply engaged in a discussion with our allies on how we can make sure that globally our energy supplies are secure and stable." In the same month, European Union policymakers were reportedly proposing to scrap a requirement to label oil from tar sands, of which Canada is the top producer, as more polluting than other types of crude. The European Union and Canada are set to sign a Comprehensive Economic and Trade Agreement in Ottawa on Sept 25-26. The agreement would need to be ratified by both the EU and Canadian parliaments.

While EU lawmakers have threatened to block the pact, some over environmental concerns, a growing awareness of the implications of Europe's dependency on Russian energy supplies could well focus legislators' minds. Canada is also aligned with Europe militarily, as a NATO member, and is said to have shown interest in participating in a new rapid reaction force to boost the alliance's defenses in response to Russian intervention in Ukraine. In the current circumstances, closer energy ties between the European Union and Canada make sense. The Canadian dollar can only be a beneficiary of such a process.
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Thu 04 Sep 2014, 12:02:18

The big guns are arriving at the great "export oil" battle. The politicians from the refining states (D's and R's) are against any export and the politicians (D's and R's) from producing states are for it. Fortunately so far the potential effect on consumers doesn't appear to be a factor to many in DC.

Reuters - A lobbyist group for four U.S. oil refiners urged the federal government on Thursday to stop issuing approvals for energy companies to ship abroad a lightly processed crude oil, saying it is prohibited by a nearly 40-year-old ban on oil exports. Consumers and Refiners United for Domestic Energy (CRUDE), wrote to Commerce Department officials five months after the department's Bureau of Industry and Security gave approval to Pioneer Natural Resources and Enterprise Product Partners to export certain condensates.

Ending the ban could mean some refiners lose money as it becomes harder for them to obtain crude supplies. Supporters of lifting the restriction say the drilling boom will soon create a domestic oil glut. Running condensate through stabilizers does not turn the crude into a refined product, CRUDE argued, because it simply makes it fit for transportation and end-users would have to further refine it. Stabilizers, increasingly built in oil fields far away from refineries, are generally cheaper and use lower temperatures than distillate towers at refineries.

The government's interpretation - that stabilizers turn condensates into a refined product like gasoline, which can be exported freely - is "contrary both to the clear wording of the law and the common use of those words in the energy industry," CRUDE wrote. The group also blasted the way the department conveyed the approvals in private letters to the companies. News reports surfaced about the letters in June. But details on what kind of processing turns condensate into what the government considers a refined product remain private, a fact critics say clouds investment decisions.

Any such change in regulation "should occur through a proper and open review rather than by the stealth of private letter rulings," CRUDE wrote. The group urged Commerce to rule that stabilizers do not turn crude into refined product, which, it said, would signal there would be no further "exemptions" granted. A battle is brewing in Congress around the ban. Legislation to overturn it is not expected soon, although Alaskan U.S. Senator Lisa Murkowski has led a charge to do so. Democrats Robert Menendez, from New Jersey, and Edward Markey, from Massachusetts, support a continued ban. The pair wrote to Commerce in July, saying that the two recent exemptions may have violated the law. In the House of Representatives, Republican Joe Barton from Texas said last week he supports overturning the ban, putting him at odds with some Republican colleagues.

A first cargo of 500,000 barrels of condensate was loaded in Texas City, Texas, in late July and is expected to reach South Korea later this month.
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Re: Dynamics of Fossil Fuel Movement

Unread postby Keith_McClary » Mon 08 Sep 2014, 11:46:21

Suit latest salvo in ongoing spat over oil exports.
By Daniel J. Graeber | Sept. 8, 2014
BAGHDAD, Sept. 8 (UPI) -- The Iraqi government revealed Monday it started legal proceedings against a Greek company responsible for exports of oil from the Kurdish north of the country.
The Iraqi Oil Ministry said it started legal proceedings in a Greek court against Marine Management Services, which operates five vessels, including United Kalavrvta, en route to a port in Galveston, Texas.

"Marine Management Services is liable for damages of at least $318 million, and possibly significantly more, as a result of its willing and active participation in the Kurdistan Regional Government's illegal crude oil export scheme," the ministry said.
"I could go on, but let’s veer off in another direction instead."

– The Archdruid
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Re: Dynamics of Fossil Fuel Movement

Unread postby ROCKMAN » Wed 10 Sep 2014, 11:53:29

Again a truly obscene lack of understanding the realities of the situation IMHO. So by the US, a major oil and net NG importer, shipping oil/NG to the EU is going to lower global oil prices? That could only happen if the US reduces its oil consumption to a greater extent then what it would ship to the EU. Otherwise the US would have to import more oil than it consumes and then reship it to the EU which would put no downward pressure on global oil supplies. And even in the unlikely event the US did restrict oil consumption by US consumers and oil prices fell enough to punish Putin it would also kill much if not most of the financial incentive that led to the increase in US oil production. So now in addition to the restriction of oil consumption by US citizens we’ll have even less domestic production available. And all this put forward by our world leaders who we are expecting to help us as we go down the PO patch. Truly demoralizing IMHO.

Reuters - The United States should commit to exporting oil and natural gas to Europe under a transatlantic trade deal in light of the European Union's geopolitical situation, the EU trade commissioner said on Tuesday. Tension between Russia and the West over the future of Ukraine is spurring the European Union to renew efforts to end decades of dependence on Russian gas. One solution would be greater access to abundant U.S. resources. Overturning a 40-year U.S. ban on oil exports by agreeing to send oil to Europe could pressure Russian President Vladimir Putin by lowering global crude prices.
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