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The Cannibalization Of The Financial System Will Force Investors Into Silver

The Cannibalization Of The Financial System Will Force Investors Into Silver

Day in and day out, the global financial system continues to cannibalize itself.  Clear evidence of this points to the massive “Artificial” liquidity and asset purchase policy instituted by the Federal Reserve.  While financial analysts provided several theories why the Fed was forced to inject liquidity via the Repo Market and also purchase $60 billion a month in U.S. Treasuries, the real reason has to do with the falling quality of oil and its impact on the value of assets and collateral.

It’s really that simple.  However, there is no mention of it (energy) by any of the leading financial or precious metals analysts.  For example, in Alasdair Macleod’s recent Goldmoney.com article titled, How To Return To Sound Money, he states the following:

This article provides a template for an enduring sound money solution that will deliver economic progress while eliminating destructive credit cycles. It posits that a properly constructed gold and gold substitute monetary system, which also includes the removal of bank credit inflation as a means of providing investment capital, is the only way that lasting stability and prosperity can be achieved.

Alasdair Macleod, who I have a great deal of respect, doesn’t mention “Energy” once in his entire article suggesting that returning to sound money, through gold, is the only way for lasting stability and prosperity can be achieved. The majority of economic prosperity has come from the burning of oil, natural gas, and coal, not from gold or silver. The precious metals act as money, a store of value, or economic energy, but are not the ENERGY SOURCES themselves.  While this is self-evident, it is very important to understand.

…click on the above link to read the rest of the article…

Haftar Blocks All Libyan Oil Exports Day Before Berlin Peace Conference

Haftar Blocks All Libyan Oil Exports Day Before Berlin Peace Conference

Given Libyan commander Khalifa Haftar has over the past two years captured the majority of the oil and gas rich country’s energy producing regions, he’s now playing his biggest card yet to leverage international peace talks in his favor amid a final push for his Libyan National Army (LNA) forces to take Tripoli. 

Bloomberg reports Saturday that the Benghazi-based ‘rebel’ general has now “blocked oil exports at ports under his control, slashing output by more than half and posing a potential setback for an international conference on Sunday that aims to broker an end to a civil war in the OPEC nation.”

Image source: AP via Oilandgaspeople.com

The major talks Sunday are due to be held in Berlin, and a who’s who of external backers of each side of the conflict will be in attendance, including Putin, Erdogan, France’s Macron, and UK Prime Minister Boris Johnson, as well as the Italian prime minister and US Secretary of State Mike Pompeo.

The Berlin conference comes after a failed deal to establish a ceasefire in Moscow earlier in the week, when Haftar left the city after the head of the UN-backed Government of National Accord (GNA) in Tripoli, Fayez al-Sarraj, actually signed the agreement. Haftar also reportedly secretly scuttled to different Mediterranean capitals, including Athens, in a bid to gain recognition as legitimate leader on the ground.

Haftar’s drastic move to block oil exports is likely aimed at torpedoing the Berlin meeting before it even starts, given he’s proven intransigent in the face of international pressure for him to halt the ongoing Tripoli offensive — even during the talks hosted by one of his key political backers Vladimir Putin. 

Libya’s National Oil Corp. (NOC) has now declared Force Majeure, per Bloomberg:

…click on the above link to read the rest of the article…

Could ISIS Take Control Over This Large Iraqi Oil Field?

Could ISIS Take Control Over This Large Iraqi Oil Field?

Iraq Oil Field

As always, it’s the fear of sanctions that provides the leverage Trump seeks in this cat-and-mouse game with Iran. And this time, the leverage is over Iraq, which would like to see both American and Iranian forces out of the country, for obvious reasons. 

There is nothing ISIS would love more than this. 

It would also devastate Iraq because the sanctions threatened would include blocking access to Iraq’s U.S.-based account where all the oil revenues are kept. That threat stands if Iraq moves to kick U.S. forces out of the country. 

That would mean victory for Iran (temporarily). Kicking out Iranian forces is not nearly as simple because the line between state and non-state actors is blurred, at best. 

A few weeks ago, a U.S. drawdown of military forces in Iraq was already expected, but that now seems unlikely because of the implications. 

The very military base that Iran attacked following the assassination of General Soleimani was already preparing for a drawdown. 

In addition to the threat of sanctions on oil money, a U.S. withdrawal would likely open the door for an ISIS return.  

What Iraqis Want

There is no consensus on this question, other than the fact that no one wants Iraq to be the proxy battleground between the United States and Iran. 

It’s a fair point, and Iraqis have had a very difficult time enjoying anything close to sovereignty since the fall of Saddam Hussein. 

While the Iraqi parliament has voted for U.S. troops to leave, they do not represent a unified voice. The Sunni elements of parliament did not participate in the vote. Neither did the Iraqi Kurds. 

…click on the above link to read the rest of the article…

Merkel Inks Deal For Stalled German Coal Exit

Merkel Inks Deal For Stalled German Coal Exit

In a move that’s sure to restore a smidgen of Greta Thunberg’s childhood, German Chancellor Angela Merkel has finally hammered out a deal for Germany’s stalled exit from coal-fired power generation, after state leaders agreed to shut down the industry by 2038.

We would note that this falls outside the 12-year window of doom predicted by US climate expert Alexandria Ocasio-Cortez, but better late than never when environmental apocalypse is on the line.

Germany’s plan includes 40 billion euros ($44.6 billion) in compensation for impacted regions, according to Bloomberg. The country’s largest coal-fired power producer, RWE AG, will receive 2.6 billion euros according to an insider – sending the stock up 1.7% in mid-morning trade on Thursday. In eastern Germany, utility Lignite operators will receive 1.75 billion euros according to German Finance Minister Olaf Scholz.

Germany reaches agreement to phase out coal by 2038

Merkel has been in a tight spot on the issue, facing pressure from environmentalists and miners alike. Climate tops voter concerns, and Germany will already miss its 2020 targets under the Paris Agreement. On the other hand, the poorer states in the former Communist East, where the bulk of the mines are, fear a growing gap to the West. Her predicament feeds into a broader political challenge, with the Greens party and the far-right Alternative for Germany gaining support on both sides of the political spectrum to squeeze Germany’s traditional mainstream parties, including her Christian Democrats. The AfD has been particularly strong in the eastern mining states.

“It was a long night — it lasted until 2 a.m. — but we were able to achieve a sensible agreement,” Armin Laschet, premier of the state of North-Rhine Westphalia, said in an interview with Deutschlandfunk radio. “The time frame that we’ve agreed on is ambitious, but realistic.” –Bloomberg (via Yahoo!)

…click on the above link to read the rest of the article…

Permafrost will limit natural gas, oil, and coal extraction

Permafrost will limit natural gas, oil, and coal extraction

Preface. For many people, it’s comforting to know that about 25% of remaining oil and gas reserves (we have the know-how and economics to get it) and resources (beyond our technical and monetary capability) are in the arctic. They assume we’ll get this oil and gas when we need to, and delay oil shortages for a decade or more.

But  they haven’t considered the difficulties of trying to drill for oil and gas or mine coal in permafrost.  It buckles roads, airports, buildings, pipelines, and any other structures placed on top.

A Greenpeace report published in 2009 said thawing soil in Russia’s permafrost zones caused buildings, bridges and pipelines to deform and collapse, costing up to 1.3 billion euros (nearly $1.5 billion) a year in repairs in western Siberia.

Although there are ways to build roads that can withstand melting and freezing permafrost for a while, it is terribly expensive, and it is why we haven’t developed much oil or natural gas in Alaska besides Prudhoe Bay, as far north as you can get, with fewer permafrost issues.

The cost and energy of production in permafrost may mean that reserves are much less than estimated.  Especially if they are developed when oil production begins to decline, since the price and declining availability of oil will mean there’s less energy to build roads, towns, platforms for drilling rigs and oil pipelines. And for agriculture, transportation supply chains, and all the other myriad ways oil and gas keep us alive.

As it is, climate change continues to exceed past engineering standards, and every year Alaska and Canada spend millions of dollars trying to fix roads, bridges, and other infrastructure.

…click on the above link to read the rest of the article…

THE RENEWABLE GREEN ENERGY MYTH: 50,000 Tons Of Non-Recyclable Wind Turbine Blades Dumped In The Landfill

THE RENEWABLE GREEN ENERGY MYTH: 50,000 Tons Of Non-Recyclable Wind Turbine Blades Dumped In The Landfill

Funny, no one seemed to consider what to do with the massive amount of wind turbine blades once they reached the end of their lifespan.  Thus, the irony of the present-day Green Energy Movement is the dumping of thousands of tons of “non-recyclable” supposedly renewable wind turbine blades in the country’s landfills.

Who would have thought? What’s even worse, is that the amount of wind turbine blades slated for waste disposal is forecasted to quadruple over the next fifteen years as a great deal more blades reach their 15-20 year lifespan.  Furthermore, the size and length of the newly installed wind turbine blades are now twice as large as they were 20-30 years ago.

(graphic courtesy of Ahlstrom-Munksjo.com)

Honestly, I hadn’t considered the tremendous amount of waste generated by the so-called “Renewable” wind power industry until a long-term reader sent me the link to the following article, Landfill begins burying non-recyclable Wind Turbine Blades:

Hundreds of giant windmill blades are being shipped to a landfill in Wyoming to be buried because they simply can’t be recycled.  Local media reports several wind farms in the state are sending over 900 un-reusable blades to the Casper Regional Landfill to be buried. While nearly 90 percent of old or decommissioned wind turbines, like the motor housing, can be refurbished or at least crushed, fiberglass windmill blades present a problem due to their size and strength.

“Our crushing equipment is not big enough to crush them,” a landfill representative told NPR.

Prior to burying the cumbersome, sometimes nearly 300-foot long blades, the landfill has to cut them up into smaller pieces onsite and stack them in order to save space during transportation.

…click on the above link to read the rest of the article…

Surf’s Up!

Surf’s Up!

The wave of change is finally here. Are you prepared to ride it?

Nothing seems right anymore.

In whichever direction we choose to look, things are unraveling at a quickening pace.

Welcome to the Fourth Turning; and with it, a profound loss of trust in institutions and government.

Such lack of social cohesion is a hallmark of a Fourth Turning. Sadly, it’s happening at a time when society desperately needs to pull together, set aside our differences, and make some really big decisions.

Dirty Hands Everywhere

For my own part, my loss of trust in what is termed the ‘mainstream media’ (MSM) is nearly complete.  Its sins of omission and commission have piled up too high to forgive – the bank of trust I once had in it has lost every penny and is now in deep overdraft.

In my opinion its gravest sin is the willful and deliberate fracturing of society into many disparate warring camps. The MSM has a lot to answer for in that regard.

Similarly guilty is our political system.  The core power players are unable to hold each other accountable, revealing that we don’t have two parties after all, but rather a uniparty organized around power and money.

The rules are increasingly re-written to benefit a smaller and smaller group of elites at the expense of everyone else — and that’s now becoming increasingly crystal clear to the 99.9% who are getting screwed. The corrosive effects of that are going to take decades to resolve.

As a result, the social fabric is rending apart.  Stress is epidemic with more people than ever reporting being unhappy, unfulfilled, isolated and alone.  Suicide is the second leading cause of death.  It’s worse than just depression, it’s something far more insidious — it’s demoralization. There’s no hope left any more for too many of us.

A Dying Ecosphere

…click on the above link to read the rest of the article…

Russia Bets Big On The World’s Least Explored Oil Frontier

Russia Bets Big On The World’s Least Explored Oil Frontier

offshore africa

When the inaugural Russia-Africa summit was held in October 2019, most industry observers believed that the majority of projects under discussion would not get past the FID stage – in no small part because of their varied economic prospects. As well as wheat exports, nuclear technologies, conventional weaponry and ore mining, oil loomed large on the agenda. With the OPEC+ agreement entering its third consecutive year and oil prices stabilizing around $60 per barrel, Russian oil firms have enough cash to invest but face an uncertain future with domestic projects as no one really wants to see their own project ending up in the category of “spare production capacity”.

International sanctions and the ramifications they entail have compelled Russia to look beyond their usual investment regions – with little to no investments in Europe since 2014. Gazprom is now an unwelcome investor in Europe and even the privately-owned LUKOIL has mulled divesting its downstream assets and has reduced its retail presence in Europe. Investing in the United States or Canada is completely out of question for reasons predominantly political, whilst Middle Eastern NOCs have grown to become competitors, themselves looking for opportunities to diversify their portfolio. Due to all of the above factors, Africa has emerged somewhat naturally as a suitable region for Russian investment.

The Russian Energy Ministry has repeatedly declined to link Russia’s newly-found interest in Africa and the OPEC+ curtailments, saying that greenfield projects usually require 5-7 years before commissioning and thus the time gap between today’s issues and future production is too wide to impact any forecasts.

…click on the above link to read the rest of the article…

IEA: The Oil Glut Is Going Nowhere

IEA: The Oil Glut Is Going Nowhere

Barrels

Global oil markets will remain well supplied this year, with a possible overhang of some 1 million bpd, the head of the International Energy Agency, Fatih Bitol, told Reuters.close [x]ReplayUnmuteLoaded: 0%Progress: 0%Remaining Time -0:00CaptionsFullscreen

“Non-OPEC production is very strong. We still expect production coming from, not just United States, but also Norway, Canada, Guyana, among other countries,” Birol said, adding “Therefore, I can tell you that the markets are, in my view, very well supplied with oil, and as a result of that, we see prices remain at $65 a barrel.”

Norway is about to experience a sharp jump in oil production in the next four years, a new forecast from its Petroleum Directorate has shown. After a steady decline over several years, production is set for a 43-percent increase between 2019 and 2024, the NPD said, reaching 2.02 million bpd in 2024. This will be thanks to the start of production at the Johan Sverdrup offshore field along with several smaller fields.

In Guyana, Exxon has just begun production from the Liza-1 well. Daily output from the deepwater field should reach 120,000 bpd before the end of 2020. Exxon is also building a second production vessel that should raise the total to 220,000 bpd.

In Canada, meanwhile, oil production is also set to grow despite a government-imposed curtailment aimed at supporting prices. The curtailment was relaxed twice in 2019 and it only concerns large producers, allowing smaller ones to pump as much as they can sell. Based on this, the Canadian Conference Board recently forecast oil production in the country will be growing at 4.2 percent annually between this year and 2024.

Demand growth, however, will be slow, according to Birol.

“We are expecting a demand growth of slightly higher than 1 million barrels per day,” the top IEA man told Reuters.

This means that except sudden spikes in prices due to geopolitical factors or possible production outages in a major producer, oil prices this year will remain largely range-bound.

By Irina Slav for Oilprice.com

Emergency alert issued after ‘incident’ at Pickering Nuclear Generating Station

Emergency alert issued after ‘incident’ at Pickering Nuclear Generating Station

The Province of Ontario has issued an emergency bulletin related to an "incident" at the Pickering Nuclear Generating Station.
 The Province of Ontario has issued an emergency bulletin related to an “incident” at the Pickering Nuclear Generating Station. Global News

The Province of Ontario has issued an emergency bulletin after an “incident” at the Pickering Nuclear Generation Station

The emergency bulletin, which was sent out shortly after 7:20 a.m. on Sunday, said it applies to people within 10 kilometres of the facility.

“An incident was reported at the Pickering Nuclear Generating Station,” the alert said.

“There has been no abnormal release of radioactivity from the station and emergency staff are responding to the situation.”

The facility is located on Montgomery Park Road beside Lake Ontario, west of Brock Road.

The bulletin said people “do not need to take protective actions at this time.”

More to come.

Low Gas Prices Crush Appalachia Shale Boom

Low Gas Prices Crush Appalachia Shale Boom

Marcellus shale tower

Low natural gas prices have finally brought the decade-long shale gas boom in Appalachia to a halt.close

Gas production in Appalachia declined by about 1 billion cubic feet per day (Bcf/d) over the past 30 days, bringing output down to an average of 32.7 Bcf/d, according to S&P Global Platts Analytics. That helped drag down overall U.S. gas production to 91.8 Bcf/d, a 1.7 percent decline from 93.4 Bcf/d in November.

The Permian hogs a lot of attention in the press, but the Marcellus shale has been growing at a blistering rate for about a decade. That is now coming to an end as the shale gas industry struggles with oversupply and low prices, lack of profits, debt, investor skepticism and also competition from associated gas in the Permian.

Natural gas prices fell sharply last year, ending the year down more than 25 percent. The rig count in the Marcellus fell by 1 last week, dropping the total to 40. Eight months ago there were 65 rigs operating in the area.

Front-month gas contracts are trading at about $2.12/MMBtu, although at the wellhead prices can be much weaker. S&P said that prices at Dominion South, a hub in the Marcellus, have averaged just $1.78/MMBtu in the past month. S&P says that average breakeven prices are $1.80/MMBtu, but that likely understates the price level that drillers need, given the struggles that many have gone through. Related: How Long Will The Oil Price Fear Premium Last?

“Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” Toby Rice, EQT’s new president and CEO, told the West Virginian legislature in December “A lot of this development doesn’t work as well at $2.50 gas.”

…click on the above link to read the rest of the article…

The Quake Threat to Dams Posed by Fracking Was Long Warned

The Quake Threat to Dams Posed by Fracking Was Long Warned

A new trove of internal exchanges shaken loose by Ben Parfitt amplifies decades of safety urgings.

F3CBA861-9E63-4AF0-8300-138E5879B955.jpeg
A ‘shake map’ shows a magnitude 4.5 earthquake that hit northern BC late in 2018, likely caused by fluid injection. The map was created by Gail Atkinson, an expert who called for ‘no frack zones’ around dams. Illustration created by Gail Atkinson. Additional labels by The Tyee.

“Why is this so difficult?” a BC Hydro dam safety engineer plaintively asked his superiors seven years ago.

He’d been stymied again in proposing that because the risks of earthquakes caused by fracking were clear, preventing disaster required creating “no frack” zones around dams.

His sense of urgency runs through a long thread of discussions within BC Hydro and the Oil and Gas Commission surfaced by investigative researcher Ben Parfitt.

For years now the two crown agencies have been reluctant to publicly talk about the risks earthquakes triggered by the oil and gas industry pose to critical dam infrastructure throughout northeastern B.C.

But a freedom of information request by Parfitt at the Canadian Centre for Policy Alternatives has shed new light on what has been a long and often acrimonious internal debate.

Hundreds of emails, letters, memos and meeting notes released by the utility in response to Parfitt’s request and his just published investigationmake the following important revelations:

Officials at BC Hydro have been concerned about the shale gas industry since 2007 when coal bed methane extraction resulted in seismic activity at the Peace Canyon Dam near Hudson Hope. 

The Peace Canyon Dam, which provides six per cent of the province’s electricity, is built on fragile shale rock and wasn’t built to withstand even modest earthquakes.

…click on the above link to read the rest of the article…

Expect low oil prices in 2020; tendency toward recession

Expect low oil prices in 2020; tendency toward recession

Energy Forecast for 2020

Overall, I expect that oil and other commodity prices will remain low in 2020. These low oil prices will adversely affect oil production and several other parts of the economy. As a result, a strong tendency toward recession can be expected. The extent of recessionary influences will vary from country to country. Financial factors, not discussed in these forecasts, are likely also to play a role.

The following are pieces of my energy forecast for 2020:

[1] Oil prices can be expected to remain generally low in 2020. There may be an occasional spike to $80 or $90 per barrel, but average prices in 2020 are likely to be at or below the 2019 level. 

Figure 1. Average annual inflation-adjusted Brent equivalent oil prices in 2018 US$. 2018 and prior are as shown in BP’s 2019 Statistical Review of World Energy. Value for 2019 estimated by author based on EIA Brent daily oil prices and 2% expected inflation.

Figure 2 shows in more detail how peaks in oil prices have been falling since 2008. While it doesn’t include early January 2020 oil prices, even these prices would be below the dotted line.

Figure 2. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.

Oil prices can temporarily spike because of inadequate supply or fear of war. However, to keep oil prices up, there needs to be an increase in “demand” for finished goods and services made with commodities. Workers need to be able to afford to purchase more goods such as new homes, cars, and cell phones. Governments need to be able to afford to purchase new goods such as paved roads and school buildings.

…click on the above link to read the rest of the article…

Tanker Operators Suspend Travel Through Strait Of Hormuz

Tanker Operators Suspend Travel Through Strait Of Hormuz

Following Iran’s decision to lob missiles at US-Iraqi bases last night, several major tanker operators have suspended sailing through the Straits of Hormuz, the site of several tanker attacks last year.

Petrobras, Bahri – Saudi Arabia’s state-run tanker operator – and other tanker companies have suspended sailing through the Straits of Hormuz, WSJ reports, citing unidentified people familiar with the matter.

Meanwhile, Gulf officials are already trying to convince the world that there’s nothing to worry about in what’s essentially a tinderbox inside another tinderbox. United Arab Emirates’ Energy Minister Suhail al-Mazrouei said on Wednesday he saw no immediate risk to oil passing through the critical gateway through which 20% of the global supply of crude travels. al-Mazrouei made the comments on the sidelines of a conference in Abu Dhabi, the UAE capital.

The source of their concerns is clear: Iran carried out its “retaliation” for the killing of General Suleimani last night – though the Pentagon has confirmed that there have been no American casualties from Iran’s strikes. However, many fear that Iran isn’t finished with its retaliation. 

Mazrouei added that OPEC was not discussing any precautionary steps at the moment, but would re-evaluate the situation if a supply shortage emerged, according to Reuters. He said earlier that the global oil market was well supplied.

Oil prices initially moved higher after last night’s attacks, but prices have since settled, and the market largely ignored the news about the tanker suspensions, as it was already largely priced in.

On Tuesday, Washington warned about “the possibility of Iranian action against US maritime interests” in the Middle East.

“U.S. commercial vessels are advised to exercise caution and coordinate vessel voyage planning for transits of the Persian Gulf and nearby waterways,” the U.S. Maritime Administration said in a statement on its website.

…click on the above link to read the rest of the article…

2020 Will Be A Crucial Year For Oil

2020 Will Be A Crucial Year For Oil

Oil

It’s the start of a new year and a new decade, and the oil market is as unpredictable as ever.

Will OPEC+ extend its cuts? Will U.S. shale finally grind to a halt? Is this the “year of the electric vehicle”? Here are 10 stories to watch in 2020.

Shale debt, shale slowdown. The debt-fueled shale drilling boom is facing a reckoning. Around 200 North American oil and gas companies have declared bankruptcy since 2015, but the mountain of debt taken out a few years ago is finally coming due. Roughly $41 billion in debt matures in 2020, which ensures more bankruptcies will be announced this year. The wave of debt may also force the industry to slam on the breaks as companies scramble to come up with cash to pay off creditors.

Year of the EV. Some analysts say that 2020 will be the “year of the EV” because of the dozens of new EV models set to hit the market. In Europe, available EV models will rise from 100 to 175. The pace of sales slowed at the end of last year, but the entire global auto market contracted. EVs may struggle to keep the pace of growth going, but EVs are capturing a growing portion of a shrinking pie.

Climate change. 2020 starts off with hellish images from the out-of-control Australian bushfires. 2019 was one of the warmest years on record and the 2010s was the warmest decade on record. As temperatures rise and disasters multiply, pressure will continue to mount on the oil and gas industry. As Bloomberg Opinion points out, climate change has surged as a point of concern for publicly-listed companies. Oil executives are betting against climate action, but they are surely aware of the rising investment risk. In the past two months, the European Investment Bank is ending financing for oil, gas and coal, and Goldman Sachs cut out financing for coal and Arctic oil. More announcements like this are inevitable.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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