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Ivy League Universities Pushing Oil Industry Agenda With No Accountability
Ivy League Universities Pushing Oil Industry Agenda With No Accountability
Harold Hamm isn’t the kind of guy you’d expect to be name dropping Ivy League schools. Born in Oklahoma, his education ended with his graduation from high school. Which didn’t stop him from becoming a multi-billionaire by building his own oil and gas fracking company, Continental Resources — a company that bills itself as “America’s Oil Champion.”
So for a self-made man from oil country, it wasn’t surprising to see a PowerPoint slide with the bullet points “Rigs, Rednecks, and Royalties” during his presentationthis June at the annual Energy Information Administration conference in Washington, D.C. Although when he referred to the oil producing sections of the U.S. as “Cowboyistan” it didn’t get the laugh he was probably expecting.
What was a bit surprising was to see him touting the work of Columbia and Harvard to support his argument to lift the ban on exporting crude oil produced in the US.
“There have been a dozen studies so far, everyone of them come[sic] out with the same thing – lower gasoline prices….These are not folks who write about our industry all the time. We’re talking Columbia, we’re talking Harvard…”
Now, Hamm’s attempt to distance Columbia and Harvard from the oil industry was probably a clever tactic and not based on ignorance. Hamm has probably spent more time in D.C. this year than some members of Congress.
From the EIA conference to multiple appearances before congressional committees, Hamm has been pushing to get the oil export ban lifted.
Either way, he is wrong to say that Columbia and Harvard don’t write about the oil industry all of the time.
At Columbia University there is a rather new division of the school that does just that called the Center on Global Energy Policy(CGEP).
…click on the above link to read the rest of the article…
The Dismal Thing Schlumberger CEO Just Said about US Oil
The Dismal Thing Schlumberger CEO Just Said about US Oil
2016 to be brutal. Then, dreams of “potential spike in oil prices”
An engineer in the oil industry, who’d sold his house in Houston and bailed out after finding work in another state, just told me this:
A young civil engineer that I am working with is looking for more permanent, stable work. He talked with a head hunter today. The head hunter suggested that the young engineer stay where he is. He said he had 30,000 resumes in his database of engineers who were looking for work right now. Just amazing. I don’t know how many engineers there are in Houston. 200,000? 300,000?
I then called a friend of mine who works for Jacobs. Well, he no longer works there. He was laid off. A very seasoned engineer. He said he was glad I left Houston and that things were looking grim. Fluor and Technip had also laid off a lot of engineers. He said he heard that Fluor, which goes after megaprojects, had laid off 30 Process Engineers – which is what I am.
This is a bad indication. We are the first line of engineers on a project. Then, as the project moves forward, instrument, estimating, electrical, and structural engineers are brought on. If process engineers (chemical engineers) aren’t being used, that means there are fewer projects coming up to keep them busy.
So what happened to the hopes for a recovery?
Three months ago, Paal Kibsgaard, CEO of oil-field services giant Schlumberger, figured the oil industry in the US had bottomed out. But on Friday during the earnings call, he changed his tune.
The business environment “clearly got worsened in the third quarter,” he said. It’s going to get even worse in the US in the fourth quarter. And 2016 is going to be very tough. He doesn’t see a recovery until 2017.
…click on the above link to read the rest of the article…
Can The Oil Industry Really Handle This Much Debt?
Can The Oil Industry Really Handle This Much Debt?
As the crude industry has been wrestling with low oil prices that declined by over 50 percent since its highest close at $107 a barrel in 2014, many exploration and production companies worldwide and in the U.S., in particular, have faced large shortfalls in revenue and cash flow deficits forcing them to cut down on capital expenditures, drilling and forego investments in new development projects.
High debt levels taken on by the U.S. oil producers in the past to increase production while oil prices soared, have come back to haunt oil and gas companies, as some of the debt is due to mature by the end of this year, and in 2016. Times are tough for U.S. shale oil producers: Some may not make it, especially given that this month, lenders are to reassess E&P companies’ loans conditions based on their assets value in relation to the incurred debt.
Throughout the oil price upturn that lasted until the middle of 2014, companies sold shares and assets and borrowed cash to increase production and add to their reserves. According to the data compiled by FactSet, shared with the Financial Times, the aggregate net debt of U.S. oil and gas production companies more than doubled from $81 billion at the end of 2010 to $169 billion by this June
In the first half of 2015, U.S. shale producers reported a cash shortfall of more than $30 billion. The U.S. independent oil and gas producers’ capital expenditures exceeded their cash from operations by a deficit of over $37 billion for 2014.
In July – September 2015, after a couple months of a rebound, a further slump in crude futures prices fluctuated between $39-47/bbl, thus putting more strain on the oil-and-gas producers, and making them feel an even tighter squeeze.
…click on the above link to read the rest of the article…
Secret files: British government courting Arab tyrants, fossil fuel interests
Secret files: British government courting Arab tyrants, fossil fuel interests
Official documents show how oil and business interests trump democracy
The approach reflects the consistent focus of Britain’s strategy in the region on promoting “stability” through energy investments and arms sales with authoritarian regimes and outright dictatorships.
Responding to an FOI request in February, the UK Foreign & Commonwealth Office (FCO) Middle East and North Africa Directorate provided a list of meetings hosted by other governments or companies attended by Edward Oaken, then the FCO’s Director for the Middle East.
According to the list, Oakden was hosted fifty-nine times during a period of just over a year, almost entirely by autocratic Arab regimes, fossil fuel companies, and corporate interests.
Oakden was FCO Middle East director from 2013 to 2015 before being appointed British Ambassador to Jordan in February,
From 18th September 2013 to 14th January 2015, Oakden had a total of 26 “hospitality” meetings with representatives of serial human rights abusers — Saudi Arabia, Qatar, Bahrain, Kuwait, Egypt, Oman and Morocco — and a further 15 with business groups, investors, and oil companies.
The rest were largely routine meetings with British and European political leaders.
The FCO conceded that the list of meetings provided was not exhaustive.
Blood for oil for cash
The Foreign Office meetings included three receptions hosted by British Petroleum (BP), including a “high level dinner” to discuss “global energy challenges”; a Genel Energy annual reception; and a lunch meeting with Centrica Energy “on business prospects in the Middle East.”
British firms BP and Genel are heavily invested in Iraq. BP is involved in the giant Rumailah oil field and the huge northern Kirkuk field in the Kurdish region, while Genel is invested primarily in Iraqi Kurdish fields of Taq Taq and Tawke.
…click on the above link to read the rest of the article…
Nicole Foss Talks Energy Industry Issues and Oil Price Collapse
Nicole Foss Talks Energy Industry Issues and Oil Price Collapse
Part I- Energy Industry Issues
The Doomstead Diner site blurb:
Coal Industry Collapse-Carbon Sequestration
One of the biggest effects we see lately is a collapse in commodity prices, through all sectors. Most intriguing to me is the collapse in coal prices, since coal is used in so many places for the production of electricity. Several large coal mining companies have gone into bankruptcy. How will this affect electricity production as we move along here? Q2: Will the efforts for Carbon Sequestration, Carbon Credits and Taxation have any meaningful effect on this dynamic?
Oil Price Collapse
Many people thought the price collapse in Oil that came at the end of 2014 was unforseen and unknowable. In fact many people in the peak oil community believed for a long time the price of oil would spiral inexorably upward. Some of us here have argued otherwise, that credit constraints would drive the price downward. Steve did the best job of this, and actually pegged the price crash for oil to the month more than two years in advance with his infamous Triangle of Doom charts. Steve, can you tell us how you were able to pull off that stunt? Q: John Mauldin and other shills for the Oil industry assure us that better and cheaper drilling technology will bring up all the oil we need and keep the industry solvent. How realistic is this?
Market Meltdown Means More Pain for Oil Producers
Market Meltdown Means More Pain for Oil Producers
Supply-side downward price pressure has been the story of global energy prices over the past year: newfound supply from the Shale Revolution, OPEC’s gambit of market-share grabbing inundation, and new supply coming online from Iraq and soon Iran. The result was a plunge in oil prices from $115 in mid-June 2014 to below $70 by mid-December, and then to the low $40s as of last week.
Now we are seeing signs of a new economic crisis, one that began in Asia and spread to Europe and North America. China’s stock market meltdown has gathered pace and the recent yuan devaluation stands as a grim omen of not only tepid Chinese growth, but a lack of currency stability in the region should the crisis deepen. The 8% drop in Chinese exports in July is leading to a few uncomfortable questions of oversupply and a lack of global demand – systemic issues that transcend the sphere of domestic economic policy in China – and a looming currency war will only serve to make things worse.
The precise bottom of this newest sell-off in global equity markets is open to speculation, but in terms of oil prices it represents demand-side downward pressure and, depending on how things pan out, the potential for a whole lot more of it. WTI crude was down over 3% in pre-market trading to flirt with the sub-$39 range.
This is a scenario that is various degrees of terrifying for oil-producing economies, many of which have weathered the past eight months with a combination of fiscal austerity, asset sales, debt issuance, and burning through foreign reserves – basically holding on for dear life and hoping for a price rebound which now looks to have been pushed further into the future.
California Oilfield Operators Refuse To Report Water Usage, In Violation Of The Law
How much water does California’s oil and gas industry actually use? We still don’t know, despite a 2014 law signed by Governor Jerry Brown that went into effect this year requiring companies to report on all water produced, used and disposed of by oilfield operations.
Oil and gas regulators with California’s Division of Oil, Gas and Geothermal Resources (DOGGR) missed the first reporting deadline, April 30, claiming they had simply received too much data to process in time. But now we know there was probably another reason: hundreds of companies had flat out refused to obey the law.
In fact, more than 100 companies still refuse to comply with the water reporting requirements altogether.
DOGGR extended the filing date for the first quarter of 2015 to June 1, and has now, at long last, released the first report on oilfield water usage and disposal — though more than 100 companies still haven’t submitted any data to the state despite the extension.
According to the report, just 166 oilfield operators filed their quarterly water report by June 1, prompting DOGGR to issue 289 Notices of Violation to companies that failed to meet the extended deadline. Some 146 companies complied with the violation notices and did submit their water usage data, but 104 operators remain out of compliance and at risk of civil penalties.
No fines or other penalties have been levied against noncompliant companies so far.
DOGGR says the data it did receive, and on which the report is based, represents “approximately 59 percent of the produced water, and 41 percent of the injected water during the first quarter.” The agency did not verify the accuracy of the data self-reported by oilfield operators.
…click on the above link to read the rest of the article…
Why Oil As An Election Issue Is Bad News For Canada
Why Oil As An Election Issue Is Bad News For Canada
When oil becomes an election issue it is rarely good news.
After Joe Clark’s minority PC government was defeated in 1979 over gasoline taxes in a budget, the subsequent Liberal administration introduced the National Energy Program. In 2008, Ed Stelmach’s Alberta PCs campaigned on the New Royalty Framework and won big. Earlier this year Alberta’s new NDP government promised higher corporate taxes and a royalty review if elected. The taxes became law July 1 and royalties will hopefully be clear soon.
Historically, the issue has been revenue; producers are excessively profitable, consumers should pay less and government must collect more. Taxes and royalties have gone up and down but, eventually, industry has been left with sufficient cashflow to maintain and grow the business. However, on multiple occasions, levies were raised first then cut later only because of devastating economic outcomes.
Oilfield services (OFS) is usually the first casualty of major energy policy changes. Often OFS job losses and bankruptcies provide clear signals policies are damaging. But as a key stakeholder, OFS has yet to figure out how to prevent the damage.
The essence of the oil sands debate this election is whether output should be allowed to grow. Some don’t want oil sands produced at all. NDP leader Thomas Mulcair, currently leading or tied in public opinion polls, is avoiding being this clear, preferring to dodge and weave on major pipeline projects.
While the outcome won’t be known until the votes are counted on October 19, there is good reason to be concerned whether this giant economic driver of the modern Canadian economy will grow at past levels anytime soon, if ever.
…click on the above link to read the rest of the article…
The Peak Oil Crisis: A $4 Trillion Hole
The Peak Oil Crisis: A $4 Trillion Hole
Last week reporters at the Wall Street Journal sat down and did some arithmetic. They looked at how much oil was selling for in the spring of 2014 (over $100 a barrel); looked at what it is selling for today (under $50); and concluded that if prices stay low for the next three years, the global oil industry and the countries it finances will be out $4.4 trillion in revenues. As these oil companies, nationalized and publically traded, will be producing roughly the same amount of oil in the next few years, the $4 trillion will have to come mostly out of profits or capital expenditures.
This is where the problem for the future of the world’s oil supply comes in. The big oil companies, especially those that export much of their production, have been doing quite well in recent years. National oil companies have earned vast profits for their political masters. Publically traded ones have developed a tradition of paying out good dividends which they are loathe to cut.
This leaves mostly capital expenditures on exploring for and producing more oil in coming years to take a dive as part of the $4 trillion revenue hit. Even if oil prices of $50 a barrel or less do not continue for the next three years, this still works out to a revenue drop of $1.5 trillion a year or about three times the planned capital expenditures of some 500 oil companies recently surveyed.
The International Energy Agency just came out with a new forecast saying that while current oil prices have the demand for oil products increasing rapidly, there is still so much over-production that the oil glut is expected to last for another year or more before supply/demand comes back into balance. The return of Iran to unfettered production would not help matters.
…click on the above link to read the rest of the article…
The Layoffs Return: Energy Giants Chevron, Saipem To Fire Over 10,000 Workers
The Layoffs Return: Energy Giants Chevron, Saipem To Fire Over 10,000 Workers
In the beginning of 2015 the biggest threat to the economy as a result of the collapse in oil prices, both in the US and worldwide, was the surge in layoffs among highly-paid energy sector job. This was confirmed in April when we showed the Challenger layoffs data for the energy-heavy state of Texas, and the energy sector in general where the 37,811 job cuts in Q1 were some 3,900% higher than a year earlier.
Then in Q2, after the price of oil staged a substantial rebound of about 50% from the year to date lows in the $40’s, energy-related layoffs trickled to a halt as corporations hoped the worst is behind them, and as a result would merely bide their time before redeploying their workforce toward exploration and production.
Alas, this was not meant to be, and as the events of the last month have shown, oil has resumed its downward slide. And, as expected, so have layoffs.
Overnight, US energy major Chevron announced it will cut 1,500 jobs globally “as the company aims to reduce internal costs in multiple operating units and the corporate center.” According to Rigzone, “the San Ramon, Calif.-based energy company will cut 950 positions in Houston, 500 positions in San Ramon and 50 positions internationally.”
Chevron is cutting jobs due to the current market environment and is “focused on increasing efficiency, reducing costs and focusing on work that directly supports business priorities,” Chevron spokesperson Melissa Ritchie said in an email to Rigzone.
Chevron will be cutting 1,500 employee positions across the 24 groups that comprise the corporate center; 270 of the positions are existing vacancies that will not be filled. Additionally, 600 staff augmentation contractor positions will be cut in the corporate center.
…click on the above link to read the rest of the article…
Premiers conference could see clash over pipelines and emissions
Saskatchewan Premier Brad Wall signals growing frustration with Ontario, Quebec
Canada’s longest serving premier isn’t happy. Not one bit. And Brad Wall is letting some of his colleagues know it before he arrives in St. John’s for the annual meeting of the country’s provincial and territorial leaders.
Wall told reporters in his home province of Saskatchewan that Ontario and Quebec should get out of the way of proposals to build or convert pipelines to carry oil from west to east.
And he said it’s high time Central Canada stops treating this country’s oil industry as some kind of environmental liability, rather than as an economic benefit that’s being shared, via transfer payments, with the entire country.
“We’ve been contributing mightily to equalization, and I just don’t think this kind of talk is welcome, frankly,” Wall said Wednesday.
But Wall wasn’t done. Far from it. On he went about the billions of dollars shared by wealthy, oil-producing provinces such as Saskatchewan, with the so-called have-not provinces such as, ahem, the aforementioned Ontario and Quebec.
“Maybe we should send equalization payments through a pipeline to get one approved in Central Canada.”
It’s the kind of internal conflict that rarely disrupts the carefully crafted united front premiers try to present at their annual meetings. Premiers normally prefer to cast the federal government as the villain.
Premier Wall, meet Premier Wynne
But this isn’t some, forgive the pun, off-the-wall broadside.
Saskatchewan is an oil-producing province, already struggling with the effects of sustained low prices. It’s also struggling with few options to move that oil.
Premier Kathleen Wynne has been pushing on the green agenda, which could bring her into conflict with the oil-producing provinces. (Sean Kilpatrick/Canadian Press)
Ontario’s Kathleen Wynne wasn’t responding to questions Wednesday at a reception welcoming premiers to St. John’s. But she indicated she’ll have plenty to say today when premiers hold their first session in the Hotel Newfoundland, overlooking St. John’s historic harbour.
…click on the above link to read the rest of the article…
Canadian Economy More Damaged By Oil Prices Than Expected
Canadian Economy More Damaged By Oil Prices Than Expected
Canada’s oil industry has had a rough couple of months with production and exports taking a hit.
Low oil prices are cutting into the profits of major producers. Producing from Alberta’s oil sands is costly and requires a high oil price to justify the expense.
In fact, the fall in prices could significantly impact production levels decades from now. Oil companies are shelving large investments because they no longer look profitable. For example, earlier this year Royal Dutch Shell abandoned a potential 200,000 barrel-per-day oil sands mine. Overall, Canada’s oil patch could see a $23 billion cut in investment in 2015, a decline of almost a third from last year. Unless oil prices bounce back, a lot of projects may not move forward.
Lack of investment now translates to lower oil production in the future. Canada may only produce 5.3 million barrels per day in 2030, according to the Canadian Association of Petroleum Producers (CAPP), much lower than the 6.4 million barrels per day the group predicted last year.
Related: Forget Asia. US Natural Gas To Be Exported To Mexico
But again, a lot depends on what happens with oil prices. The decision by OPEC to play for market share doesn’t bode well.
“It really depends on how long OPEC decides they want to keep pricing at this level with their quotas that they’ve established,” Greg Stringham, CAPP vice-president of markets and oil sands, told the Financial Post.
The contraction underway in Canada’s oil sands has been hugely damaging to the broader Canadian economy. First quarter GDP declined by the most in over six years, falling 0.6 percent on an annualized basis. The figures stunned most economists who had expected modest growth, and it indicates that Canada’s economy is feeling the pain of low oil prices much worse than previously expected.
…click on the above link to read the rest of the article…
Oil Industry Can No Longer Ignore Climate Action
Oil Industry Can No Longer Ignore Climate Action
Global momentum towards action on climate change is building in the lead up to international negotiations, set to take place later this year in Paris. With the writing on the wall, some of the largest oil companies are banding together in order not to be left out in the cold.
The agreement emerging from Copenhagen in 2009 was widely seen as a failure. While the likelihood of a stringent international agreement with binding emissions targets resulting from the Paris talks is extremely low, the world appears to be mustering up the motivation to do something.
Whether that has a real impact on the fortunes of the oil and gas industry remains to be seen, but to avoid being left out of the conversation, oil companies including Total, Eni, Saudi Aramco, BG, Royal Dutch Shell, and others have come together to form an industry group to weigh in on the negotiations. The group will announce the establishment of a think tank in June.
Related: Shell Approval May Trigger Resource Race In The Arctic
Sensing an emerging threat from climate action, the new think tank will establish common industry-wide positions on responding to climate change, such as pushing natural gas as an alternative to coal. By speaking together they hope to have their collective voice heard and avoid being caught flatfooted in the event that aggressive emissions reductions policies get put into place.
Thus far, the group appears to consist of European companies, with oil majors ExxonMobil and Chevron staying out.
But ExxonMobil is eyeing the rising green tide as well. ExxonMobil even sent lobbyists to Vatican City as it became known that the Pope was going to write an encyclical – or a letter that lays out Catholic teachings – ahead of the Paris negotiations in favor of environmental protection. ExxonMobil wanted to brief the Vatican on its take on the future of energy.
…click on the above link to read the rest of the article…
Oil industry pushing for carbon tax in Alberta
But if heavy emitters are going to pay, they want consumers to share the burden
The biggest players in Canada’s oil and gas industry are urging Alberta’s government to step up its environmental policies and introduce a carbon tax.
Alberta already has carbon pricing, but the program is limited and it will expire in the next few months.
Suncor CEO Steve Williams told a crowd in downtown Calgary on Friday that change is needed in Alberta to improve Canada’s global reputation.
“We’re trying to move Canada to a position of leadership, that’s not how we are viewed around the world at the moment. We are viewed to be quite the opposite,” said Williams.
- How Canada’s provinces are tackling greenhouse gas emissions
- Rising carbon emissions from oilsands a ‘unique’ challenge, federal cabinet told
Suncor, along with fellow Canadian energy company Cenovus, says the time is right for Alberta to address its environmental policies. But they also say if the province adopts a carbon tax, it should be broad based and apply to everyone.
That includes consumers. The idea is that industry will pay a carbon tax, but so too will the average person. That would include having to pay extra at the pumps and on their natural gas and electricity utility bills.
“Absolutely,” said Williams. “A realization by the consumer is really important because if you want energy efficiency, if you want people to change their behaviours and affect the demand side, you have to get to those users.”
Alberta’s next premier, Rachel Notley, will be sworn in this weekend. She’s already facing pressure to address the province’s carbon emissions. Alberta produces 36 per cent of Canada’s total emissions.
Environmentalists Are Taking California To Court Over Illegal Oil Industry Wastewater Injection
Environmentalists Are Taking California To Court Over Illegal Oil Industry Wastewater Injection
Environmentalists filed a motion requesting a preliminary injunction today in a California court to immediately stop the daily illegal injection of millions of gallons of oil field wastewater into protected groundwater aquifers in the state.
Last week, Earthjustice filed a lawsuit on behalf of the Sierra Club and the Center for Biological Diversity in Alameda County Superior Court that challenges California regulators’ emergency rules meant to rein in the state’s disastrous Underground Injection Control (UIC) program.
Officials with the state’s Division of Oil, Gas, and Geothermal Resources (DOGGR) have admitted that their agencyimproperly permitted more than 2,500 wells to pump oil industry wastewater and fluids from enhanced oil recovery techniques like acidization and steam flooding into groundwater aquifers that should be protected under the federal Safe Drinking Water Act.
Instead of shutting down the offending wells, however, DOGGR issued emergency rules last February that would allow many of them to continue operating until 2017, according to the complaint filed by Earthjustice, which seeks to have the new rules thrown out and the wells operating in protected aquifers shut down while new regulations are being developed.
“Both the emergency regulations and the status quo fail to protect California’s underground drinking water sources from harm,” the complaint states. “Since DOGGR continues to fail in implementing its regulatory duties, this Court must vacate the emergency regulations and ensure that DOGGR complies with the law by ordering DOGGR to take all immediate action necessary and available to it to meet its obligations to prohibit illegal injection of wastewater into protected aquifers.”
…click on the above link to read the rest of the article…
