The 3 Week Diet System

Friday, October 31, 2014

The Global Average Retail Price of Gasoline is Expected to Reach $10.75 Per Gallon by 2035, According to Navigant Research

BOULDER, Colo.--()--A recent report from Navigant Research analyzes the global road transportation fuels market by alternative fuel and vehicle segment, including global market forecasts for energy, oil, and fuel consumption, segmented by country and vehicle segment, through 2035.
“The energy supply chain for the road transportation sector is changing quickly as a result of government policies and consumer interest in reducing fuel costs”
Although conventional fuels, such as gasoline and diesel, will represent the lion’s share of energy consumption for road transportation during the next 20 years, the consumption of gasoline is expected to slowly decrease as alternative fuels and diesel become more popular. Helping to drive these alternatives will be the rising price of gasoline. Click to tweet: According to a recent report from Navigant Research, the global average retail price of gasoline is expected to rise from $4.89 per gallon in 2014 to $10.75, accounting for inflation, in 2035.
“The energy supply chain for the road transportation sector is changing quickly as a result of government policies and consumer interest in reducing fuel costs,” says Scott Shepard, research analyst with Navigant Research. “Alternative fuels are often cheaper than both gasoline and diesel on a per-mile basis and, therefore, are likely to attract increasing consumer interest.”
Many countries have adopted policies aimed at reducing oil consumption, according to the report, including subsidizing alternative fuels and alternative fuel vehicles, biofuels mandates, and higher fuel economy requirements for new vehicles. As a result, gasoline consumption for road transportation is expected to peak in 2021, reaching 367.3 billion gallons per year, and start to fall thereafter, declining to 348.1 billion gallons per year in 2035.
The report, “Transportation Forecast: Global Fuel Consumption”, analyzes the global road transportation fuels market by alternative fuel and vehicle segment (light duty vehicles and medium and heavy duty vehicles). Analysis and data are provided for the following fuels: gasoline, diesel, ethanol, biodiesel, drop-in biofuels, natural gas, liquefied petroleum gas, electricity, and hydrogen. Global market forecasts for energy, oil, and fuel consumption, segmented by country and vehicle segment, extend through 2035. An Executive Summary of the report is available for free download on the Navigant Research website.
About Navigant Research
Navigant Research, the dedicated research arm of Navigant, provides market research and benchmarking services for rapidly changing and often highly regulated industries. In the energy sector, Navigant Research focuses on in-depth analysis and reporting about global clean technology markets. The team’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Utilities, Smart Transportation, and Smart Buildings sectors. Additional information about Navigant Research can be found at
About Navigant
Navigant is a specialized, global expert services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities. Through senior level engagement with clients, Navigant professionals provide services that extend from expert and advisory work through implementation and outsourcing. The firm combines deep technical expertise in Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism to address clients’ needs in highly regulated industries including Construction, Energy, Financial Services and Healthcare. More information about Navigant can be found at
* The information contained in this press release concerning the report, “Transportation Forecast: Global Fuel Consumption,” is a summary and reflects Navigant Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Navigant Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.

Thursday, October 30, 2014

Hungary's MOL to build new oilfield in Iraqi Kurdistan

Photo: MOL  
October 31, 2014

BUDAPEST/LONDON,— The Kurdistan Regional Government in Iraq has approved a major new oil field development majority-owned by Hungary's MOL, the company said on Thursday.

The minister of natural resources has given the green light for the field development plan of the Akri-Bijeel Block adjacent to the region's largest oil field, Shaikan, a year after MOL found enough oil to make the project commercially viable.

A number of oil field operators in Iraqi Kurdistan were forced to temporarily curb production this year as the advance of Islamic State militants threatened workers' security.

"MOL Group is committed to maintain its presence and increase investments in the region," Alexander Dodds, MOL's upstream executive vice president, said.

MOL's minority partner in the Akri-Bijeel project is Gulf Keystone Petroleum (GKP).

The partners will tackle the project in two phases, with the first starting immediately and on determining details such as how much oil can be recovered and overall costs.

Shares (Berlin: DI6.BE - news) in MOL traded up 0.3 percent at the open while GKP jumped 8 percent. 

Copyright ©, respective author or news agency, Reuters

Stansberry's Matt Badiali On The Companies That Could Thrive In A Cheap Oil And Gas World

October 31:


  • Cheap energy trumps cheap labor any day.
  • The entire oil sector has just gone on sale, including the companies building the infrastructure.
  • Peak oil is no longer a problem, but peak storage is.
Cheap oil prices and the economic prosperity they bring can make politicians and investors look smarter than they are. In this interview with The Mining Report, Stansberry Research Editor Matt Badiali shares the secrets for finding underappreciated commodities and companies before they become overpriced, and names his favorites.
The Mining Report: You have said that Hillary Clinton could go down in history as one of the best presidents ever. Why?
Matt Badiali: Before we get your readership in an uproar, let me clarify that the oddsmakers say that Hillary Clinton is probably going to take the White House in the next election. Even Berkshire Hathaway (NYSE:BRK.A) CEO Warren Buffett said she is a slam dunk. I'm not personally a huge fan of Hillary Clinton, but I believe whoever the next president is will ride a wave of economic benefits that will cast a rosy glow on the administration.
Her husband benefitted from the same lucky timing. In the 1980s, people had money and felt secure. It wasn't because of anything Bill Clinton did. He just happened to step onto the train as the economy started humming. Hillary is going to do the same thing. In this case, an abundance of affordable energy will fuel that glow. The fact is things are about to get really good in the United States.
TMR: Are you saying shale oil and gas production can overcome all the other problems in the country?
MB: Cheap natural gas is already impacting the economy. In 2008, we were paying $14/thousand cubic feet [$14/Mcf]. Then, in March 2012, the price bottomed below $2/Mcf because we had found so much of it. We quit drilling the shale that only produces dry gas because it wasn't economic. You can't really export natural gas without spending billions to reverse the natural gas importing infrastructure that was put in place before the resource became a domestic boom. The result is that natural gas is so cheap that European and Asian manufacturing companies are moving here. Cheap energy trumps cheap labor any day.
Some peripheral beneficiaries from this cheap energy are in the chemical space. Dow Chemical Co. (NYSE:DOW) and others that make things from petroleum will benefit. One of my favorite plays on cheap energy right now isCF Industries Holdings Inc. (NYSE:CF), a nitrogen fertilizer company. The single biggest cost to this company is natural gas. That is a great business as long as natural gas prices stay low.
The same thing is happening in tight crude oil. We are producing more oil today than we have in decades. We are filling up every tank, reservoir and teacup because we need more pipelines. And it is just getting started. Companies are ramping up production and hiring lots of people. By 2016, the U.S. will have manufacturing, jobs and a healthy export trade. It will be an economic resurgence of epic proportions.
TMR: The economist and The Prize author Daniel Yergin forecasted U.S. oil production of 14 million barrels a day [14 MMbbl/d] by 2035. What are the implications for that both in terms of infrastructure and price?
MB: Let's start with the infrastructure. The U.S. produces over 8.5 MMbbl/d right now; a jump to 14 MMbbl/d would be a 65% increase. That would require an additional 5.5 MMbbl/d.
To put this in perspective, the growth of oil production from 2005 to today is faster than at any other time in American history, including the oil boom of the 1920s and 1930s. And we're adding it in bizarre places like North Dakota, places that have never produced large volumes of oil in the past.
North Dakota now produces over 1.1 MMbbl/d, but doesn't have the pipeline capacity to move the oil to the refineries and the people who use it. There also aren't enough places to store it. The bottlenecks are knocking as much as $10/bbl off the price to producers and resulting in lots of oil tankers on trains.
And it isn't just happening in North Dakota. Oil and gas production in Colorado, Ohio, Pennsylvania and even parts of Texas is overwhelming our existing infrastructure. That is why major pipeline and transportation companies, likePlains All American Pipeline L.P. (NYSE:PAA) and Enterprise Products Partners L.P. (NYSE:EPD), have exploded in value. They already have some infrastructure in place and they have the ability to invest in new pipelines.
There's also a massive amount of growth coming in companies that can process oil quickly. Valero Energy Corp. (NYSE:VLO), a giant refining company, is adding to its existing capacity. Alon USA Energy Inc. (NYSE:ALJ), another refiner, is adding to its rail offloading capacity. It's actually ramping up from 13 Mbbl/d to 150 Mbbl/d at one California refinery.
The problem we are facing in refining is that a few decades ago we thought we were running out of the good stuff, the light sweet crude oil. So refiners invested $100 billion to retool for the heavier, sour crudes from Canada, Venezuela and Mexico. That leaves little capacity for the new sources of high-quality oil being discovered in our backyard. That limited capacity results in lower prices for what should be premium grades
One solution would be to lift the restriction on crude oil exports that dates back to the 1970s, when 
we were feeling protectionist. It is illegal for us to export crude oil. And because all the new oil is light sweet crude, the refiners can only use so much. That means the crude oil is piling up.
Peak oil is no longer a problem, but peak storage is. If we could ship the excess overseas, producers would get a fair price for the quality of their products. That would lead them to invest in more discovery. However, if they continue to get less money for their products, investment will slow. There is some good news on that front though.
Pioneer Natural Resources Co. (NYSE:PXD) produces ultralight crude oil called condensate from its Eagle Ford shale wells in Texas. The U.S. Department of Commerce, which regulates oil exports, approved the export of that condensate, if it is run through a simple "splitter." That's the simplest kind of refinery. Allowing companies to export split condensate could buoy falling oil prices and relieve some supply problems. However, it won't solve the whole problem.
TMR: If we do reach peak storage, where we all have oil stored in our swimming pools with no efficient way to move it or ability to export it, what is the price where it becomes uneconomic to produce?
MB: I was in San Antonio a couple weeks ago at Hart Energy's Discovering Unconventional Gas conference, and most of the producers said that at $65/bbl they can still make money, but at $45/bbl, they have to cut off production. Some fantastic oil company stock prices have already been demolished with the overall markets over the last few weeks. There has been a bloodbath, which is fantastic.
TMR: Is everything on sale, as Rick Rule likes to say?
MB: Everything is on sale. But the great thing about oil is it is not like metals. It is cyclical, but it's critical. If you want your boats to cross oceans, your airplanes to fly, your cars to drive and your military to move, you have to have oil. You don't have to buy a new ship today, which would take 
metals. But if you want that sucker to go from point A to point B, you have to have oil. That's really important. There have been five cycles in oil prices in the last few years.
Oil prices rise and then fall. That's what we call a cycle. Each cycle impacts both the oil price and the stock prices of oil companies. We measured the share prices with the Energy Select Sector SPDR Exchange-Traded Fund (NYSEARCA:XLE). These cycles are like clockwork. Their periods vary, but it's been an annual event since 2009. Shale, especially if we can export it, could change all of that.
The rest of the world's economy stinks. Russia and Europe are flirting with recession. China is a black box, but it is not as robust as we thought it was. Extra supply in the U.S. combined with less demand than expected is leading to temporary low oil prices. But strategically and economically, oil is too important for the price to get too low for too long.
I was recently at a conference in Washington, D.C., where International Energy Agency Executive Director Maria van der Hoeven predicted that without significant investment in the oil fields in the Middle East, we can expect a $15/bbl increase in the price of oil globally by 2025.
I don't foresee a lot of people investing in those places right now. A shooting war is not the best place to be invested. I was in Iraq last year and met the Kurds, and they're wonderful people. This is just a nightmare for them. And for the rest of the world it means a $15/bbl increase in oil.
For investors, the prospect of oil back at $100/bbl is not the end of the world. With oil prices down 20% from recent highs and the best companies down over 30% in value, it is a buying opportunity. It means the entire oil sector has just gone on sale, including the companies building the 
As oil prices climb back to $100/bbl, companies will continue to invest in producing more oil. And 
that will turn Hillary Clinton's eight-year presidency into an economic wonderland.
TMR: The last time you and I chatted, you explained that different shales have different geology with different implications for cracking it, drilling it and transporting it. Are there parts of the country where it's cheaper to produce and companies will get higher prices?
MB: The producers in the Bakken are paying about twice as much to ship their oil by rail as the ones in the Permian or in Texas are paying to put it in a pipeline. The Eagle Ford is still my favorite quality shale and it is close to existing pipelines and export infrastructure, if that becomes a viable option. There are farmers being transformed into millionaires in Ohio as we speak, thanks to the Utica Shale.
TMR: What are some companies that are doing a good job figuring out the secret recipe in their respective shales?
Halcón Resources Corp. (NYSE:HK) is run by the same management team that built Petrohawk Energy Corporation and sold it to BHP Billiton Ltd. (NYSE:BHP) when shale was a brand new thing. Halcón shares have been utterly destroyed in this downturn, but it is still a great company in the right place with the right people.
Sanchez Energy Corp. (NYSE:SN) is also an expert in the Eagle Ford right now. It's branching out into the Tuscaloosa Marine Shale in Louisiana. It hasn't found the sweet spots in the shale, but if oil gets to $100/bbl, these guys will find a way. In the meantime, Sanchez is profitable at current prices in the Eagle Ford. The Sanchez family has operated a private oil company in Texas for decades. I have a lot of respect for the management team. Sanchez is in parts of the Eagle Ford that people thought weren't going to be economic, and it is making the wells sing. In fact, Sanchez was 
able to cut its costs in half using new techniques, adding more sand to the wells and drilling multiple wells from a single pad.
I like both of these companies.
TMR: Do you see oil services as a way to leverage the quantity of oil coming out of the shale?
MB: If you were only going to buy one company to play all of the tight oil revolution, it would be Schlumberger Ltd. (NYSE:SLB), a behemoth of an oil services company that is essentially the Levi Strauss of the sector, a one-stop shop for fracking services, including imaging and materials.
TMR: What about the sands providers? Is that another way to play the service companies?
MB: Absolutely. The single most important factor in cracking the shale code is sand. If the pages of a book are the thin layers of rocks in the shale, pumping water is how the producers pop the rock layers apart and sand is the placeholder that props them open despite the enormous pressure from above. Today, for every vertical hole, drillers create long horizontals and divide them into 30+ sections with as much as 1,500 pounds of sand per section. A single pad in the Eagle Ford could anchor four vertical holes with four horizontal legs requiring the equivalent of 200 train car loads of sand.
That is why the shares prices of companies like U.S. Silica Holdings Inc. (NYSE:SLCA) and Hi-Crush Partners L.P. (NYSE:HCLP) soared. They are fairly recent public entities, but their share prices went straight up after their initial public offerings. It's because the volume of sand is just massive. Ironically, it's created a miniboom in states like Wisconsin, where a lot of this sand originates.
Investors need to distinguish between companies that provide highly refined sand for oil services and companies that bag sand for school playgrounds. Fracking sand is filtered and graded for consistency to ensure the most oil is recovered. Investors have to be careful about the type of 
company they are buying.
TMR: Coal still fuels a big chunk of the electricity in the U.S. Can a commodity be politically 
incorrect and a good investment?
MB: Coal has a serious headwind, and it's not just that it's politically incorrect. It competes with natural gas as an electrical fuel so you would expect the two commodities would trade for roughly the same price for the amount of electricity they can generate, but they don't. The Environmental Protection Agency is enacting emission standards that are effectively closing down coal-fired power plants. And because it is baseload power, you can't easily shut it off and turn it back on; it has to be maintained. That means it doesn't augment variable power like solar, as well as natural gas, which can be turned on and off like a jet engine turbine. So coal has two strikes against it. It is dirty and it isn't flexible.
Some coal companies could survive this transition, however. Metallurgical coal [met coal] companies, which produce a clean coal for making steel, have better prospects than steam coal. Along with steam coal, met coal prices are at a six-year low. One company stands out. Peabody Energy Corp. (NYSE:BTU) owns the largest coal mine [by production] in the world. The North Antelope Rochelle coal mine produces over 100 million tons per year. That's just from one of its mines. If you live in the lower 48 states [outside of the Northeast and California], there's a pretty good chance that your television is powered by one of Peabody's mines.
It is the world's largest private-sector coal company. The downturn in the coal price killed the stock price. I expected profit from its Australian met coal assets would keep the company's revenues up. But even met coal prices crashed. We sold our position to preserve our capital.
Generally, I want to own coal that can be exported to India or China, where they really need it. Japan has replaced a lot of its nuclear power with coal and Germany restarted all the coal-fired power plants it had closed because of carbon emissions goals. We are already seeing 
deindustrialization there due to high energy prices. Cheap energy sources, including coal, will be embraced. I just don't know when.
TMR: A number of experts we have talked to have said uranium is getting ready to turn up. Are 
you investing in uranium?
MB: I do own uranium. When we are nearing the bottom of a resource market, whether it's potash, coal, uranium or oil, I buy the best company in the space first. The Exxon-Mobils of the space are the ones that are going to come back first. In the uranium space, I bought Cameco Corp. (NYSE:CCJ) for my S&A Resource Report newsletter portfolio. It is the company to buy if you're going to speculate on a bottom in uranium.
TMR: Thank you for your time, Matt.
MB: Thank you.
This interview was conducted by JT Long of The Mining Report and can be read in its entirety here.
Matt Badiali is the editor of the S&A Resource Reporta monthly investment advisory that focuses on natural resources, including silver, uranium, copper, natural gas, oil, water and gold. He is a regular contributor to Growth Stock Wire, a free premarket briefing on the day's most profitable trading opportunities. Badiali has experience as a hydrologist, geologist and consultant to the oil industry. He holds a master's degree in geology from Florida Atlantic University. Click here for subscription information.
Want to read more Mining Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit The Mining Report home page.

1) JT Long conducted this interview for Streetwise Reports LLC, publisher ofThe Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) Matt Badiali: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. Stansberry & Associates has a financial relationship with all companies discussed in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over what companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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Barroso hopes gas deal to help to improve Russian-Ukrainian relations

Octobre 31:

Photo: Barroso hopes gas deal to help to improve Russian-Ukrainian relations / Other News
The European Commission chief Jose Manuel Barroso, following trilateral gas talks in Brussels, said he hopes that the gas agreement will help to improve the Russian-Ukrainian relations, RIA Novosti reported.
"I have hopes that this agreement will have the opportunity to improve relations between Ukraine and Russia," Barroso said after the trilateral talks.
Barroso also stated that all sides agreed to follow the terms of the contract, as no one will benefit from the new disruptions of gas deliveries.
Russia and Ukraine on Thursday held the final round of gas talks, mediated by the European Commission, to find an interim solution to the standoff over Ukraine's unpaid gas bills and the price Kiev will pay for Russian gas supplies during the upcoming winter.
Following the talks, Russia, Ukraine and the European Union signed a so-called "winter package" agreement on gas deliveries, while Gazprom and Naftogaz signed an addendum to the contract, securing conditions for gas deliveries up until March 2015.

Petrol price to rise on November 10

General News Fuels Fuel hike: Finance minister Mathias Cormann announced the fuel excise would increase and said that if the measure is not validated within 12 months the revenue raised would go to the oil companies, not the motorists.
Fuel hike: Finance minister Mathias Cormann announced the fuel excise would increase and said that if the measure is not validated within 12 months the revenue raised would go to the oil companies, not the motorists.

The government has threatened motorists with no refund if fuel tax not approved

THE federal government has used special powers to raise the tax on fuel without parliamentary approval and has threatened to pass the revenue raised onto oil companies and not return it to motorists if it’s blocked in parliament.

Announced by finance minister Mathias Cormann, the fuel excise will increase from 38.14 cents to 38.6 cents on November 10. According to Mr Cormann the impact on households would be modest, translating to an extra 40c to fill a 50-litre tank.

The measure would see the reintroduction of the twice-yearly indexation of fuel prices put on hold by the Howard government and outlined in the May budget. The second increase will take place on February 1, 2015. Over four years the net revenue would be $2.2 billion.

By using a tariff proposal the fuel tax can be increased, but if legislation is not validated within 12 months the revenue must be refunded. Labor and the Greens are expected to block the measure.

Mr Cormann said he was confident it would be validated but said that if it is not the refund would be given to oil companies and not consumers.

“The question for Bill Shorten and Christine Milne is whether in 12 months’ time they want the additional revenue collected through this measure to be refunded to the fuel manufacturers and fuel importers or whether they want to see this additional revenue invested in job creating and productivity enhancing road infrastructure which will help us build a stronger more prosperous economy,” he said.

Opposition leader Bill Shorten described the move as an ambush on Australian motorists.

“These are increased petrol taxes that Tony Abbott said would never happen under a government he led,” he said.

“Tony Abbott said yesterday he wants a mature debate, and yet today, he ambushes Australian motorists; he ambushes the parliament of Australia, and through the backdoor he's launched a sneak attack on the wallets and cost of living of every Australian.”

The Australian Automobile Association (AAA) which represents the nation’s car clubs including the NRMA and RACV called the increase in fuel tax “completely unjustified”.

Echoing Mr Shorten’s views, AAA chief executive Andrew McKellar said the move was unfair.

“This is a sneaky and tricky move to introduce an unfair and unjustified tax on ordinary motorists via the backdoor,” he said.

“This government has shown contempt for the motoring public and also for the parliamentary process in this country. “We need a guarantee that if this measure is not passed by the Senate that all unjustified taxes collected during this period will be refunded to the consumers who paid it.”

Victorian Automobile Chamber of Commerce executive director David Purchase said he is appalled by the government’s threat not to reimburse consumers.

“The federal government wants to take more money off motorists and consumers, who already pay quite enough tax on fuel, and is threatening to give it to fuel companies if it doesn’t get its way,” he said. “This is not the way politics should be done in Australia. “Motorists are not cash cows to be exploited and the federal government has to stop milking them dry. Road users cannot be expected to keep giving as they already pay road tolls, insurance premiums, vehicle registration, licence fees and high fuel prices. Enough is enough. “The decision to increase fuel excise shows the Federal Government is penalising motorists for using vehicles and views road users as an easy revenue source.”

The fuel excise was due to take effect on August 1 this year and the government has lost about $35 million due to the three-month delay.


Is the US oil boom in trouble?

October 30:

By , Staff writer 

  • View Caption
A dramatic rise in US oil and natural gas production has altered the global energy landscape, buoyed an economic recovery, and pushed down oil prices worldwide.
The question is: How long can the so-called shale boom last?
No one can be 100 percent sure, but most projections see the US remaining an energy powerhouse for decades to come. New techniques and technologies will continue to unlock oil and gas from increasingly stubborn rocks, according to various government, industry, and independent analyses.
Recommended: Oil prices: 5 reasons they keep falling
But some critics say these forecasts are overly optimistic and fail to take into account just how much energy, money, and ingenuity it takes to maintain unconventional oil and gas production, let alone expand it. And a recent drop in the price of oil calls into question not just how much oil and gas is left, but how much of it can still be profitably extracted.
Today, US oil production is at its highest level in three decades, and the country imports dramatically less. Natural gas production is so high that terminals are being built to ship it abroad, and booming oil production has spurred talk of lifting the decades-long crude export ban. Innovations like hydraulic fracturing and horizontal drilling have unleashed a glut of oil and gas in shale formations from North Dakota’s Bakken to Texas’s Eagle Ford.
Recent developments threaten to undermine that momentum, however. New supply 
and weak demand is pushing down oil prices globally, threatening to make costly US shale extraction uneconomic. Limited pipeline capacity and overproduction of natural gas in the Marcellus shale has pushed prices down, making it hard for producers to turn a profit. Drillers are taking on ever increasing amounts of debt to finance their operations. And there may not be as much shale oil and gas as the US government forecasts, according to a new report from the Post Carbon Institute, a California-based think tank that promotes sustainable energy.
“Shale will be robust for the next four or five years, but because of declines at the well-level and field-level, it’s not sustainable in the medium and longer term,” says study author David Hughes in a telephone interview Tuesday. “Policymakers should be aware of that before they try to cash in on a bounty that may not exist ten or fifteen years down the road.”
The study suggests US oil and gas production potential is exaggerated in US Energy Information Agency data – official government statistics and projections that widely inform policy and investment decisions. The Post Carbon Institute estimates that oil production from the country's top two shale formations will under-perform EIA projections by 28 percent between 2013 to 2040. Shale gas production from the country's top seven plays will under-perform EIA forecasts by 39 percent over roughly the same time frame, according to the study. The EIA did not respond to requests for comment on the study.
“We’re approving [liquefied natural gas] exports, there’s talk of lifting the oil export ban,” says Asher Miller, executive director of the Post Carbon Institute. “All of that is based on this assumption that we have that this shale revolution is going to be around for a while.”
It’s not just EIA projections that could be exaggerated. There can also be a discrepancy between the amount of oil that companies tell the investors they’re sitting on and the amount of oil they tell the federal government they have in proved reserves. The gulf between the two numbers is often large; the amount touted to investors can be anywhere from 5.5 times to 27 times higher than the proved reserves, according to a Bloomberg analysis.
“They’re running a great risk of litigation when they don’t end up producing anything like that,” Jon Lee, a University of Houston petroleum engineering professor, told Bloomberg. “If I were an ambulance-chasing lawyer, I’d get into this.”
The precipitous drop in oil prices has already affected drillers and hurt their bottom line, driving down the number of rigs actively drilling for oil.

“Unless there’s a significant reversal in oil prices, we’re going to see continued declines in the rig count, especially those drilling for oil,” James Williams, president of WTRG Economics, told Fuel Fix last week.

Profits Up 31% At Royal Dutch Shell Plc Despite Lower Oil Prices

October 30:

royal dutch shellRising production and lower exploration costs enabled Royal Dutch Shell (LSE: RDSB) (NYSE: RDS-B.US) to log a solid rise in profits during the third quarter, despite the lower price of oil.
The Anglo-Dutch giant said that core profits, excluding exceptional items, rose by 31% to $5.8bn during the third quarter, up from $4.5bn during the same period last year.
Shareholders were rewarded with a 4% dividend hike, taking the third-quarter payout to $0.47, or 29.4p at today’s exchange rate, and Shell also reported that it had bought back 18.5m, or 0.3%, of its own shares for cancellation during the quarter, at a cost of $0.8bn.

How did they do that?

Today’s results appear to be proof that Ben van Beurden, Shell’s chief executive, is delivering on his promise to improve the balance between growth and shareholder returns.
Shell spent $8.4bn on capital investment during the third quarter, down from $9.4bn during the same period last year. Expenditure during the quarter was also offset by income of $3.6bn from divestments, reducing net capital expenditure to just $4.8bn.
Shell’s profit growth wasn’t solely down to cutting expenditure or asset sales: excluding exceptional items, profits from Shell’s upstream (oil and gas production) division rose from $3,466m last year to $4,343m this year, while downstream (refinery and fuel sales) profits rose from $892m to $1,793m for the third quarter.
These figures were backed by improved third-quarter cash flow: underlying operating cash flow was $11.1bn, up from $9.9bn for the same period last year.

Production changes

Shell’s total oil and gas production fell by 5% to 2,790,000 barrels of oil equivalent per day (boepd) during the third quarter, but when the impact of divestments and other exceptional events was stripped out, the firm said production from continuing operations was up 2%.
This was partly due to major new oil fields in Nigeria, the US and Malaysia being brought into production during the period. Shell’s share of production from these assets is expected to peak at around 116,000 boepd.

Is Shell still a buy?

Shell’s share price performed very strongly during the first half of this year, but has fallen back with the price of oil and is now unchanged on the start of the year.
For me, today’s results confirm that Mr van Beurden is delivering on the promises he made when he took charge in January. Trading on a forecast P/E of 9.7 and a prospective yield of 5.2%, I believe Shell is a solid buy.
However, despite Shell's attractions, it was not one of the five blue-chip stocks recently selected by the Motley Fool's market-beating stock pickers for their exclusive wealth report, "5 Shares To Retire On".

Technip secures subsea contract for Bangka Development, offshore Indonesia

October 30:

Technip has secured a subsea contract from Chevron Indonesia for the Bangka Development, located in the Rapak PSC area, about 70km offshore the province of East Kalimantan, Indonesia.
The contract, which is ranging from €100m to €250m, requires Technip to provide engineering, procurement, construction, installation, commissioning and pre-commissioning of flexibles, umbilical and subsea structures.
Technip's operating centres in Jakarta, Indonesia, and Kuala Lumpur, Malaysia will implement the contract.
The centres will offer customer support from conception to execution.
Technip will fabricate the flexible pipes at its Asiaflex Products plant in Tanjung Langsat, Johor, Malaysia, while the umbilical will be manufactured at Technip Umbilicals' facility in Texas, US.
The company's Deep Orient multi-purpose installation and construction vessel will be used during the installation phase of the project.
Technip Asia Pacific president KK Lim said: "We are delighted to be awarded this new project. It demonstrates our differentiating advantage of having a unique vertically integrated value chain for subsea infrastructures to provide the most competitive solutions to our client."
Chevron completed front end engineering and design (FEED) for the deepwater Bangka project in December 2011and started the contracting approval process with the Indonesian Government.
The project scope includes a subsea tieback to a floating production unit (FPU).
Chevron's working interest in the Bangka project is 62%.

Image: Technip will fabricate the flexible pipes at its Asiaflex Products plant in Tanjung Langsat, Johor, Malaysia. Photo: courtesy of Technip.


Friday, October 3, 2014

Energy Australia diverts Burra, SA wind farm project to protect endangered pygmy bluetongue lizard

October 03:

A national energy company building a wind farm has planned the project so as not to disturb colonies of a tiny endangered lizard.         
The populations of pygmy bluetongue lizards have meant Energy Australia will divert roads and other infrastructure to their proposed project in South Australia near Burra.
The Melbourne-based company is waiting on a decision from the Environment, Resources and Development Court before it goes ahead with the multi-million-dollar wind farm.
The pygmy bluetongue lizard was thought to have been extinct until 1992 when one was found in the belly of a dead brown snake.
Since that time researchers at Flinders University, as well as farmers and the community around Burra, have worked to keep the lizard off the endangered list.
The reptile, which measures only 15cm at full length, spends most of its life down spider holes – having either killed or evicted the resident wolf or trap-door spiders.
Energy Australia project development manager Clint Purkiss said the protocols for planning developments always included a flora and fauna audit.
The presence of the threatened lizard does not impact on the location of the Stony Gap windmills but roads would have passed through the bluetongue's territory.
"We have certainly factored it into the design of some of the ancillary infrastructure," Mr Purkiss said.
"There are areas of existing track where there are small populations ... which we will fence off and utilise the track away from the populations.
"There are some areas of reticulation, the overhead and underground cabling that we will ... design in accordance with the Pygmy Bluetongue Lizard Recovery Team."
Mr Purkiss said it was not unusual to plan developments around important plants and animals.
"It's just part of the process," he said.

'One of the most studied lizards in Australia'

About 5,000 pygmy bluetongue lizards have been located in the region from Eudunda to Jamestown.
Chris Reed, a wool producer outside Burra, sold 80 hectares of his land in 2010 to conservation group Nature Foundation SA to promote the long-term survival of the lizard colonies in the region.
Researchers from Flinders University have found cropping and cultivating the land will destroy the lizard's burrows but some sheep grazing can enhance the reptile's welfare, because they are able to find spider burrows to shelter in and can also more easily sight their prey.
"So what we are really trying to do is figure out exactly what is the right level of grazing, what is going to be the best for the lizards", said Professor Mike Bull at Flinders University's School of Biological Sciences.
Professor Bull has been studying the lizards for 20 years.
He said with 10 PhD projects and numerous other research projects it is "probably one of the most studied lizards in Australia".
Documentary-maker David Attenborough even included a segment on the lizard in his Life in Cold Blood series.
Every September, Nature Foundation SA holds its "Lizard Crawl" at Tiliqua, a reserve north-west of Burra, where the local community is encouraged to understand more about the lizard and look out for the holes they live in.
Professor Bull said it is important the community takes ownership of their unique little reptile.

"I'm not going to keep on going forever ... so we need to leave the community with a way of looking after the lizards – a way of monitoring how they are going," he said.

Texas monthly oil production rises

October 3:

SAN ANTONIO — Spurred by drilling across Texas and led by the Eagle Ford Shale and Permian Basin, crude oil production in Texas rose more than 23 percent in August compared to August 2013, the Texas Petro Index reports.
Oil production totaled an estimated 95.56 million barrels in August compared with 77.6 million barrels in August 2013, says economist Karr Ingham, who developed and maintains the Texas Petro Index.
In addition, the 307,700 employees who are estimated to work for drilling and oil-field service companies surpassed 300,000 for the second time since the index was launched in 1995.