The 3 Week Diet System

Tuesday, January 27, 2015

Enbridge says alternate route to proposed northern Minnesota pipeline would be more expensive

January 27:

ST. PAUL, Minn. – Enbridge Energy is defending its proposal to build a northern Minnesota crude oil pipeline.
Company executives testified Tuesday during the first day of a hearing before a regulatory judge in St. Paul. Critics of the $2.6 billion project have questioned whether the line needs a northern route.
But Enbridge project director Paul Eberth says the Sandpiper project would allow shippers to carry North Dakota crude oil to a terminal in Clearbrook, Minnesota, and then on to Enbridge’s storage terminal and other pipelines in Superior, Wisconsin.
Eberth says rerouting the pipeline without reaching those destinations would not serve shippers’ needs.
The Star Tribune (http://strib.mn/1wzOVCJ ) reports the hearing is focused on whether the project is needed and, if so, whether the company’s preferred route or an alternate one would meet the need.

Source:  www.canadianbusiness.com/business-news/enbridge-says-alternate-route-to-proposed-northern-minnesota-pipeline-would-be-more-expensive/?

Obama and Saudi king discuss Iran‚ energy in symbolic visit

January 27:


U.S. President Barack Obama meets with Saudi Arabia's King Salman (R) at Erga Palace in Riyadh, January 27, 2015.
Story Picture
RIYADH: U.S. President Barack Obama met with Saudi Arabia's King Salman on Tuesday to pay respects to the late King Abdullah and bolster a relationship that now stretches well beyond oil interests to security cooperation across the volatile Gulf Arab region.
King Salman, in his first official talks with a high-level foreign delegation since the death of his half-brother on Friday, did not express reservations over U.S.-led negotiations aimed at curbing Iran's nuclear program, a U.S. official said.
It was unclear whether King Salman's comments on the nuclear talks offered a hint of change. Saudi Arabia, the Middle East’s top Sunni power, has been anxious over the possibility that the talks would lead to a rapprochement between the United States and the kingdom's main rival, Shi'ite-led Iran.
The king said Tehran should not be allowed to build a nuclear weapon, the U.S. official told reporters on Air Force One following a meeting between the leaders and dinner at Erga Palace in central Riyadh. A nuclear deal with Iran would be a major legacy achievement for Obama.
Obama cut short a trip to India to fly to Riyadh, cancelling plans to visit the Taj Mahal.
He was joined on the four-hour visit by Secretary of State John Kerry and a bipartisan group of prominent current and former officials who presence helped to convey the importance of a relationship that has endured on-off strains in recent years.
The new king also signalled continuity in energy policies by the world's top oil exporter, the U.S. official said. The two discussed the stability of the oil market but not current low oil prices, the official added.
"He simply suggested they would continue to play their role within the global energy market as they have done and that we should not expect any difference in the Saudi position,” the U.S. official said, referring to the king.
"The message was one of continuity and commitment to caring for their traditional roles."
Late last year, Saudi Arabia shocked oil markets by deciding not to cut production to shore up tumbling crude, opting to defend its market share against rising North American production rather than attempt to hold prices at around $100 a barrel
WORSENING STRIFE
Obama's visit came as Washington struggles with worsening strife in the Middle East, where it counts Saudi Arabia among its few steady partners in a campaign against Islamic State militants who have seized swathes of Iraq and Syria.
The U.S. security headache worsened last week after Yemen's government resigned under pressure by Iran-backed rebels, a setback to U.S. efforts to contain al Qaeda in that country and to limit the regional influence of Shi'ite Muslim Iran.
The Yemen government's collapse is of deep concern to Saudi Arabia because of their common border and because of the advance of Iran. The leaders discussed Yemen, the U.S. official said.
Saudi's role in rallying Arab countries to join a coalition against the Islamic State, also known as ISIS, has won praise in Washington, which along with other Western nations values the kingdom as an important market for its defense industries.
U.S. criticism of Saudi Arabia over its human rights record has normally been low-key and appears to have remained so during the visit. The official said the president raised the issue broadly but did not discuss specific cases.
Saudi authorities have been criticized by international rights groups for jailing several prominent activists and for the public flogging this month of a blogger.
Despite an alliance between the two countries that has long been a cornerstone of U.S. Middle East policy, the kingdom has made clear its impatience with the Obama administration’s failure to do more to oust Syrian leader Bashar al-Assad and its anxiety over U.S.–led nuclear negotiations with Iran.
This added to a sense among Saudi rulers that Obama was neglecting old Arab allies. U.S.-Saudi relations have improved in recent months after Obama made a fence-mending visit to Riyadh last March.
Even though the United States is now less dependent on Saudi oil supplies thanks to a domestic production boom, the kingdom’s willingness to keep output high despite tumbling global oil prices has bolstered Obama’s domestic economic recovery efforts as well as his strategy of keeping pressure on oil producers Russia and Iran. Both those nations are under international sanctions.

Source:  m.thehimalayantimes.com/fullNews.php?headline=Obama+and+Saudi+king+discuss+Iran%26sbquo%3B+energy+in+symbolic+visit&NewsID=442615

Hawaii's grid moves closer to a solar future

January 27:
In December, NextEra Energy announced an agreement to acquire Hawaiian Electric Industries, owner of three electric utilities that together supply power to 95% of Hawaii's population. NextEra is one of the largest developers of renewable energy in the United States through its subsidiary NextEra Energy Resources and is also the owner of Florida Power & Light (FPL). While FPL does not rely heavily on solar photovoltaics and other forms of renewable energy to serve its Florida customers, solar PV already plays a large role in Hawaii, and that role is expected to grow significantly over time. The Hawaiian Electric utilities' solar PV programs continue to evolve as the utilities handle ever-larger amounts of customer-sited solar capacity on their small and isolated island grids.
graph of residential and commercial net-metered solar PV capacity in Hawaii; average residential solar system size, as explained in the article text
Source: US Energy Information Administration, EIA-861 and EIA-826 (Note: Average residential solar photovoltaic system size calculated by dividing total installed capacity by number of meters. HECOMECO, and HELCO are subsidiaries of Hawaiian Electric Industries; KIUC is an independent electric cooperative.)
The Hawaiian Electric utilities – Hawaiian Electric Company (HECO) serving Oahu, Hawaiian Electric Light Company (HELCO) serving Hawaii Island, and Maui Electric Company (MECO) serving Maui, Molokai, and Lanai – manage an unusual set of physical assets and operational concerns compared to utilities in the contiguous United States. Unlike other states, Hawaii imports almost all of its energy fuels, and a disproportionate share of Hawaii's electricity comes from oil-fired generators, which is a large part of why Hawaii's electricity prices are the highest in the United States.
The high electricity prices in Hawaii have made wind and solar technologies economically attractive alternatives, especially as their technology costs have come down in recent years. These factors have led to growing wind and solar generation on both the utility scale and in smaller distributed applications – particularly customer-sited rooftop solar PV.
According to EIA's monthly net metering utility data, 9200 net-metered PV systems were added in 2014 through October, bringing the total number of customers with net-metered PV to around 48,000. In Oahu, where most of the state's population resides, roughly 12% of customers have rooftop solar, compared to an estimated US average of 0.5%, according to the Solar Electric Power Association. The average capacity of residential net-metered PV systems in Hawaii has also been increasing as larger and more efficient PV systems are installed.
renewable watch - Oahu, as explained in the article text
Source: Hawaiian Electric, Oahu Renewable Watch
Residential solar PV additions have been slowed by the delays customers experienced in getting approval to interconnect new PV systems to the grid. The delays stem from circuits on the Hawaiian Electric distribution grids reaching levels of rooftop PV capacity that are 120% or more of the circuit's daytime minimum load (see maps below) – a key threshold for Hawaiian Electric's interconnection approval process. Once that threshold is passed, an interconnection study may be required before the new PV system can be approved, which has resulted in a backlog of PV applications.
Graph of forward curve for the Algonquin Citygate basis futures contract, as described in the article text
(Data as of January 26, 2015.)
Graph of Algonquin basis futures for Jan 2015 contract, as described in the article text
(Data as of December 23, 2014.)
Graph of forward curve for the Algonquin Citygate basis futures contract, as described in the article text
(Data as of December 16, 2014.)
However, Hawaiian Electric recently entered a cooperative research partnership with the National Renewable Energy Laboratory, the Electric Power Research Institute, and SolarCity, one of the largest third-party solar leasing companies in the United States, to study the operational effects of high levels of solar PV on electric grids. Preliminary research results have lead Hawaiian Electric to announce plans to clear its backlog of PV applications by April 2015.
Additionally, as a result of the research, Hawaiian Electric has proposed in a filing made last week to the Hawaii Public Utilities Commission (PUC) to raise the allowable PV penetration threshold from 120% to 250% of a circuit's daytime minimum load. But this change would also be accompanied by a decrease in the amount received by new net-metered PV customers for the excess electricity they send back to the grid. Instead of receiving the full retail rate (about $.30/kilowatt-hour for Oahu residential customers in January 2015), customers would receive something closer to Hawaiian Electric's cost of avoided generation, which largely reflects the cost of purchased fuel. Hawaiian Electric states that the new rate would distribute grid operation costs equitably across solar and nonsolar customers and allow the distributed solar program to be sustainable. Many utilities around the country are similarly engaged in efforts to establish appropriate compensation rates for distributed solar customers while ensuring equitable costs to all customers.
In compliance with orders from the PUC, Hawaiian Electric's proposed plans for the state's long-term energy future also include tripling the amount of distributed solar on its system, procuring energy storage projects (such as batteries) to help balance wind and solar supplies, and converting existing oil-fired power plants to use liquefied natural gas (LNG) that is regasified.


Source:  www.businessspectator.com.au/article/2015/1/28/solar-energy/hawaiis-grid-moves-closer-solar-future?

EDF blasted for underwhelming planned reduction to gas prices

January 27:

CONSUMER groups have hit out at EDF Energy’s proposed 1.3 per cent reduction in gas prices for being too little, too late.
The company announced yesterday that it was cutting its prices, becoming the last of the Big Six energy firms to do so. The drop in EDF’s standard variable gas price will come into effect from 11 February.
In a statement yesterday, the firm said the reduction was linked to the recent falls in wholesale gas costs, but added: “However, the vast majority of gas that EDF Energy bought for its customers was purchased well in advance and at previously higher prices. This, and the low standard prices already offered by EDF Energy, has limited the size of today’s reduction.”
Of the Big Six, EDF’s price cut is the smallest, while Npower made the biggest cut, wiping 5.1 per cent off its customers’ bills. Stephen Murray, energy expert at MoneySuperMarket said EDF’s reduction was “truly the most underwhelming of the lot” and added that it was “an absolutely paltry price cut in comparison to the 20 per cent fall in wholesale prices that we have seen”. He continued: “On top of that, we see that bill payers will again not feel the full benefit of lower bills immediately.”
USwitch’s Ann Robinson said: “It’s now official that standard tariff customers simply aren’t getting a fair deal. These meagre reductions are too little, too late and must be increased.”
Source:  www.cityam.com/208117/edf-blasted-underwhelming-planned-reduction-gas-prices?

Aramco to renegotiate deals over oil price

January 27:

RIYADH: Saudi Aramco will renegotiate some contracts and postpone some projects due to falling oil prices, the head of Saudi Arabia's state oil company said yesterday, stressing the top crude exporter will not single handedly balance the global oil market.
Saudi Arabia in November refused to cut its output to arrest the price slide and decided to focus on market share.
Saudi Aramco chief executive Khalid Al Falih, speaking at a conference in Riyadh, did not specify which projects or contracts would be affected by the low oil prices.
'We will have to adjust to the realities of today. We will push some projects into the future, we will stretch some of them, we will renegotiate some contracts,' Falih said.
'I think we got spoiled with $100 oil and we were focused on building capacity and we lost focus on fiscal discipline.'
Reuters reported last week that Aramco had asked oilfield service companies for discounts in the wake of the oil price slide.
Falih said the imbalance in the oil market had nothing to do with Saudi Arabia, and a fair price is what would ultimately balance supply and demand.
Asked what a fair price for oil is, he said: 'It will be the price that ultimately balances supply and demand. I don't think anybody, no single person, can dictate what that price is. I would be foolish if I did that.'

Source:  www.gulf-daily-news.com/NewsDetails.aspx?storyid=394838

Monday, January 26, 2015

OPEC says prices oil may have hit bottom

January 27:

OPEC has warned that under-investment may bring a crunch in future oil supplies.
OPEC has warned that under-investment may bring a crunch in future oil supplies. Photo: Bloomberg
Brent crude oil prices held above $US48 on Tuesday following comments from OPEC that prices may have found a floor.
OPEC Secretary-General Abdullah al-Badri said oil prices may have bottomed out and he warned of a risk of a future jump to $US200 a barrel if investment in new supplies was too low.
"Crude oil markets continue to consolidate near term," ANZ analysts said, adding that Brent traded in the range of $US48-$US50 last week and showed little direction.
"OPEC's Secretary General commented yesterday that prices may have bottomed, but there was no imminent prospect of OPEC producers sitting down to discuss cutbacks until mid-year," ANZ said.
March Brent crude rose US17¢ to $US48.33 a barrel, after settling down 1.3 per cent on Monday.
West Texas Intermediate (WTI) crude for March delivery was up US11¢ at $US45.26 a barrel after slipping to a session low of $US44.35 on Monday, close to a near six-year low.
Traders said that trading volumes later on Tuesday may be limited as a snow storm is expected to disrupt transport in New York.


Oil prices have lost nearly 60 per cent in value since last peaking in June 2014, in a rout fuelled by ample global supplies from the US shale oil boom and a decision by OPEC to keep its production quotas unchanged.
Standard Chartered said that OPEC's decision to keep production high was beginning to impact other producers.
"Non-OPEC output is being hit hard, and we now expect the oil market to tip into supply deficit in H2," the bank said.
Traders said there were other signs of a potential market pick-up.
"I'm not sure if prices have bottomed out, but I can see some signs for prices to rebound," said Yusuke Seta, a commodity sales manager at Newedge Japan, referring to a rise in Brent's open interests in the past few weeks.
Brent's open interest on the Intercontinental Exchange (ICE) hit 1.64 million lots in the week of January 20, a record high since the data started in 2011.
Open interest is the number of contracts outstanding on a futures trading platform such as ICE.
WTI may come under further pressure this week as commercial crude stockpiles likely rose by nearly 4 million barrels last week, a Reuters survey showed on Monday, after posting its largest build in 14 years in the previous week.
The data stretched Brent's premium to WTI to over $US3 a barrel last week shortly after trading close to parity. 

Source: www.smh.com.au/business/markets/opec-says-prices-oil-may-have-hit-bottom-20150127-12z89v.html?

Obama to Lead Bipartisan Delegation to Mourn Death of Saudi King

January 26:

President Barack Obama will lead a bipartisan delegation to Saudi Arabia on Tuesday to mourn the death of King Abdullah, who helped anchor the alliance between Washington and the world’s largest oil exporter.
The U.S. leader will offer condolences to the House of Saud, accompanied by a 29-member group that includes Secretary of StateJohn Kerry, House Minority Leader Nancy Pelosi and CIA DirectorJohn Brennan, according to a statement from the White House. Republican Senator John McCain of Arizona and former Secretary of State Condoleezza Rice will also attend.
Global leaders have poured in to pay their respects as the new Saudi monarch and half-brother of the late king, Salman Bin Abdulaziz Al Saud, takes the helm of the biggest Arab economy amid political turmoil in the Middle East and tumbling oil prices. Obama cut short his three-day trip to India by several hours to make the stop in Saudi Arabia.
King Abdullah bin Abdulaziz Al Saud died on Jan. 23. As Saudi Arabia’s sixth king since 2005 and its de facto ruler for almost a decade before that, his nation supported the U.S. in combating terrorism, keeping the flow of oil through the region secure, and dealing with Iran. Beyond its role as an ally in key Middle East conflicts, Saudi Arabia has also been a major arms buyer from U.S. and European companies.
Obama’s decision to hold back from military action against the Syrian government in 2013 and his engagement in talks with Iran strained the decades-old alliance. Despite that, Saudi Arabia joined the U.S. coalition against Islamic State as it faces a growing threat from militant attacks within the kingdom. The U.S. has underwritten the security of Saudi Arabia in an alliance that dates to the 1940s.

Source:www.bloomberg.com/news/2015-01-27/obama-to-lead-bipartisan-delegation-to-mourn-death-of-saudi-king.html?

Brazil: Drought forces return to gas power

January 26:

View of the Cantareira reservoir, a water supply system of São Paulo, during a drought View of the Cantareira reservoir, a water supply system of São Paulo, during a drought


The worst water crisis in 80 years is affecting Brazil's most populous states, reducing electricity generation at hydroelectric dams and forcing operators to fire up gas power plants to reduce the risk of blackouts.


Source:  gastopowerjournal.com/markets/item/4507-brazil-drought-causes-return-to-gas-power?

Kuwait Pares Spending for Next Fiscal Year on Drop in Oil Prices

January 26:


Kuwait has cut spending in its 2015/16 budget by almost a fifth to account for the plunge in oil prices. The country’s development program won’t be affected, Finance Minister Anas Al-Saleh told reporters Monday in Kuwait City.
The budget deficit for the fiscal year starting April 1 will be 7.02 billion dinars ($23.8 billion), on projected outlays of 19.1 billion dinars, Al-Saleh said. A reduction in subsidies will help to bring spending down from the 23.2 billion dinars forecast for the current fiscal year, figures that were distributed showed.
Actual spending over the last three fiscal years has been about 19 billion dinars, Al-Saleh said.
Revenue is forecast at 12.052 billion dinars, with projected oil income of 10.6 billion dinars, accounting for 88 percent of total revenue, Al-Saleh said.
The new budget is based on an oil price of $45 a barrel at production of 2.7 million barrels a day. The break-even price required to balance the budget is $77, Al-Saleh said. Brent crude is selling around $48.50.
As oil prices fall, governments across the Gulf are cutting back on spending, including on subsidies. While oil revenue is down, “the draft budget was prepared in a way that serves the development plan,” Al-Saleh said.
That program, which involves large projects including a new oil refinery, requires investment of 6.61 billion dinars in the next fiscal year, according to Al-Saleh. By law, 10 percent of revenue is allocated to the Future Generations Fund. Non-oil revenue is projected at 1.45 billion dinars, Al-Saleh said.
Kuwait had a budget surplus every year for the 15 years through 2013/14, and another is projected for the fiscal year ending March 31.


Source:  www.bloomberg.com/news/2015-01-26/kuwait-pares-spending-for-next-fiscal-year-on-drop-in-oil-prices.html?

Friday, January 23, 2015

FG kicks off sale of kerosene at N50 per litre

January 23:

The Federal Government, Friday, flagged off the sale of kerosene at the pump price of N50 per litre under the Kero-Direct–Scheme, a programme designed by Nigerian National Petroleum Corporation, NNPC, to make the commodity available for every household in the country.
The struggle to buy Kerosene, an household commodity for cooking, becomes more challenging even at a NNPC petrol Station in Lagos. Photo by Lamidi Bamidele
The Group Managing Director of NNPC, Dr. Joseph Dawha, while speaking at the programme, admitted that driving the kero-direct programme would be quite challenging but assured that with unwavering support of government, the objectives will be achieved.
According to him, “We are committed to ensuring the elimination of the kerosene “Black Market” so that Nigerian consumers can buy kerosene at the correct price of N50 per litre. We know this will be challenging, but with the unwavering support and assurances of Government through the able leadership of Minister of Petroleum Resources, Mrs. Diezani Alison Madueke, we are confident that the objectives of this laudable scheme will be achieved”
“As you know, household kerosene is a very important commodity in every household in the country. As a major domestic cooking fuel, kerosene has now become indispensable to virtually every Nigerian family. However, despite the importance of this commodity to Nigerians, accessing kerosene at the correct price has been a challenge over the years”.
Dawha added that “the scheme is response to the clarion yearnings of deserving Nigerian consumers of kerosene, particularly our mothers, sisters, fathers and brothers who constitute the good people of Nigeria and in line with transformation agenda of President Goodluck Jonathan; we are launching the federal government’s kero-direct scheme”
The GMD stated that NNPC has engaged in strategic partnership with critical stakeholders including credible non-governmental organisations to embark on an aggressive sensitization and monitoring of the programmes to ensure to seamless and transparent distribution and sales of kerosene at the correct price at all its stations.
In her welcome address earlier, the Group Executive Director, Commercial and Investments of NNPC, Hajia Aisha Abdulrahman, has assured that effective measures are already in place to ensure that the product get to the target consumers.
Abdulrahman reiterated NNPC’s ‘continued commitment in making the kero-direct scheme a resounding success not only to reduce the hardship faced by Nigerians, but also to once again touch lives positively’.


Source:   www.vanguardngr.com/2015/01/fg-kicks-off-sale-kerosene-n50-per-litre/?

Saudi king, Salman, to keep oil output high

January 23:

King Salman
King Salman
Saudi Arabia’s new king is expected to continue a policy of keeping oil output steady to drive out rival producers, though the royal succession has focused market attention on the future of the kingdom’s long-serving oil minister.
King Abdullah died early yesterday and his brother Salman became king.
Salman named his half-brother Muqrin as heir, rapidly moving to forestall any succession crisis at a moment when Saudi Arabia faces unprecedented turmoil on its borders.
While the new king is not seen as likely to change Abdullah’s policies of keeping output high to protect the Opec cartel’s market share, some analysts said the succession has focused attention on the future of the oil minister Ali Al-Naimi.
“King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting,” said John Kilduff, partner, Again Capital LLC in New York, adding that he expected Salman to keep production high.
FGE analyst Tushar Bansal said: “By and large, as of now, no major change is expected in Saudi policies” but he said the market would focus on whether the oil minister might step down.
“Ali Al-Naimi has been the oil minister since 1995... It was reported that he expressed a desire to step down, but King Abdullah asked him to stay on for as long as he is around. So, the real question is, if there is a new oil minister soon, will it lead to a change in Saudi energy policy?”
IHS oil consultant Victor Shum said speculation over the fate of the oil minister could add to market uncertainty though he did not expect a change of minister or in overall policy.
“The decision on Saudi Arabia to keep pumping (oil) was made regardless of who the king may be,” said Shum.
Saudi leaders were also unlikely to want to repeat previous policy misfires.
In the 1980s, Saudi Arabia cut its own output to prop up prices in the face of falling demand and rising supplies from non-Opec suppliers but was dealt a double blow from lower prices and reduced output.
Saudi policymakers would be determined not to make the same mistake again, analysts said.
Crude oil futures jumped on Friday after news of the Saudi king’s death but later came off their highs and were still trading at levels more than 50% below their most recent peaks in June, 2014.
“This little spike in prices is understandable... It should be sold off quickly and it won’t last long at all,” said Mark Keenan, an analyst at Societe Generale.
Previous succession
A continuation of existing policies would be in line with what happened after the last succession. In 2005, when King Fahd died, similar concerns over Saudi Arabia’s leadership emerged.
Following the announcement of King Fahd’s death on Aug. 1 2005, Brent rose to a then all-time high of almost $61 a barrel.
Crown Prince Abdullah, who had effectively been in charge since Fahd suffered a stroke in 1995, was installed as new king and officials assured that there would be no changes in an oil policy of keeping markets well-supplied.
Huge market shifts
Abdullah’s death comes amid some of the biggest shifts in oil markets in decades. Oil prices have halved on the back of soaring supplies coupled with cooling demand, meaning producers are earning sharply lower revenues.
Saudi Arabia faces its first budget deficit since 2009 and it has to deal with other Opec members who disagree with the strategy to let prices tumble.
Booming US shale production has turned the United States from the world’s biggest oil importer into a top three producer.
Led by Saudi Arabia, Opec announced last November it was keeping output steady at 30 million barrels per day, pulling down Brent by another quarter over the next month.
Opec’s decision not to act was aimed at defending market share against US shale as well as other non-Opec exporters such as Brazil or Russia.
King Abdullah continued Saudi’s policy of strengthening US relations, including support for two US-led invasions of Iraq, and US President Barack Obama was one of the first leaders to express his condolences, saluting Abdullah’s commitment to close ties.

Source:  www.irishexaminer.com/business/saudi-king-salman-to-keep-oil-output-high-308781.html?

U.S. Steelworkers to Reject Oil Companies’ First Offer

January 23:

Photographer: Brittany Sowacke/Bloomberg
A worker prepares to lift drills by pulley to the main floor of a drilling rig in the... Read More
United Steelworkers leaders, representing employees at about two-thirds of U.S. refineries, instructed members to reject the first three-year contract proposed by companies on Friday, describing the offer as “offensive.”
Gary Beevers, the USW international vice president who manages the union’s oil sector, told all local units to turn down the proposal made collectively by companies including Chevron Corp. (CVX)Exxon Mobil Corp. (XOM), Marathon Petroleum Corp., Royal Dutch Shell Plc (RDSA) and Tesoro Corp. (TSO), a telephone message distributed to members on Friday shows. Negotiations between the USW and refiners began this week. The current contract expires Feb. 1.
Oil workers are asking for bigger pay raises and better benefits as U.S. oil refiners cash in on the cheapest oil in almost six years. Themarket value of U.S. refiners has jumped as plants take advantage of a domestic shale boom that has propelled the nation’s oil production to the highest level in at least three decades. A nationwide strike threatens to halt 63 percent of U.S. fuel production.
“Workers are putting their lives on the line every day, and they want their share of the profits,” Lynne Hancock, a United Steelworkers spokeswoman based in Nashville, Tennessee, said by telephone on Friday.
Kimberly Windon, a spokeswoman for The Hague-based Shell, which is representing the oil industry in negotiations, didn’t immediately respond with a statement.
The USW is asking for a “substantial” increase in wages, stronger rules to prevent fatigue and measures to preserve the share of union workers rather than contract employees, Beevers said in an interview in Pittsburgh Oct. 31.

Refiners Gaining

An index of refiners in the Standard & Poor’s 500 has gained 157 percent since the beginning of 2012, when the steelworkers last negotiated an agreement with the companies. Refiners Marathon Petroleum Corp. (MPC) and Tesoro Corp. went on that year to take their place among the 10 best performers in the S&P 500 Index. (SPX)
Refiners have been cashing in on the biggest-ever domestic oil boom, driven largely by volumes being pulled out of shale formations using hydraulic fracturing and horizontal drilling. The surge in production has helped lower U.S. oil prices by 58 percent since June 20.
For the first time in at least 20 years, union members have established local funds that would help compensate workers during a potential strike, according to Beevers, who said he expected the biggest fight in his time as leader.
To contact the reporter on this story: Lynn Doan in San Francisco atldoan6@bloomberg.net
To contact the editors responsible for this story: David Marino atdmarino4@bloomberg.net Richard Stubbe
Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Source: www.bloomberg.com/news/2015-01-24/u-s-steelworkers-to-reject-oil-companies-first-offer.html?

Thursday, January 22, 2015

Canada's Ambassador Presses Barack Obama on Keystone Pipeline

January 22:

WASHINGTON:  Canada's envoy to Washington urged US President Barack Obama Thursday to approve the long-delayed Keystone XL oil pipeline, saying he wants to "correct the myths" about the controversial project.

Ambassador Gary Doer met in the US Capitol with two senators -- one Democrat, one Republican -- who support the pipeline that would transport Alberta oil sands crude to refineries along the US Gulf Coast.

Doer said environmental studies, along with Obama's own criteria for a pipeline, "would allow and require the president, notwithstanding symbolism, to go with science and facts."

"Our job is to correct the facts and correct the myths that are established," he said in support of the pipeline.


The project by builder TransCanada has been under review for more than six years. Republicans, now in full control of Congress, are eager to speed the process by passing legislation authorizing Keystone's construction.

The House of Representatives has already passed such a measure, and the Senate is currently debating it.

Obama has warned he would veto such a bill, and Republicans appear short of the necessary votes to override such presidential action.

The State Department concluded in its environmental impact statement last January that Keystone would likely not have significant effects on global greenhouse gas emissions.

"I heard him at the State of the Union talk about science," Doer said, referring to Obama's Tuesday speech.

"Hallelujah! Bring on the science, because the science is in the State Department report," he added.

Doer noted that transporting oil by pipeline is cheaper and safer than by rail or road. He also downplayed the prospect that the clash over Keystone might bruise ties between the US and Canada.

The State Department said it maintained a dialogue with Canadian officials regarding the pipeline. US agencies have until February 2 to weigh in on whether Keystone is in the national interest.


Source:  www.ndtv.com/article/world/canada-s-ambassador-presses-barack-obama-on-keystone-pipeline-652551?curl=1421980991

Top oil firms seek better services

January 22:

DAVOS: Global oil majors say they are demanding cheaper but better services from engineering and service companies, or simply taking work back in-house, after losing hundreds of billions on cost overruns in the last five years.
Cost overruns and delays were the main reason oil majors generated less cash than shareholders expected when oil was over $100 per barrel.
With oil now half that price, the urgency of addressing costs and delays rises by the day for the producers.
While keen to avoid accusations of ganging up to force terms on suppliers, they are exploring measures that are likely to put further pressure on services companies such as Schlumberger and Halliburton, which have already cut thousands of jobs as business shrinks.
"In the 80s and 90s, we were very close to the projects and controlled costs and execution. In 2000s, when we became rich, we became less cost-efficient," said Claudio Descalzi, chief executive of Italy's ENI, one of the oil majors that meet in Switzerland every year on the sidelines of the World Economic Forum in Davos.
The group includes the listed BP, Royal Dutch Shell, Total, Chevron and Statoil and state giants Sinopec from China, Pemex from Mexico and Saudi Aramco.
The boss of Aramco, Khalid Falih, said the group had held a closed-door meeting to discuss how to change the nature of relationships with oilfield services and engineering firms to deliver projects on time and on budget.
Industry research shows that over 100 large projects exceeded initial costs by a cumulative $400 billion in the past five years, according to participants.
"Last year, when oil was at $100-110 per barrel, many colleagues already spoke about cancelling projects as they were not able to justify them, even at that price," Falih said.
Participants in the meetings said a range of ways to collaborate had been suggested, including having a shared database that would list the best and worst service companies by region, and a 'rule book' for systems and components.
Falih said the industry could push for common standards for equipment such as pipes or valves.
Descalzi said the industry as a whole was actively moving to contracts where payments are based on timely execution.
He said lower oil prices offered a good opportunity for the industry to renegotiate some existing contracts or move work in-house.
ENI recently hired 2,000 people to bring work in-house, Descalzi said. "Ultimately, you save billions of dollars if the project is delivered on time and without cost overruns."


Source: www.gulf-daily-news.com/NewsDetails.aspx?storyid=394456

Low Oil Prices Could Bring Skilled Workers Back To B.C.: Christy Clark

January 22:

VICTORIA - Go West, oil worker. British Columbia Premier Christy Clark is telling employees who find themselves out of a job because of dropping oil prices that her province needs skilled workers.
Clark told delegates at the annual Truck Loggers Association convention on Thursday that governments and businesses worldwide are concerned about dropping oil prices.
But she added that those declines won't sink B.C.'s targets for building liquefied natural gas plants, and weak oil markets could bring skilled workers back to her province.
B.C. needs workers for forestry, mining, construction and its proposed LNG plants, she said.
"Many workers from the oil sands who came from British Columbia will now be looking for work, so my call to them is come home," said Clark. "Come home, come home to your province where you were born and you want to raise your children."
Layoffs are expected in Alberta as energy companies start feeling the pressure of reduced oil revenues. Oil prices have fallen 50 per cent since last summer amid a glut of supply and 40 per cent just since the end of November.
The premier said the B.C. government is considering placing billboard advertisements at the airport in Fort McMurray, Alta., calling former B.C. residents to return home for jobs.
"We are a poorer country when oil prices are low, but having said that there is an opportunity in it," said Clark.
"Many workers from the oil sands who come from B.C. will now be looking for work. We need them in forestry. We need them in mining. We need them in construction and soon we will need them in LNG."
Despite falling oil prices, Clark said her government remains confident B.C. will have at least three LNG export plants in operation within five years.
At least 18 LNG proposals are in the works in B.C., but no company has made a final investment decision to proceed with an LNG export plant. Clark's government says the LNG industry could create up to 100,000 jobs and could be a trillion-dollar economic opportunity with the potential to earn billions in revenues for the province.
The premier acknowledged energy companies are eyeing their bottom lines with concern as oil prices drop. But she said she remains convinced LNG will proceed in the province, and the government's target of three plants operating by 2020 will be met.
"When you look at declining oil prices, one of the things that we see is the script that we had for LNG is not going to proceed ... in the way that we'd expected it to," she said. "It could change every week. We are still on track to meet our goal of three LNG plants."
The Opposition New Democrats said in a statement that Clark's previous boasts about LNG goals and targets are proving to be more hot air than reality.
The New Democrats pointed to a February 2013 statement from Clark that said: "The money is going to start coming in 2017, and we're going to have three plants up and running by 2020, the first one by 2015."
Clark said her government will table its third consecutive balanced budget next month. She said the budget will not include LNG revenue forecasts.

Source:  www.huffingtonpost.ca/2015/01/22/low-oil-prices-bc-christy-clark_n_6527386.html?

Monday, January 19, 2015

OPEC puts the squeeze on US shale oil producers

January 19:
Oil-pumping equipment standing abandoned at the oil well site near Surgut in Siberia, Russia. Global investors are worried by plummeting oil prices.

The steep fall in world crude oil prices has increased pressure on some crude oil drillers in the United States, causing them to take a number of oil rigs out of service.
The Organization of Petroleum Exporting Countries (OPEC), which pumps about 40% of the world’s oil, agreed to maintain its production target at 30 million barrels a day at a November 27 meeting in Vienna. The oil cartel is wagering that US shale drillers will be first to curb output as prices drop.
“This policy of Saudi Arabia is really to challenge non-OPEC oil producers, including shale oil producers in the US,” London-based energy analyst Manouchehr Takin told New Europe.
“There are some producers for which the current capital expenditure is high, the operating cost is high. Shale oil producers fall in this category. A shale oil well can produce for a year or two but then they have to drill another well or they have to do some more investment in that well, do more fracking, so it’s not just the running, operating cost,” Takin said. “And those companies the next time which they have to drill, they will not drill because they realise that the price will not make it worthwhile,” he added.
On January 19, Brent for March settlement was down 37 cents at $49.80 a barrel on the London-based ICE Futures Europe exchange.
According to Bloomberg reports, US oil rig count has fallen by 209 since December 5, 2014, the steepest six-week decline since Baker Hughes Inc. (BHI) began tracking the data in July 1987. OPEC is winning the fight for market share and slowing the growth that has propelled US oil production to the highest in at least three decades.
Meanwhile, production from OPEC’s 12 members increased by 140,000 barrels a day in December, led by a jump of 285,100 a day in Iraq, which plans to double exports within weeks from its northern Kirkuk oil fields.
In the US, an oil boom has been prompted by the implementation of horizontal drilling and hydraulic fracturing that’s unlocked shale formations including the Eagle Ford and Permian in Texas and the Bakken in North Dakota. There are expectations that US shale drillers will be most exposed to tumbling prices as demand falls.


Source: www.neurope.eu/article/opec-puts-squeeze-us-shale-oil-producers?

Source:

Hawaiian Electric Industries Receives $27.50 Average Price Target from Analysts (NYSE:HE)

January19:

Shares of Hawaiian Electric Industries (NYSE:HE) have received an average recommendation of “Hold” from the eight analysts that are covering the stock, American Banking and Market News reports. Five analysts have rated the stock with a hold recommendation and three have assigned a buy recommendation to the company. The average twelve-month price target among analysts that have issued a report on the stock in the last year is $27.50.
Hawaiian Electric Industries (NYSE:HE) traded up 1.22% on Tuesday, hitting $34.11. 1,061,143 shares of the company’s stock traded hands. Hawaiian Electric Industries has a one year low of $22.71 and a one year high of $35.00. The stock has a 50-day moving average of $32.72 and a 200-day moving average of $27.49. The company has a market cap of $3.498 billion and a P/E ratio of 19.70.
Hawaiian Electric Industries (NYSE:HE) last posted its quarterly earnings results on Thursday, November 6th. The company reported $0.46 EPS for the quarter, beating the Thomson Reuters consensus estimate of $0.42 by $0.04. Analysts expect that Hawaiian Electric Industries will post $1.62 EPS for the current fiscal year.
Several analysts have recently commented on the stock. Analysts at Gabelli downgraded shares of Hawaiian Electric Industries from a “buy” rating to a “hold” rating in a research note on Thursday, January 8th. Analysts at Barclays reiterated an “equal weight” rating and set a $28.00 price target (up previously from $26.00) on shares of Hawaiian Electric Industries in a research note on Friday, November 7th. Finally, analysts at Zacks upgraded shares of Hawaiian Electric Industries from a “neutral” rating to an “outperform” rating and set a $34.00 price target on the stock in a research note on Tuesday, November 4th.
Hawaiian Electric Industries, Inc (NYSE:HE) is a holding company with its principal subsidiaries engaged in electric utility and banking businesses operating primarily in the State of Hawaii. The principal communities served include Honolulu (on Oahu), Hilo and Kona (on Hawaii) and Wailuku and Kahului (on Maui).

Source:    tickerreport.com/banking-finance/390235/hawaiian-electric-industries-receives-27-50-average-price-target-from-analysts-nysehe/?

Oil falls by USD1 on Chinese economy

January 19:

Brent crude oil prices fell below $49 a barrel and U.S. crude also fell more than $1 today after the global economic outlook darkened and Iraq announced record oil production.
The world's biggest energy consumer, China, faces significant downward pressure on its economy, its premier Li Keqiang was quoted by state radio as saying today.
China is expected this week to report growth slowing to 7.2 percent from a year ago, the weakest since the depths of the last global economic crisis. Data from China's National Bureau of Statistics showed on Sunday house prices fell for a fourth straight month.
Brent crude traded at $49.15 a barrel by 1646 GMT, down $1.02, having earlier dropped to a session low of $48.88. U.S. crude was down $1.02 at $47.67 a barrel.
Oil prices have dropped by more than half since June as output around the world soared while demand growth slowed. Although the International Energy Agency (IEA) said last week a reversal in the trend was possible this year, it added that prices may fall further before rising.
"There's still more supply than demand and that's a situation that will not change in just a few weeks," said Hans van Cleef, energy economist at ABN Amro.
Iraq pumped a record 4 million barrels per day (bpd) of oil in December, Oil Minister Adel Abdel Mehdi said on Sunday, as output rose from its southern terminals and supply from the north surged.
Iran's oil minister Bijan Zanganeh said on Monday consultations with other Organization of the Petroleum Exporting Countries members to stop oil prices falling had yet to bear fruit, but Tehran had no plans to call an emergency OPEC meeting to discuss prices.
"Even if the oil price goes down to $25 a barrel, the oil industry will not be threatened," the Fars news agency quoted Zanganeh as saying.
Prices found some support from a drop in U.S. drilling rigs, signifying a likely fall in future production. In a note to clients, Commerzbank analysts said latest figures from oilfield services company Baker Hughes showed the rig count hit its lowest level since October 2013.
"Shale oil production is likely to follow suit after a certain delay. This does nothing to change the considerable oversupply in the short term, however," Commerzbank said. (Reuters)

Source: www.businessworld.ie/livenews.htm?a=3253961;s=rollingnews.htm