Morning Volt for 04/13/2017

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04/13/2017
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Morning Volt

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OPEC Over-Delivers on Oil Cuts, But Sees Rivals’ Output Rising

Alex Lawler, Reuters

OPEC cut oil output in March by more than pledged under a supply reduction deal and said oil inventories had fallen in February, suggesting that its effort to clear a supply glut that has weighed on world oil prices is succeeding.But the Organization of the Petroleum Exporting Countries also raised its forecast for supplies from non-member countries in 2017 as higher oil prices encourage U.S. shale drillers to pump more, reducing demand for OPEC’s oil this year.

For U.S. Shale, Another Boom on the Horizon

Collin Eaton, Houston Chronicle

If oil prices hold above $50 a barrel, the fledging comeback in U.S. drilling could crescendo into another oil boom over the next two years.In a report Tuesday, the Energy Information Administration said it believes a second burst of shale drilling could bring U.S. oil production close to an all-time record by the end of 2018. That analysis, if correct, would mark a swift turnaround for an industry devastated by low oil prices in recent years, and challenge OPEC’s efforts to rein in the global oil glut.

As Winning Streak Falters Analysts Debate Where Next for Oil

Gemma Acton, CNBC

Oil prices traded lower in the early European session following the longest positive streak of the year for the commodity as analysts remained divided on where the price will head from here.Brent had slipped back to trade at $55.87 at 10am London time after Monday’s close cemented a six-day streak which saw prices up a cumulative 6 percent. Meanwhile, WTI was hovering a quarter of a percent lower for the session at $52.93, after notching up a fifth positive close for cumulative gains of 5.7 percent.

What’s at Stake in Trump’s Proposed E.P.A. Cuts

Hiroko Tabuchi, New York Times

What is at stake as Congress considers the E.P.A. budget? Far more than climate change.The Trump administration’s proposed cuts to the Environmental Protection Agency budget are deep and wide-ranging. It seeks to shrink spending by 31 percent, to $5.7 billion from $8.1 billion, and to eliminate a quarter of the agency’s 15,000 jobs.

China Buys More US Coal, Sends North Korea Packing

Washington Examiner

China is banning shipments of coal from North Korea because of last week’s missile test and has made up the shortfall by importing more coal from the United States. The news comes just days after President Trump met with Chinese President Xi Jinping at his Mar-a-Lago resort in Florida, where the administration said North Korea’s missile tests would be a top priority in the talks. Reuters first reported Tuesday that China’s customs department ordered all companies that receive imports from North Korea to immediately return all coal cargoes, according to three trading sources who saw the order….

Nuclear Power Is Set to Get a Lot Safer (and Cheaper) Here’s Why

Conversation

High-profile disasters such as Chernobyl and Fukushima have given nuclear power a bad name. Despite 60 years of nuclear generation without major accidents in many countries including Britain and France, many people have serious concerns about the safety of nuclear energy and the impact of the radioactive waste it generates. The very high capital cost of building a plant is also seen as a significant barrier, particularly given recent low oil prices. Plans to build a new British plant at Hinkley Point in Somerset are facing fresh opposition after it emerged the estimated lifetime costs had…

Renewable Energy Myths Abound

Isaac Orr, Detroit News

Over the past year alternative facts and fake news have become regrettable buzzwords used to dismiss any viewpoint that does not support one’s own preconceived notions.But when it comes to renewable energy, there truly are numerous myths that perpetuate throughout the media and culture that are not supported by any fair reading of the available data.

The De-Electrification of the U.S. Economy

Justin Fox, Bloomberg View

The initial drop in electricity use in 2008 and 2009 could be attributed partly to the economic downturn. But the economy grew again in 2010, and every year since. Electricity use in the U.S., meanwhile, is still below its 2007 level, and seemingly flatlining.

President Trump, It’s Time We Left Coal Behind

Danny Kennedy, Guardian

In the wake of President Trump’s latest executive orders to undo Obama’s efforts on climate and energy, it has become clear that climate science denial isn’t the only blind spot of this administration. It also suffers from what Australian commentator Waleed Aly calls commercial denialism an attempt to fulfill the campaign promise to protect the dying coal industry all while ignoring the market forces that are leading to its demise.

Scott Pruitt Faces Anger From Right Over EPA Finding He Won’t Fight

NY Times

When President Trump chose the Oklahoma attorney general, Scott Pruitt, to lead the Environmental Protection Agency, his mission was clear: Carry out Mr. Trump’s campaign vows to radically reduce the size and scope of the agency and take apart President Barack Obama’s ambitious climate change policies.In his first weeks on the job, Mr. Pruitt drew glowing praise from foes of Mr. Obama’s agenda against global warming, as he moved to roll back its centerpiece, known as the Clean Power Plan, and expressed agreement with those who said the E.P.A. should be eliminated. His actions and statements…

Oil Rebalancing: Delayed Rather Than Derailed?

John Kemp, Reuters

Oil market rebalancing has been pushed back by a few months rather than pushed off course, if recent movements in crude futures prices are to be believed.Brent futures prices for June delivery have risen in 10 of the last 11 trading sessions by a total of more than $5 per barrel.Brent has now recovered all its previous losses after the sell that began on March 8 and continued through March 23 (tmsnrt.rs/2p5snBy).

How to Dispose of Nuclear Waste

The Economist

A STEEP 5km ramp corkscrews down from the mouth of a tunnel (pictured above) into the bowels of the Earth. At the bottom, a yellow rig is drilling boreholes into the rock face, preparing it for blasting. The air is chilly, but within a few years, it may feel more like a Finnish sauna. Buried in holes in the floor will be copper canisters, 5.2 metres long, containing the remains of some of the world’s most radioactive nuclear waste. When the drilling is finished, in a century or so, 3,250 canisters each containing half a tonne of spent fuel will be buried in up to 70km of tunnels. Then the…

Roll Back of Clean Power Plan May Not Affect Coal as Expected

Breaking Energy

When President Trump signed the executive order rolling back the Obama-era Clean Power Plan, many people expected coal to rally the intent of the executive order was to end the war on coal. However, some industry experts do not foresee a rally in the coal sector at all.

The Comeback of Hydrogen

Roger Arnold, Energy Post

The hydrogen economy had been written off as a failure by most industry watchers, writes independent energy expert and former software engineer Roger Arnold. Lately, however, hydrogen seems to be making a comeback. Not because of any special technology breakthroughs but because persistence and general advances have begun to pay off.

Keystone Pipeline Could Yield Taxpayers $44 Million A Day

M. Bastasch, Daily Caller

The Keystone XL oil pipeline could generate about $44 million in tax revenues a day once it’s fully up and running, according to a new report.The expected economic, environmental, and strategic benefits of the Keystone pipeline outweigh its costs, Kimberly VanWyhe, energy policy director at the American Action Forum, wrote in the report. After nearly 9 years and more than $180 billion in lost economic activity, the Trump administration has demonstrated a commitment to move it forward.

US Shale Investment Is Back on the Upswing

Shelley Goldberg, Bloomberg View

Global upstream oil and gas merger and acquisitions reached $136 billion in 2016, according to Evaluate Energy’s global M&A 2016 review. And one area seeing a jump in activity was the U.S. Marcellus shale, where close to eight times more was invested in asset and corporate acquisitions in 2016 than in 2015.The Marcellus formation, which runs through northern Appalachia, primarily in Pennsylvania, West Virginia, New York and Ohio, is considered the second-largest natural gas field in the world, after Northfield in Qatar and Iran. Marcellus spans approximately 60.8 million net acres with an…

Could Guyana Become the Next Oil Hot Spot?

Irina Slav, OilPrice

ExxonMobil last week announced its third successful oil find offshore Guyana the tiny Latin American country squeezed between Venezuela and Suriname. The Snoek discovery follows hitting oil-bearing rock in the Liza-1 well and the Payara-1 well, where Exxon struck oil at the beginning of this year.

Venezuela Staves Off Default, but Low Oil Prices Pose a Threat

Clifford Krauss, NYT

Venezuela has put off a reckoning on its tens of billions of dollars in debt, but its ability to avoid a disastrous default will probably require much higher oil prices than appear likely in the next year or two, financial experts say.With its oil production and international reserves falling at an accelerating rate, the government is juggling as fast as it can to pay for imported food and medicines while meeting its short-term bond payments. Even as the country has slashed imports, its reserves have declined by half over the last two years, to $10.4 billion. Most of that sum is in gold and…

The Lowdown on Hydrogen, Part 2: Production

Roger Arnold, Energy Collective

he hydrogen economy had been written off as a failure by most industry watchers, writes independent energy expert and former software engineer Roger Arnold. Lately, however, hydrogen seems to be making a comeback. Not because of any special technology breakthroughs but because persistence and general advances have begun to pay off.

Permania – 100 Years in the Permian Oil Fields of New Mexico and Texas

Forbes

The Permian Basin oil field in southeast New Mexico and west Texas first started producing shortly after World War I. But almost 100 years later, it seems to keep getting better, and may become the world’s biggest oil field. A combination of new technologies and global price wars has kept the basin amazingly productive.There’s actually a word for this – it’s called Permania. And it’s on the lips of everyone in the Oil&Gas industry.

Oil Is About to Run Out of Gas – Correction Coming

Gary Bourgeault, Seeking Alpha

The combination of media coverage of the question of whether or not OPEC and others involved in the production cut deal, along with some geopolitical events that have generated a fear trade, has pushed the price of oil up far beyond what fundamentals justify, and once the air clears in the near future, it’s going to experience a strong correction.The only thing I see that could alter that scenario is if fighting in the Middle East escalates, resulting in a fear trade that drives up commodities in general and potentially disrupts a significant amount of oil.

Why Does Trump Want to Kill Energy Star Ratings?

Evan Halper, Los Angeles Times

Commercial real estate giant CBRE is always on alert for shifts in federal government policy that might impact its vast property management and investment business.But the Los Angeles-based Fortune 500 company never anticipated an effort to eliminate a voluntary, cost-effective initiative that has saved its customers millions of dollars and had almost no critics.

The Oil Giant Hidden in the World’s Biggest Mining Outfit

Farchy & Blas, Bloomberg

The usual suspects have planted their flags along the dusty byways of the Permian Basin, declaring where they’ve staked claims. There are names like Royal Dutch Shell Plc, Anadarko Petroleum Corp., Pioneer Natural Resources Co. And, on signs fronting a barbed-wire fence, BHP Billiton Ltd.For the world’s largest mining company, the heart of the U.S. shale boom in West Texas might seem to be strange territory, a very long way from the iron-ore deposits of Australia or the copper mines of Chile’s Atacama desert. But BHP actually has been in the oil business for years, with operations stretching…

Recording Puts Shell’s Nigerian Oil Deal Under a Harsh Light

Stanley Reed, NY Times

Just hours after the Dutch police raided the offices of Royal Dutch Shell last year as part of an investigation into a controversial $1.3 billion Nigerian oil deal, Ben van Beurden, the chief executive of the oil giant, placed a worried call to its chief financial officer.The investigators were quite forceful and brusque and rattled a few people, Mr. van Beurden told the finance chief at the time, Simon Henry, when Mr. Henry returned his call. But Mr. van Beurden said he was also worried about something else: Shell’s own investigators had discovered internal emails that could cast…

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