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oren

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Re: Oil and Gas Issues
« Reply #2550 on: June 24, 2018, 08:12:15 AM »
For those wondering, the traffic jam is of course in the toll plaza, and has been dubbed "Carmageddon" after hundreds of millions of Chinese came back from a holiday weekend.
https://www.smh.com.au/world/carmageddon-50lane-traffic-jam-in-china-causes-chaos-20151009-gk4tq9.html
https://www.telegraph.co.uk/news/worldnews/asia/china/11919370/Worlds-worst-traffic-jam-Thousands-of-cars-left-stranded-on-motorway-in-China.html
Apologies for the OT diversion, but I was bothered by the mystery. It does suck to be a Chinese driver.

Bob Wallace

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Re: Oil and Gas Issues
« Reply #2551 on: June 24, 2018, 08:15:14 AM »
There's an immediate downsizing from 50 lanes to 20 lanes.

50 lanes!  What's the largest number of lanes in the US and Europe?

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2552 on: June 24, 2018, 09:48:47 PM »
”When externalities are included, as in a 2015 study by the International Monetary Fund, the unpaid costs of fossil fuels are upward of $5.3 trillion annually – which works out to a staggering $10 million per minute.”

Fossil Fuel Subsidies: Overview
http://priceofoil.org/fossil-fuel-subsidies/
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Buddy

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Re: Oil and Gas Issues
« Reply #2553 on: June 25, 2018, 03:30:56 PM »
XOM will be another "casualty" of getting kicked out of the Dow Jones Industrial's.  GE was just kicked out ..... and XOM will find the same fate WITHIN 18 - 24 months MAX (and so will IBM .... for different reasons obviously ... late to the cloud).

But XOM has sealed their fate by being a poor operator, late to shale, and late to figure out the oil industry has now become the "energy industry."  They have made all the wrong moves....
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2554 on: June 25, 2018, 10:20:01 PM »
The shutdown of a key oil-sands facility in Canada is flipping the global oil market on its head and slamming shares of producers that depend on the plant.

Oil-Sands Outage Upends Global Oil Market, Overshadowing OPEC
Quote
Just as OPEC and allied producers agreed to pour more oil into global markets, a transformer blast first reported by Bloomberg News last week cut power to Alberta’s giant Syncrude plant, which turns heavy crude into synthetic light oil for U.S. markets.

As less oil flows from up north, traders are paying a record premium for crude at America’s biggest distribution hub in Cushing, Oklahoma. Globally, the gap between Brent crude and West Texas Intermediate is narrowing rapidly after widening for months. Goldman Sachs Group Inc. called the shutdown the most dramatic event in the oil market last week, as opposed to OPEC’s meeting in Vienna. Shares of Suncor Energy Inc., which controls the plant, plunged the most in more than two years.

“Syncrude is very important. It’s one of the longest-standing and longest-lifespan systems going,” said Tim Pickering, founder and chief investment officer at Auspice Capital Advisors. “So having those barrels off, which are considered base barrels for the system, is fairly impactful.’’

The 350,000-barrel-a-day facility, one of the biggest of its kind in the world, is going to be out of commission until the end of July, the company said.

The expected shortfall in supplies follows five straight weeks of shrinking inventories at Cushing, the delivery point for WTI contracts. The price for the U.S. benchmark for immediate delivery at the hub, which is typically equal to futures on the New York Mercantile Exchange or just a few cents different, surged to an unprecedented $5.75 a barrel more on Monday.

The disruption is helping set the U.S. apart from the rest of the world and intensifying a U-turn in the dynamics of the global market.

While Saudi Arabia’s push to make sure OPEC boosts supplies by close to 1 million barrels a day is strongly weighing down on Brent crude futures in London, the shortage in Canada is supporting U.S. prices. That’s helping narrow the gap between the two benchmarks, reversing months of widening when the focus was on record production from shale fields. It has global implications because the premium helps buyers around the world decide whether to ship crude from the U.S. or elsewhere.

Brent was trading at little more than $7 dollars above WTI on Monday, compared with almost $12 just two weeks ago. ...
https://www.bloomberg.com/news/articles/2018-06-25/oil-sands-outage-upends-global-oil-market-overshadowing-opec
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2555 on: June 26, 2018, 08:15:30 PM »
Trump Trade Threats Turn Exxon and Chevron From Backers to Critics
Quote
The U.S. oil industry, including Exxon and Chevron, were supportive of Trump’s tax-reform at the end of last year, saying it would boost growth in on-shore shale production as well as in building midstream and downstream infrastructure such as pipelines and chemical plants, mainly along the Gulf coast. But the administration’s tough-talk on steel and free trade have damped their enthusiasm for Trump’s agenda.

‘Less Attractive’

“Early on with tax reform, the deregulation you’ve seen in the US, those have enhanced the projects were were looking to do for our company,” Exxon’s Woods said. They “are steel intensive projects. When tariffs come on and with threats of a trade war, you risk making those projects less competitive and less attractive.”

Steel, heavily used by the oil industry, has been a flashpoint between the Trump administration and China, with levies and counter-levies contributing to mounting concerns of a full-blown trade war between the world’s two largest economies. ...
https://www.bloomberg.com/news/articles/2018-06-26/trump-trade-threats-turn-exxon-chevron-from-backers-to-critics
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2556 on: June 27, 2018, 01:23:54 PM »
Shell has Admitted Climate Change Could Affect the Company's Bottom Line
Quote
Shell has finally admitted climate change could dramatically impact the company’s bottom line — and soon.

The company’s annual report 2018 acknowledges the impact of divestment campaign for the first time and  should be seen as a clear warning to investors that the age of fossil fuels is coming to an end, according to campaigners with 350.org.

The report - just out - identifies divestment and climate litigation as material risks to the company’s profits. It says:

“Rising climate change concerns have led and could lead to additional legal and/or regulatory measures which could result in project delays or cancellations, a decrease in demand for fossil fuels, potential litigation and additional compliance obligations.”

The report specifically identifies fossil fuel divestment campaign as a material risk. “Additionally, some groups are pressuring certain investors to divest their investments in fossil fuel companies. If this were to continue, it could have a material adverse effect on the price of our securities and our ability to access equity capital markets.” ...
https://www.desmog.co.uk/2018/06/25/shell
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Buddy

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Re: Oil and Gas Issues
« Reply #2557 on: July 01, 2018, 10:15:29 PM »
Here's an article about Sears below.  What THE HELL is Buddy doing posting an article about Sears .... once a retailing giant ...... in the Oil, Oil, Oil thread?  :o

Long declines in companies look a LOT alike.  They are LONG AND PROTRACTED.  A company makes a big cut initially thinking "OK .... we've right sized now."  Only to find out that they have to keep cutting and cutting.

THAT....is the future that awaits ExxonMobil.  A LONG PROTRACTED DECLINE.  And it has already started ..... even though many of those still holding the stock don't think so.

So while natural gas may soften the blow to oil and gas companies like Exxon and others .... it won't save them.  They have a VERY, VERY, LONG downfall in front of them ..... likely to be slower and more painful than the holders of their stock are ready for.

Sears missed the change in the retailing market, just like ExxonMobil has missed the change in the energy and transportation markets.

Quote
Sears is having a tough year.

The department store chain was once the largest retailer in the United States, but has  cut its store count in half in the last five years.

http://www.msn.com/en-us/money/companies/sears-is-closing-78-more-stores-here-are-all-of-the-locations-shutting-down-where-you-live/ss-AAvOGrq?li=BBnb7Kz&ocid=iehp
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Buddy

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Re: Oil and Gas Issues
« Reply #2558 on: July 06, 2018, 03:11:28 PM »
Doubts Grow Aramco IPO Will Ever Happen

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Preparations for the public listing of Saudi Arabia’s state oil company, a centerpiece of the government’s plan to open its economy, have stalled, leaving government officials and people close to the process doubting that it will go forward at all.

The initial public offering of Saudi Arabian Oil Co., better known as Aramco, was meant to be the cornerstone of the kingdom’s plan to be less reliant on oil. It would create the largest public company in the history of capital markets, an opportunity coveted by Wall Street’s biggest names.

Yet doubts have crystallized in recent months, after two years of work to prepare Aramco for its debut. Saudi officials and people close to the process say the company and the country simply aren’t ready for an IPO that could raise $100 billion but also bring unprecedented scrutiny to the kingdom’s crown jewel.

“Everyone is almost certain it is not going to happen,” said a senior executive at Aramco, speaking of the IPO.

https://finance.yahoo.com/news/doubts-grow-aramco-ipo-ever-184200800.html

A couple of things to keep in mind about the oil market:

1)  The commodity of oil .... means that someone has to ACTUALLY TAKE DELIVERY of the product.  So the "commodity" of oil ..... is different from the EQUITY OF OIL COMPANIES.

2)  There is no "cost" to store your shares of XOM the oil company.  There is significant costs to STORING THE COMMIDITY OF OIL.

3) With Saudi Aramco's IPO now in doubt .... that is likely to have some effect on the PSYCHOLOGY OF OIL STOCK HOLDERS.

4)  There has been significant "divestiture" of OIL STOCKS over the last 5 - 10 years.  So those holders and potential buyers of the oil stocks ..... are no longer there to support the price.  In other words ..... part of the DEMAND for oil STOCKS has gone away.  So while we have NOT yet reached "peak demand" for the COMMODITY OF OIL.  We have almost certainly past the point of "peak demand" FOR OIL STOCKS (equity).

This is going to be a LONG AND PAINFUL RIDE for equity holders......

 



« Last Edit: July 06, 2018, 03:39:06 PM by Buddy »
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2559 on: July 07, 2018, 02:19:47 AM »
But higher oil prices will drive more people to EVs....

There Are Fears About an Oil Spike Above $150
- Shareholders will come to lament underinvestment: Bernstein
- Prices could surge past 2008 highs if new reserves not found
Quote
The oversupply of crude globally in recent years has masked “chronic underinvestment,” Bernstein said in the report. Oil [price] has rebounded to the highest in more than three years as the Organization of Petroleum Exporting Countries and its allies started curbing output at the beginning of last year to trim a global glut. The producers aim now to pump more to help cool the market, but disruptions from Libya to Venezuela are keeping prices elevated.

Proven reserves of the world’s top oil companies have fallen by more than 30 percent on average since 2000, with only Exxon and BP showing an improvement, helped by acquisitions, Bernstein said. Meanwhile, more than 1 billion people will urbanize in Asia over the next two decades and this will drive demand for cars, as well as air travel, road freight and plastics that also require oil, according to Bernstein. ...
https://www.bloomberg.com/amp/news/articles/2018-07-06/oil-spike-above-150-feared-as-investors-demand-cash-over-growth
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gerontocrat

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Re: Oil and Gas Issues
« Reply #2560 on: July 07, 2018, 11:58:51 AM »

But mass production sales of EVs will drive a collapse in Oil Prices back to near $10 a barrel.
At which point cost of production (let alone distribution etc) exceeds revenue. At the extreme, if sustained, oil producers exhaust cash reserves (if they have any), bankrupt a few banks (who let them borrow too much), go bust and take the shareholders down with them. Oh, and a few Countries in politically unstable parts of the world collapse into anarchy.

I wonder how many oil majors and oil producing countries are doing any real contingency planning for a sustained drop in demand for the black stuff.
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gerontocrat

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Re: Oil and Gas Issues
« Reply #2561 on: July 07, 2018, 03:17:36 PM »
Even though it was a joke ... comparing a rise of $70 to a drop of $70 .... hyperbole abounds.

Quote
It's no secret that many major energy companies have already announced a range of cut backs in high-cost countries. On the other side of the coin, Saudia Arabia and Kuwait can pump a barrel of oil for less than $10, on average. Iraq can produce oil for about $10.70 per barrel.Nov 24, 2015


Businesses and banks go bankrupt and fold all the time.


There is a break-even price for a company, and there is a break-even price for a country (that needs oil and gas royalties to balance the budget)

"The break-even is a measure of the crude price needed to meet spending plans and balance the budget." (Bloomberg)

Some countries have cut Government spending to get that break-even price down (see attached graph).

BUT
"None of the producers have yet created economies that will support their population “once hydrocarbon resources are exhausted,” the IMF said. (Or when depressed demand sends the price of crude down).

When Governments go bust the consequences are somewhat more profound than when a company or bank goes bust. (E.g. Venezuela).

https://www.bloomberg.com/news/articles/2017-10-31/saudi-arabia-leads-gulf-nations-in-cutting-break-even-oil-price
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Shared Humanity

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Re: Oil and Gas Issues
« Reply #2562 on: July 07, 2018, 06:20:47 PM »

I wonder how many oil majors and oil producing countries are doing any real contingency planning for a sustained drop in demand for the black stuff.

A sustained drop is not in our near term future.

https://www.forbes.com/sites/rrapier/2017/06/19/peak-oil-demand-is-millions-of-barrels-away/#12b8e32d6940

Sebastian Jones

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Re: Oil and Gas Issues
« Reply #2563 on: July 07, 2018, 07:38:21 PM »
But higher oil prices will drive more people to EVs....

There Are Fears About an Oil Spike Above $150
- Shareholders will come to lament underinvestment: Bernstein
- Prices could surge past 2008 highs if new reserves not found
Quote

An interesting difference between the next oil price spike (I suppose it is inevitable...) is that there are alternatives to oil and gas that were not available in 2008 or the earlier spikes. Of course these alternatives are not fully developed yet. However, every year that passes before the next price shock will be an extra year for options such as EVs, personal PV generation, battery storage etc to become better developed.

Alexander555

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Re: Oil and Gas Issues
« Reply #2564 on: July 07, 2018, 10:21:01 PM »
If Iran closes the Strait of Hormuz the price can go up fast.

jacksmith4tx

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Re: Oil and Gas Issues
« Reply #2565 on: July 07, 2018, 10:52:46 PM »
Let's not over look the fact that Saudi Arabia is planning a big IPO for a piece of their state owned oil company ARAMCO which is directly impacted by the price of oil. The Saudi's need the price as high as possible to get the financial markets to give them billions for a small 5% minority stake.
The Saudi Arabian Oil Company, better known as Aramco, claims about 261 billion barrels of proved crude oil reserves. At $70 a barrel, the value rises to more than $18 trillion.
A proposed IPO of 5% of the company would value the publicly traded slice at more than $900 billion at today’s prices and leapfrog Aramco to a position as the most valuable publicly traded company in the world.
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Buddy

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Re: Oil and Gas Issues
« Reply #2566 on: July 07, 2018, 11:00:32 PM »
If Iran were to close the Strait of Hormuz, they may as well send an invitation to the US and Israel to come in and take out their nuclear capabilities.  I don’t think you see the Iranians do that.
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Alexander555

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Re: Oil and Gas Issues
« Reply #2567 on: July 07, 2018, 11:48:05 PM »
Taking out their nuclear capabilities will not stop them from closing the Strait of Hormuz for a long time, if they want it. At the most narrow point it's 54 km wide. That's a distance they can even cover with artillery. Add some mines and warschips and it can be closed for months, taking 17 million barrels a day off the market. And the inflation is already high in Iran, their currency is collapsing, heavy pollution, water stress, demonstrations......That kind of situations produces radical regimes in general.

gerontocrat

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Re: Oil and Gas Issues
« Reply #2568 on: July 08, 2018, 01:35:14 AM »
Trump plays with fire. Someone might get burnt.

https://www.theguardian.com/world/2018/jul/05/iran-retaliate-us-oil-threats-eu-visit-hassan-rouhani-trump
Iran threatens to block Strait of Hormuz over US oil sanctions

Quote
A potential confrontation between the US and Iran is brewing in the Strait of Hormuz after Tehran threatened to block the Gulf passageway in retaliation for Washington’s looming sanctions against Iranian oil exports – a threat the US military said would be immediately countered.

The Trump administration is demanding all countries end imports of Iranian oil by 4 November as part of its new policy of hostility towards Tehran after Washington’s unilateral exit from the 2015 nuclear agreement.

Iran’s president, Hassan Rouhani, responded during a rare visit to Europe this week by signalling that Tehran could disrupt regional crude shipments and cut its cooperation with the UN nuclear watchdog. On Thursday the commander of Iran’s elite Revolutionary Guards, whose forces patrol the Strait of Hormuz – through which one-fifth of the world’s oil passes in tankers – said the Guards were ready to put Rouhani’s words into action if necessary.

Mohammad Ali Jafari, the Guards commander, was quoted by the semi-official Tasnim news agency as saying: “We will make the enemy understand that either everyone can use the Strait of Hormuz or no one.”

Bill Urban, a spokesman for US Central Command, said Washington and its allies provided security in the region and would not stand idly by. “Together, we stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows,” he said.

The threats will bring back memories of the latter years of the 1980s Iran-Iraq war, when US forces attacked Iranian territorial waters after a US ship struck an Iranian mine.

Rouhani returned to Tehran on Thursday after lobbying European leaders to deliver a robust rebuttal to the US withdrawal from the nuclear deal.

“The Americans have claimed they want to completely stop Iran’s oil exports. They don’t understand the meaning of this statement because it has no meaning for Iranian oil not to be exported while the region’s oil is exported,” Rouhani said this week in Switzerland.
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Csnavywx

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Re: Oil and Gas Issues
« Reply #2569 on: July 08, 2018, 04:13:22 PM »
They've been hem-hawing about closing the strait off and on for 40 years. It's extremely unlikely to happen. If it did, there'd be a few carrier groups there to ensure that it re-opens and stays open. (Disclosure - USN vet here).

gerontocrat

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Re: Oil and Gas Issues
« Reply #2570 on: July 08, 2018, 05:03:01 PM »
They've been hem-hawing about closing the strait off and on for 40 years. It's extremely unlikely to happen. If it did, there'd be a few carrier groups there to ensure that it re-opens and stays open. (Disclosure - USN vet here).
In the 1980's kerfuffle the Strait was not shut - but those pesky little Iranian boats kept up the pressure. It was enough to make some insurers withdraw cover and for some shippers to stop shipping and to send the price of crude up.

The potential for Iranian suicide missions might be enough to scare off shipping again.

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Re: Oil and Gas Issues
« Reply #2571 on: July 08, 2018, 05:55:37 PM »
They've been hem-hawing about closing the strait off and on for 40 years. It's extremely unlikely to happen. If it did, there'd be a few carrier groups there to ensure that it re-opens and stays open. (Disclosure - USN vet here).

30 Years Ago, US Shot Down a Passenger Plane Killing 290 Civilians & Covered It Up
https://freedomoutpost.com/30-years-ago-us-shot-down-a-passenger-plane-killing-290-civilians-covered-it-up/
"The scheduled flight was traveling from Tehran to Dubai, and there were 66 children on board, all of whom were killed, as no passengers or crew members survived the attack. The plane was shot down by the USS Vincennes, which was operating within Iranian territorial waters. It targeted the large Airbus A300 and then insisted that crew members mistook it for an F-14 fighter jet, despite the obvious difference in size."

This should serve as a reminder.
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Csnavywx

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Re: Oil and Gas Issues
« Reply #2572 on: July 09, 2018, 07:00:34 PM »
They've been hem-hawing about closing the strait off and on for 40 years. It's extremely unlikely to happen. If it did, there'd be a few carrier groups there to ensure that it re-opens and stays open. (Disclosure - USN vet here).
In the 1980's kerfuffle the Strait was not shut - but those pesky little Iranian boats kept up the pressure. It was enough to make some insurers withdraw cover and for some shippers to stop shipping and to send the price of crude up.

The potential for Iranian suicide missions might be enough to scare off shipping again.

Our tech has advanced considerably since the 80s, to the point that it would indeed be suicide for Iran to even try to mount anything resembling an offensive on the water -- or even anything within range of ship-to-shore weapons systems. The gap is even bigger than it was back then.

"Immediate counter" is a pretty gentle and generous way of putting it.

Shared Humanity

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Re: Oil and Gas Issues
« Reply #2573 on: July 09, 2018, 08:30:24 PM »
Given that the demand for oil is highly inelastic, the best possible approach for oil producing countries is to target production so that the price of oil hovers at about $100 per barrel. This serves their nation's interests while simultaneously driving long term decisions to move away from oil. As demand drops, production should be restricted so as to maintain this price.

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Re: Oil and Gas Issues
« Reply #2574 on: July 09, 2018, 08:34:55 PM »
At the shipping lanes the water is max 100 meter deep. At some places it's not even 50 meters. They can sink ships to make the strait more narrow. Some ships are more than 50 meters wide. That would block the strait physical. And how long would it take to remove them, if there are mines and mobile artillary all over the place.

Csnavywx

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Re: Oil and Gas Issues
« Reply #2575 on: July 10, 2018, 02:49:41 PM »
The navigable channel is about 40km wide. Sunken ships isn't really a viable tactic and we have a lot of minesweeping capability in that region just for such a strategy.

It really is hard to state how much of a hollow threat it is in this day for Iran to "close the Straits".

Buddy

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Re: Oil and Gas Issues
« Reply #2576 on: July 10, 2018, 02:53:32 PM »
Chinese Refiner Stops U.S. Oil Imports, Turns To Iranian Crude

Chess anyone?
Quote

An independent Chinese refiner has suspended crude oil purchases from the United States and has now turned to Iran as one of its sources of crude, media reports, citing an official from the refiner, Dongming Petrochemical Group.

What’s more, the source said that Beijing is planning to slap tariffs on U.S. crude oil imports and replace them with West African and Middle Eastern crude, including crude from Iran. China has already said that it will not comply with U.S. sanctions against Iran and it seems to be the only country for now in a position to do this.

U.S. crude oil exports to China reached 400,000 bpd at the beginning of this month, but now Beijing is planning to impose a 25-percent tariff on these as part of its retaliation for Trump’s latest round of tariffs on US$34 billion worth of Chinese goods. The retaliation began with tariffs on 545 U.S. goods worth another US$34 billion, but, Reuters reports, the oil tariffs will be announced at a later date.


Iran really doesn't care much WHO buys its oil.  Oil is a commodity .... and all oils are pretty much the same (yes....I know there is a small difference between oils, some is "thicker" and costs slightly more to refine... but oil from Iran is pretty much the same as oil from Saudi Arabia).

So if Iran can let China step in and buy its oil ..... because South Korea and Europe are cutting back on Iranian oil imports .... then Iran is fine ..... AND .... so is the price of oil.  It is only IF Iran wouldn't be able to sell all the oil it usually does, that the price of oil would then be effected.

If you're China .... you may want Iran to give China a small DISCOUNT on the oil (and I suspect China may be doing that) .... and if you're Iran, you're fine with that.  Selling oil to China at a small discount to market is a LOT better than selling NO OIL AT ALL.

So the chess game between China and US continues with the oil market AS WELL as with tariffs.

https://oilprice.com/Energy/Crude-Oil/Chinese-Refiner-Stops-US-Oil-Imports-Turns-To-Iranian-Crude.html
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Alexander555

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Re: Oil and Gas Issues
« Reply #2577 on: July 10, 2018, 03:37:03 PM »
Asia has very little oil of it's own, Europe has very little oil of it's own , and Africa has very little oil of it's own. I think there will be plenty buyers for Iranian oil, or it wil be finished with global growth.

Tor Bejnar

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Re: Oil and Gas Issues
« Reply #2578 on: July 10, 2018, 05:44:29 PM »
... Africa has very little oil of it's own. ...
This, I believe, is not supported by the evidence:

From Wikipedia and here I get the following:

Largest African oil producers
Nigeria                   1,988,000  (13th globally)
Angola                   1,674,000
Algeria                   1,540,000
Libya                        865,000
Egypt                       494,325
Sudan                      255,000
Equatorial Guinea      227,000
Repbulic of Congo     308,363
Gabon                      210,820
South Africa                 2,000
Africa Total            7,564,508

Largest global producers
1  United States     13,057,000
2  Saudi Arabia       11,951,000
3  Russia                11,257,000
4  Iran                     4,982,000

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Buddy

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Re: Oil and Gas Issues
« Reply #2579 on: July 10, 2018, 05:47:17 PM »
Here's a good read by Peter Sinclair over at Crock Of The Week....

Quote
I posted a video interview last week with a Resource Planner for Michigan’s largest electric utility – Consumers Energy – in which she described the decision to forego new gas turbines, in favor of solar, some wind, and efficiency.

Above, a recent local television spot describes further the steps to shut down coal plants.  The goal is 80 percent carbon reduction by mid-century – which is not enough, to be sure – but it’s hard to overestimate the significance of this change, which has really happened at light speed (in utility terms) over the last several years.

https://climatecrocks.com/2018/07/07/update-midwest-utility-says-goodbye-to-coal-no-more-gas-were-going-solar/

Be sure to watch the video of Jessica Woycehoski ..... a long term planner for Consumers Energy.


As some of you might know..... the oil and gas companies have been shifting some of their "mix" of business from OIL to NATURAL GAS over the past several years.  Exxon .... seeing as though she is the dumbest of the O&G sisters .... has been slower to change their mix over (which is one of the reasons XOM is a "lagging" stock in the O&G sector). 

I had ..... until recently..... felt that natural gas would have much longer staying power.  Coal was the fossil fuel that got whacked FIRST ..... and then OIL (currently) ..... and then NATURAL GAS will eventually get whacked as well.

It looks like natural gas may not have such a long ride after-all.  Previously ..... I was thinking it might be another 20 years or more before nat gas gets "whacked" (by whacked I don't mean going to ZERO .... but I mean pretty much on the slope of what coal has done (and continues to do) over the past 5 years or so.

Well..... solar and wind keep coming down in price, and some of the people that do the long range planning for electric utilities are now beginning to "skip over" natural gas because it doesn't fit into their intermediate/long term planning FROM A COST PERSPECTIVE.

THAT..... is not good news for oil and gas companies IN THE INTERMEDIATE TERM (5 - 10 years from now).  Long term, of course, it is HORRIBLE NEWS.  But that "long term" is being PULLED FORWARD more than expected.

Of course...... this also helps the move towards electrifying transportation.  That marriage of electric homes/businesses and electric vehicles is going to be VERY GOOD for consumers...... and not very good for some O&G companies and some O&G oligarch's of little Vladi's in Russia.  ;)

 
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Alexander555

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Re: Oil and Gas Issues
« Reply #2580 on: July 10, 2018, 09:23:26 PM »
... Africa has very little oil of it's own. ...
This, I believe, is not supported by the evidence:

From Wikipedia and here I get the following:

Largest African oil producers
Nigeria                   1,988,000  (13th globally)
Angola                   1,674,000
Algeria                   1,540,000
Libya                        865,000
Egypt                       494,325
Sudan                      255,000
Equatorial Guinea      227,000
Repbulic of Congo     308,363
Gabon                      210,820
South Africa                 2,000
Africa Total            7,564,508

Largest global producers
1  United States     13,057,000
2  Saudi Arabia       11,951,000
3  Russia                11,257,000
4  Iran                     4,982,000

Their reserves are not so very big. I think only Libya and Nigeria have some big reserves, like 30 to 40 billion barrels. Compared with the size of that African population it's not that much. And compared with the annual global consumption it's also not much, like 1 year global consumption.

Shared Humanity

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Re: Oil and Gas Issues
« Reply #2581 on: July 10, 2018, 09:47:29 PM »
I had ..... until recently..... felt that natural gas would have much longer staying power.  Coal was the fossil fuel that got whacked FIRST ..... and then OIL (currently) ..... and then NATURAL GAS will eventually get whacked as well. 

If by 'oil currently getting whacked', you mean that the demand and consumption of oil worldwide will continue to rise then, yes, you are correct.

https://www.forbes.com/sites/rrapier/2017/06/19/peak-oil-demand-is-millions-of-barrels-away/#3a4d7d569404

https://www.statista.com/statistics/265239/global-oil-consumption-in-barrels-per-day/

This data that I link to is actually readily available for anyone who cares to understand the energy situation and typing words in BOLD FACE UPPER CASE when making spurious claims does not make the argument more compelling.

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Re: Oil and Gas Issues
« Reply #2582 on: July 11, 2018, 08:35:07 AM »
Heigh ho, heigh ho, it's off to work we go...

https://www.eia.gov/outlooks/steo/index.php

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Tor Bejnar

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Re: Oil and Gas Issues
« Reply #2583 on: July 11, 2018, 05:30:51 PM »

Climate Denial Crock of the Week
with Peter Sinclair
 Can a Radical New Gas Turbine Be a Zero Carbon Solution?
Quote
Well, only if they can solve the problem of methane loss at every stage of the production process. But those problems are solvable, essentially with monitoring, commitment, and some chewing gum and duct tape.

Next problem is, you’ve got a whole lot of carbon, what to do with it?
...
The remaining, pure stream of CO2 can be buried underground.
...
I'm with Peter Sinclair when he writes (in the article)
Quote
I think wind and solar are moving too fast for new fossil tech to catch up, but I’ve been wrong before.
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Re: Oil and Gas Issues
« Reply #2584 on: July 12, 2018, 02:33:44 PM »
Here's a NEW video by Tony Seba on his recent trip to Atlanta (June 2018).  Video is 37 minutes .... and contains some updated information from just a few months ago (in the back half of the video).



Tony does a great job of laying out the likely course of BOTH the disruption now occurring in transportation, as well as the disruption NOW OCCURING IN FOSSIL FUELS.

Note:  "Peakers" that Tony talks about are NATURAL GAS PEAKERS  Most "peakers" are NATURAL GAS TURBINES used to provide "peak power needs". As it turns out .... nat gas peakers are quickly turning into a dinosaur ..... much like an ICE vehicle.

Tony, as usual, does a great job of laying out the likely course of the future.  HE DOESN'T LIVE IN THE PAST LIKE SOME PEOPLE.  Rear view mirrors are great to see WHAT WAS.   And even Tony uses a rear view mirror to see what HAS HAPPENED in the past.  But he is FORWARD LOOKING ..... with a BROAD VIEW of the future..... understanding that individual technologies (lidar, internet, EV's, "peakers", solar, computing power, etc) .....  as well as CHANGES IN BUSINESS MODELS come together to provide the fertile field for disruption ..... and FAST DISRUPTION AT THAT.

Enjoy....
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Re: Oil and Gas Issues
« Reply #2585 on: July 12, 2018, 04:28:16 PM »
Trump is trying to strong arm Germany to ditch Russian gas and switch to US LNG. I have a question that has been bugging me for some time. What is the conversion efficiency of turning natural gas into LNG? How much energy is lost to the conversion process? I would prefer to see it as a percentage like BTUs in = BTUs out at the point when the LNG is turned back in to gas. Of course there are other costs like transportation and storage that should be included if we want to compare pipeline gas to LNG but it looks like using LNG is a much more carbon intense process than natural gas alone.
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Re: Oil and Gas Issues
« Reply #2586 on: July 12, 2018, 09:12:50 PM »
Stepping away from the worst of the worst.

Exxon Quits Koch-Backed Business Group After Climate Change Row
> American Legislative Exchange Council (ALEC) has faced member exodus
> Oil giant disagreed with climate measures debated last year
Quote
Exxon Mobil Corp. quit the American Legislative Exchange Council, a lobbying group bankrolled by fossil fuel companies, following a disagreement over climate-change policy.

The oil giant won’t be renewing its membership after it expired in June, spokesman Scott Silvestri said by phone. Exxon had a public spat with ALEC in December when some members backed by climate skeptics such as the Heartland Institute moved to convince the federal government to drop its claim that climate change is a risk to human health.

Exxon’s departure comes amid a corporate exodus by the likes of Ford Motor Co. and Expedia Group Inc. departed, largely in response to ALEC’s positions on climate rules, renewable energy and other issues. ...
https://www.bloomberg.com/news/articles/2018-07-12/exxon-quits-koch-backed-business-group-after-climate-change-row
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Shared Humanity

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Re: Oil and Gas Issues
« Reply #2587 on: July 12, 2018, 11:51:17 PM »
ALL CAPS BOLD FACE remains and still not compelling.

Ok. I'll give you some forward looking based on hard facts.

In 2015, there were 1.282 billion vehicles on the planet, 947 million passenger cars and 335 million commercial vehicles. In 2016 sales of cars and light commercial vehicles was just over 93 million. In 2017, sales hit 96.8 million.

https://www.statista.com/statistics/265859/vehicle-sales-worldwide/

Virtually all of these sales in 2016 and 2017 and most of the sales in 2018 are/will be ICE vehicles. This will be true for a number of years.

Why do I say this? In 2016, the total number of EV's on the planet hit a new milestone...

2 million.

https://www.iea.org/newsroom/news/2017/june/electric-vehicles-have-another-record-year-reaching-2-million-cars-in-2016.html

The hundreds of millions of new ICE vehicles that will hit the roads over the next 5 to 10 years will drive the consumption of fossil fuels up.

Are EV's a disruptor? Yes. Are EV sales climbing? Yes, rapidly, but not nearly fast enough to keep hundreds of millions of new ICE vehicles from hitting the road.

http://www.ev-volumes.com/country/total-world-plug-in-vehicle-volumes/

Will oil sales flatten or decline in the next 5 years? Absolutely not. It will be a decade at the earliest before oil production declines to match the amount produced today.

There is absolutely nothing to be gained by putting on a :) and ignoring the hard facts. If we are going to fix the problem, we first need to quantify the problem. If we don't measure it, we cannot possibly track our progress towards a carbon free  world which we desperately need to get to.
« Last Edit: July 13, 2018, 12:05:49 AM by Shared Humanity »

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Re: Oil and Gas Issues
« Reply #2588 on: July 13, 2018, 08:17:15 AM »
Forgot to crosspost this last month, from the coal thread:

Debunked: The G20 Clean Gas Myth.
http://priceofoil.org/content/uploads/2018/06/debunked_g20_eng_07_web.pdf
Adding Fig5 below.

Quote
CONCLUSION

The myth of fossil gas as a “bridge” to a stable climate does not stand up to scrutiny. While much of the debate to date has focused on methane leakage, the data shows that the GHG emissions just from burning the fossil gas itself are enough to overshoot climate goals. We must reduce fossil gas combustion rather than increase it, and the fact that methane leakage will never be reduced to zero only makes this task more urgent.

Expanding the renewable energy sector does not require expanding fossil gas use. Existing gas plants will not be shut down immediately, but storage, demand response, and other grid management solutions will increasingly support renewable energy as fossil gas is phased down.

Despite this, many G20 countries are pushing forward with the development of fossil gas infrastructure, using the myth of gas as a clean energy transition fuel to burnish the endeavor with green credentials. But current plans for fossil gas extraction in G20 countries alone – excluding the rest of the world’s fossil gas fields – risks claiming a huge percentage of the remaining emissions budget, rendering the transition fuel idea a dangerous myth.

There is an urgent need for policymakers and investors to use climate goals as a starting point for decisions around fossil gas, in the G20 process and elsewhere. Rather than searching for ways to justify using the abundant supply that new drilling methods have unleashed, policymakers and investors should consider how much fossil gas is compatible with achieving the goals of the Paris Agreement. The answer is the same for fossil gas as it is for coal and oil: We need less, not more.

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Sleepy

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Re: Oil and Gas Issues
« Reply #2589 on: July 13, 2018, 10:38:07 AM »
Natural gas is a $22bn distraction for EU shipping that won’t decarbonise the sector

https://www.transportenvironment.org/press/natural-gas-22bn-distraction-eu-shipping-won%E2%80%99t-decarbonise-sector-%E2%80%93-study

Quote
Rolling out liquified natural gas (LNG) infrastructure for shipping in Europe would cost $22 billion and deliver, at best, a 6% reduction in ship greenhouse gas emissions by 2050 compared to the replaced diesel, a new independent study for Transport & Environment (T&E) by the UMAS consultancy finds.[1] To date Europe has spent half a billion US dollars on LNG infrastructure for refuelling ships.
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Re: Oil and Gas Issues
« Reply #2590 on: July 13, 2018, 11:02:25 AM »
Omnia mirari, etiam tritissima.
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oren

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Re: Oil and Gas Issues
« Reply #2591 on: July 13, 2018, 02:01:24 PM »
Trump is trying to strong arm Germany to ditch Russian gas and switch to US LNG. I have a question that has been bugging me for some time. What is the conversion efficiency of turning natural gas into LNG? How much energy is lost to the conversion process? I would prefer to see it as a percentage like BTUs in = BTUs out at the point when the LNG is turned back in to gas. Of course there are other costs like transportation and storage that should be included if we want to compare pipeline gas to LNG but it looks like using LNG is a much more carbon intense process than natural gas alone.
I don't have any numbers either but surely LNG is much more carbon and methane intensive than plain natgas. But in any case both LNG and/or pipeline imports are a very bad idea strategically, as any study of military history can attest. Solar and wind should be deployed in mass to achieve energy independemce even if AGW is not a pressing concern. And if/when renewables are incorporated into defense budgets, they will actually happen.

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Re: Oil and Gas Issues
« Reply #2592 on: July 13, 2018, 03:17:54 PM »
Yeah, but it isn't a TESLA man! :)

Years ago now I saw the development of the Wing-Sail concept. eg this here http://www.windwingtech.com/

But they had deployed it onto a cargo ship of some kind. Always wondered what happened to that "good idea" as it was supposed to cut fuel costs by ~50% on oil coal tankers etc.

Not really a "sail" it was shaped like a huge airplane wing installed vertically which provided "lift" in a horizontal direction by adjusting the direction of the wing mechanically similar to how a sail needs to be positioned.  The big thing about this was it could have been retrofitted on many large ships. Cost factors of course depended on the cost of oil and install costs. Maybe they couldn't get the right funding back then. Which is where most good ideas always end up.
You're correct, simply buy and rebrand as usual?  :)

Rotor sails were discussed later on in that thread and there are some real data on those in operation (Viking Line):
A 3-5% reduction in fuel per rotor sail, there are ships sailing with those installed. Installation costs are 1-2 million euros per sail, so they will probably be cost effective on windy routes, but not effective in mitigation terms.
As usual it's that pesky mitigation part that's troublesome.
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Re: Oil and Gas Issues
« Reply #2593 on: July 13, 2018, 04:48:38 PM »
Trump is trying to strong arm Germany to ditch Russian gas and switch to US LNG. I have a question that has been bugging me for some time. What is the conversion efficiency of turning natural gas into LNG? How much energy is lost to the conversion process? I would prefer to see it as a percentage like BTUs in = BTUs out at the point when the LNG is turned back in to gas. Of course there are other costs like transportation and storage that should be included if we want to compare pipeline gas to LNG but it looks like using LNG is a much more carbon intense process than natural gas alone.
I don't have any numbers either but surely LNG is much more carbon and methane intensive than plain natgas. But in any case both LNG and/or pipeline imports are a very bad idea strategically, as any study of military history can attest. Solar and wind should be deployed in mass to achieve energy independemce even if AGW is not a pressing concern. And if/when renewables are incorporated into defense budgets, they will actually happen.
Thanks oren,
I remember years ago when oil was over $110 that there was a post on the Oil Drum website that estimate that you loose between 20%-25% of the BTU energy in the conversion process. Add in transportation and storage and you can see things get uneconomical when natural gas goes over $7 mcf.
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2594 on: July 14, 2018, 08:36:11 PM »
‘We Will Be Waiting’: Tribe Says Keystone XL Construction Is Not Welcome
The controversial oil pipeline would cross the Cheyenne River near a reservation, and the tribe is fighting it. TransCanada plans to bring in equipment this month.
https://insideclimatenews.org/news/13072018/keystone-xl-pipeline-native-american-resistance-oil-spill-cheyenne-river-sioux-dakota-access-transcanada
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2595 on: July 17, 2018, 06:53:04 PM »
ExxonMobile:  “We’re advancing auto efficiency with technology like the Homogeneous Charge Compression Ignition. This mechanism can help increase fuel economy by 30% while lowering emissions. #TechTuesday”
https://twitter.com/exxonmobil/status/1019235548052025345

No_Dumbies: “lowering emissions by 30% leaves 70% emmissions in an era that is demanding negative emissions via uptake systems that heal and upcycle .. get with the future. #greennewdeal”
https://twitter.com/_touch_update_/status/1019236219828436992


(Honestly, posted the above mostly for this GIF:  pic.twitter.com/lTaN0tggO0  )  ;D
Or here:  https://twitter.com/teslabull/status/1019249321366077440
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Buddy

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Re: Oil and Gas Issues
« Reply #2596 on: July 26, 2018, 05:49:30 PM »
Shell announces $25 billion share buyback program as quarterly profits miss estimates

https://www.cnbc.com/2018/07/26/shell-earnings-net-profit-comes-in-at-xxx.html

I think XOM reports this week.  The buybacks in the oil patch remind me of the buybacks by the US banks from mid 2007 (when things started to look iffy) right up through mid 2008 when shit was already starting to hit the fan.  The banks INSISTED that they could continue their buybacks.  THAT ..... didn't end so well.

Lately there have been a lot of articles discussing things like "oil at $200" or "oil at $150".  A LOT of bulls out there.  For me ..... that is NOT a good sign, especially when storm clouds continue to roll in.  Here is one lone sole discussing oil at $45 ......

The bulls are wrong — here's why oil could plummet to $45: Citi's top oil forecaster


Quote
'The bull argument is based on faulty analysis,' says Citi global head of commodities research Ed Morse

Morse goes on the describe two things not picked up by the bulls:  (1) technology has allowed the oil companies to be much more efficient with their capital in their capital spending budgets, and (2) bulls are overplaying the issue of diminishing returns from some of the oil fields.

Interesting article for any "oil bugs" out there....

https://business.financialpost.com/commodities/energy/the-bulls-are-wrong-heres-why-oil-could-plummet-to-us45-citis-top-oil-forecaster


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Re: Oil and Gas Issues
« Reply #2597 on: July 27, 2018, 05:01:49 PM »
The current economic cycle is very long in the tooth, and the usual creaks and groans are starting to show (Chinese credit issues, car loan delinquencies etc.). The combination of a significant recession together with increasing usage of electric vehicles could bring home the long-term reality for the oil companies very fast.

Not only would their share prices crash, but their access to funding would be reduced. These things tend to take longer to happen than anyone expected, then happen much faster that anyone expected.

The irony is that the next few years could see both Tesla (just one company, not the whole EV industry) and XOM going into bankruptcy.

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Re: Oil and Gas Issues
« Reply #2598 on: July 29, 2018, 01:38:07 AM »
U.S.:  West Virginia

Federal appeals court delivers blow to Mountain Valley Pipeline
Quote
In what environmentalists called a major victory, a federal appeals court on Friday struck down two key decisions allowing a natural gas pipeline to slice through the Jefferson National Forest.

The 4th U.S. Circuit Court of Appeals sided with the Sierra Club and other conservation groups that challenged approvals by the U.S. Forest Service and the Bureau of Land Management for a 3.6-mile segment of the Mountain Valley Pipeline.
...
During oral arguments in May, a three-judge panel raised pointed questions about the Forest Service’s acceptance of Mountain Valley’s assurances that it could control erosion and sediment caused by running a 42-inch diameter buried pipeline along steep mountainsides.

“MVP’s proposed project would be the largest pipeline of its kind to cross the Jefferson National Forest,” Judge Stephanie Thacker wrote in the opinion.

“American citizens understandably place their trust in the Forest Service to protect and preserve this country’s forests, and they deserve more than silent acquiescence to a pipeline company’s justification for upending large swaths of national forest lands.”

Although the court’s decision was tailored to a small section of the 303-mile pipeline, opponents said it could have implications beyond the national forest.

Joining Thacker in the 44-page opinion were Chief Judge Roger Gregory and Judge William Traxler; the same trio is currently considering another case in which a key approval by Virginia’s State Water Control Board is under attack.

A similar ruling in that case “could mean trouble for the MVP’s route in the entirety of Virginia,” the Sierra Club said in a statement. ...
https://www.roanoke.com/news/local/federal-appeals-court-delivers-blow-to-mountain-valley-pipeline/article_b8b6efd4-ddb7-529b-aee9-a5c5ecebb571.html
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2599 on: July 30, 2018, 01:04:00 AM »
“The market, looking at the numbers, clearly didn’t know or expect the downtime” at Exxon’s refineries, said Doug Leggate, an analyst at Bank of America Merrill Lynch, during a call with company management. “You guys obviously did.”

Big Oil Leaves Analysts Fuming About Being in the Dark on Refinery Outages
Quote
Darren Woods, Ben van Beurden and Mike Wirth, three of the world’s most powerful oil executives, forged their reputations by efficiently managing razor-thin margins at their companies’ refineries.

You wouldn’t know it, though, given their latest earnings results.

Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp., the companies they lead, all missed earnings estimates due to issues with their downstream units. At a time when dedicated refiners such as Phillips 66 and Valero Energy Corp. have become the rock stars of the earnings season, the integrated oil majors are struggling to meet optimistic estimates largely based on rising crude prices. ...
https://www.yahoo.com/amphtml/finance/news/big-oil-leaves-analysts-fuming-230134222.html
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