Quote of the Week
[The Trump administration stated there is a “reduced the urgency of the US to conserve energy.”] I strongly disagree with this argument. It isn’t certain that the US will become a net exporter of petroleum and petroleum products, but in any case, that’s not a reason to forego conservation. There are economic reasons, national security reasons, and environmental reasons for conserving oil.”
Robert Rapier, energy industry commentator
Graphic of the Week
Contents
1. Oil and the Global Economy
2. The Middle East & North Africa
3. China
4. Russia
5. Venezuela
6. The Briefs
1. Oil and the Global Economy
Oil prices climbed for the first three days last week with Brent climbing above $80 a barrel on Wednesday before falling back to close at $78.09 on Friday. An unexpected drop in the US crude stocks of 5.3 million barrels and a warning from the IEA that the global oil market was tightening and that higher prices are coming were behind the spike. However, concerns that the Sino/American trade war is showing no sign of getting better took over and sent prices lower. During the week, the price spread between Brent and WTI climbed above the $10 a barrel mark and closed the week at $9. The size of the price spread should continue the export demand for WTI in the coming weeks sending US crude supplies even lower.
Some analysts are warning that oil prices could reach $100 per barrel after the Iran sanctions are reimposed on November 4th. Oil prices have not been above $100 since 2014. Despite global oil production surpassing the 100 million b/d mark in August, there are problems ahead. Venezuela’s production for August was down to 1.22 million b/d and seems likely to go lower. Iranian exports continue to contract, and there is always trouble in Libya and Nigeria which could reduce their oil production by hundreds of thousands of barrels per day at any time. Even the ever-optimistic EIA is saying that the outlook for US shale oil production no longer looks as good as it did a few months ago.
OPEC: August saw the cartel’s biggest month-on-month increase in more than two years, bringing the supply from the group’s 15 members to a nine-month high. The increase came from higher production in Libya, Iraq, Nigeria, and Saudi Arabia. OPEC’s increase far outweighed, at least for now, falling Iranian production. Global oil production in August climbed above 100 million b/d for the first time.
Russia’s energy minister Alexander Novak says that OPEC, Russia, and their allies within the production cut alliance should sign an agreement on the group’s broader cooperation in December so that the new partnership format comes in force from January 1, 2019. A formal agreement between Russia and its allies in the former Soviet Union would bring about the most significant change to the OPEC cartel since its founding in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Despite its massive oil exports, Moscow has long feared to join the organization for fear that its energy policies could be affected by votes or compromises inside OPEC.
The success of the OPEC+ production freeze during the last two years has brought about a change in thinking for it resulted in a doubling of oil prices and saved some major oil exporters from near-bankruptcy. The addition of circa 15 million b/d to OPEC’s 32 million b/d allows the combined organization to have more impact on the oil markets in the years ahead. This union could become important if the Sino-American trade war results in a significant drop in the demand for oil.
Despite the euphoria over OPEC’s production successes in August, there are still many dangers for the cartel’s production ahead. The 15-member OPEC has not increased its production significantly in the last 15 years and, except for a few bright spots, most of its oil fields are in decline. Several major OPEC oil exporters such as Venezuela, Nigeria, Libya, Iraq, and Iran, are involved in domestic or international situations which could reduce their exports in the next year or two.
US Shale Oil Production: US crude oil production in 2019 is expected to grow at a slower rate than previously forecast, according to a monthly EIA forecast released last week. US crude production now is expected to rise by 840,000 b/d to 11.5 million next year, lower than a previous estimate for it to grow 1.02 million b/d to 11.7 million. Oil demand growth in 2019 is expected to rise by 250,000 b/d, a decrease from EIA’s previous projection for an increase of 290,000 b/d. The agency left 2018 production and demand growth forecasts unchanged. Behind this change is the recognition that drilling activity in the Permian basin has begun showing signs of a slowdown due to limited pipeline takeaway capacity and decreasing well productivity.
Although numerous challenges are facing producers in the Permian Basin, interest remains high. The price rights to drill on the New Mexico side of the Permian Basin soared to $95,001 an acre in a recent federal government auction, a record high for land in the Permian. The state’s previous record was $40,001 an acre set in December, according to a statement yesterday by the US Department of the Interior. The two-day auction saw bids on 142 parcels of land and raised $972 million, more than the whole of 2017 and double the 2008 record.
The recent auction provides a rare insight into how oil producers value drilling rights in the Permian, most of which is in Texas, where land and minerals are privately owned. Record prices show that despite a slowdown in activity due to pipeline shortages, explorers view the Permian as a long-term asset. “The Permian is the center of the oil universe when it comes to investment right now and just because of a few pipeline constraints that’s not going to change.”
New pipelines can’t get built fast enough in the Permian Basin, where oil is selling at a $15 discount and producers are locking in prices for the next two years. Several multi-billion pipeline projects are under construction or planned over the next few years to get the crude oil and natural gas to refineries on the Gulf Coast. However, a new report by Wood Mackenzie suggests that producers don’t have faith that the pipelines will be done on time. The number of Permian producers hedging their bets for 2020 increased by more than five times in the second quarter. According to Wood Mackenzie, “The only reasonable conclusion one can draw from this surge is that Permian producers are concerned that key pipeline projects won’t be completed on schedule.”
US Highway 285 is a major north-south route within the Permian Basin of West Texas and southeastern New Mexico. Thanks to the oil boom in the region, the highway is much busier than it was a decade ago. More flatbed trucks rely on the road to haul equipment and supplies. In addition, the region’s constrained pipeline capacity has led to a large number of tanker trucks hauling crude oil on 285 and other highways in the region. The Texas Department of Transportation is addressing the limitations on 285 through a series of improvements which will take years to complete. The highway department has placed an 11-foot-wide lane restriction on 285 which is forcing the oil industry to modify their routes because they move oversized loads every day. “These alternate routes increase the time and distance to move a rig, so what started out as a short routine move could easily creep into a long-distance rig move, having a substantial impact on the cost associated with the rig moves.”
2. The Middle East & North Africa
Iran: The prospects for Iranian oil exports after US sanctions are imposed remained the top oil market story last week. Iranian crude production fell 200,000 b/d from July to 3.52 million b/d in August as hedging activity indicates some traders are preparing for a price spike above $80 a barrel as a result of further declines in Tehran’s exports. S&P Global Platts Analytics expects 1.44 million b/d of Iranian crude and condensate to leave the market when the US secondary sanctions snap back November 5, compared with April levels. The EIA says Iran’s production already has dropped 310,000 b/d since April.
Tehran’s problems could increase as it meets obstacles in selling its condensate and refined products. Iran is dependent on exports of condensates and fuel oil, while it relies on gasoil and gasoline imports. Unlike when the US imposed sanctions in 2011, the Trump administration has broadened the list of secondary sanctions, to include condensates and other oil products “obtained from the processing of crude oil (including lease condensate), natural gas, and other hydrocarbon compounds.” There have been signs Iran’s exports of fuel oil and LPG have started to fall in the past few weeks.
Iran has started to store oil in its own tankers off its coasts ahead of the US sanctions. According to tanker tracking data, at least five tankers owned by the National Iranian Tanker Company have been sitting fully laden with crude oil off the Kharg Island oil terminal in the Persian Gulf over the past two and a half weeks. Another two tankers full of Iranian condensate, the ultra-light oil Iran produces from its natural gas fields, have been anchored off Dubai for weeks.
While Russia, China, and Turkey remain firm in their commitment to Tehran, there are reports that other countries such as Japan, India, and South Korea are giving in to Washington’s pressure and are reducing their purchases of Iran’s oil.
Last week the issue of whether the sanctions will result in a substantial increase in oil prices came back into the news. During an interview in Moscow last week, US Energy Secretary Perry said last week that Saudi Arabia, the United States, and Russia could between them raise global output in the next 18 months to compensate for falling oil supplies from Iran and elsewhere. Countering this view was Iran’s OPEC governor Hossein Kazempour Ardebili who told Reuters that there is already an emerging “supply shortage” and little spare capacity virtually everywhere means that the US can’t achieve its goal of bringing Iranian oil exports down to zero.
Iraq: Baghdad’s oil production grew steeply again in August, as the federal government continued to unlock field capacity in the wake of loosening OPEC constraints. Combined output from the federal government and the autonomous Kurdistan Regional Government (KRG) hit 4.81 million b/d. Iraq replaced Saudi Arabia in August as the top oil supplier to India as refiners turned to Iraq to compensate for a lower import of Iranian oil. Gulf Keystone Petroleum said it would resume investing in the Shaikan oil field in Iraq’s Kurdistan Region, aiming to boost production to 55,000 b/d in the second half of 2019, from just over 30,000 b/d now.
The political and social situations, however, are not going so well. Demonstrations flared in Basra this month after thousands fell ill because the water supply was contaminated and intensified last week after several protesters were killed. Protesters burned the offices of most political parties in Basra, including Iran-backed paramilitary groups. Prime minister Haider Al-Abadi is facing growing domestic discontent as veiled criticism from the country’s top Shia cleric, and violent street protests threaten his attempts to form a new government. The strife is undermining hopes that elections held in May would mark a turning point and set Iraq on the road to recovery after decades of conflict. In a rare intervention, the office of Ayatollah al-Sistani, Iraq’s top Shia cleric, issued a statement urging politicians in power not to run again, a move interpreted as a call for Mr. Abadi to abandon his efforts to remain prime minister.
Islamic State militants have bombed an oil pipeline in Kirkuk, northern Iraq. It was not immediately clear which pipeline the Islamic State militants had blown up and what the effect on shipments from northern Iraqi fields will be. The Baiji refinery, which was shut down in 2014 during the war with Islamic State, has partially resumed operations. The 70,000 b/d Salahaddin-2 unit of the refinery is operating at full capacity as of last week.
Libya: Several armed men attacked the headquarters of Libya’s National Oil Corporation in Tripoli last week, killing at least two staff members. In the first attack of its kind against the top managers of Libya’s state oil industry, two of the gunmen were killed and at least 10 NOC staff wounded, officials said. Security forces said they had regained control of the building in the center of the city. The attack came less than a week after a fragile truce halted fierce clashes between rival armed groups in Tripoli which has been in turmoil since a 2011 uprising.
The US Treasury Department, along with the United Nations, placed sanctions on Libyan militia strongman Ibrahim Jadhran over the June attacks on the country’s oil ports. The sanctions were proposed by Libya’s Permanent Mission to the UN. Ibrahim Jadhran, former leader of Tripoli-backed Petroleum Facilities Guard (PFG), now finds himself on the wrong end of both the United Nations and the United States.
3. China
Christine Lagarde, the IMF managing director, told the Financial Times that the escalating US-China trade war could deliver a “shock” to already struggling emerging markets, raising the prospect that a crisis ripping through Argentina and Turkey could spread across the developing world. She warned that “things could change rapidly” and cited the “uncertainty and lack of confidence already produced by the threats against trade, even before it materializes.”
Worries about the Chinese economy continue with Investment in factories, railways, and other projects in China so far this year growing at its slowest pace in more than a quarter-century. Fixed-asset investment outside rural households rose 5.3 percent in the January-August period from a year earlier, the National Bureau of Statistics said Friday. The rate was the most sluggish since 1992 when the investment data was first available.
China is the centerpiece of what a growing number of financial analysts warn could be another global economic recession. Bank of England Governor Mark Carney recently said that China is “one of the bigger risks” to global financial stability. Since 2007, China’s debts have quadrupled. According to the IMF, its total debt is now about 234 percent of gross GDP, which could rise to 300 percent by 2022. The significance of China’s dwindling supplies of cheap domestic energy is little understood by mainstream economists.
Beijing is considering allowing its northern provinces to decide on individual output cuts by heavy industry to rein in emissions during the winter. Talk of the move drove down steel and industrial raw material prices and comes as Beijing looks to end its “one-size-fits-all” fight on pollution to limit economic disruptions. “Production cuts on heavy industry will remain this winter, but detailed cutting rates will be set by local authorities based on their own situation,” said a knowledgeable Chinese source.
PetroChina has just signed a deal to buy 3.4 million tons of LNG per year for 20 years from QatarGas. This is China’s largest ever LNG supply deal. State-controlled QatarGas has agreed to supply PetroChina from the QatarGas 2 project, a joint venture between Qatar Petroleum, Exxon Mobil and France’s Total. The first cargo will be delivered later this month. The deal comes as President Trump ramps up the ongoing trade war between the US and China. Trump says he is ready to levy additional taxes on practically all Chinese imports, threatening duties on $267 billion of goods over and above planned tariffs on $200 billions of Chinese products. If China’s retaliation includes a 25 percent duty on US LNG, it would no longer be competitive for Chinese importers.
4. Russia
On Friday, Russia’s central bank raised the key rate from 7.25 percent to 7.5 percent per annum. According to the bank’s statement, the annual inflation is forecast to be 5-5.5 percent in 2019 and to return to 4 percent in 2020. After a week in which the ruble fell to a two-year low against the dollar, investors anxious about emerging market turmoil have been concerned about what the bank would do. The Kremlin has been putting the bank under unprecedented pressure to cut the benchmark rate — which stands at 7.25 percent — to help stimulate growth to pay for President Vladimir Putin’s ambitious spending targets.
The General Court of the European Union upheld sanctions imposed on several Russian oil companies and banks after the annexation of Crimea in 2014 and Russia’s involvement in the Ukraine crisis.
Russia’s largest independent gas producer, Novatek, surpassed in market value state behemoth Gazprom for the first time. Strange as this may seem to casual observers of the Russian gas market, Novatek’s value has been rising consistently over the last years while Gazprom’s has stagnated. The most apparent difference between the two is ownership. Gazprom is majority owned by the Russian state. Government ownership means Gazprom caters more to the government’s political interests rather than the interests of its minority shareholders. It also means the company undertakes projects with uncertain returns as a state company while private shareholders like certain returns.
5. Venezuela
The government has agreed to hand over at least seven oil fields to little-known companies that will be paid to boost output through contracts similar to ones killed off during the Hugo Chavez period. The new plan signals that President Maduro, who is struggling under a hyper-inflationary economic meltdown and fast-declining oil output, is willing to reverse the efforts of his predecessor to expand the state’s role in the energy industry. However, the plan faces significant hurdles because the companies involved have no known experience operating oilfields, and US sanctions would inhibit more experienced firms from getting involved. Venezuela’s production fell in August by 20,000 b/d to 1.22 million b/d. Compared to August last year, Venezuelan oil production is down by 680,000 b/d.
During a rare visit by President Maduro to Beijing, China agreed to several small oil deals with Venezuela last week but gave no public confirmation that it would extend more loans to the country. Venezuela faces a stiff payment schedule over the next two months of about $2 billion to bondholders, some of whom have debt secured against US-based refiner Citgo, and in compensation to western oil companies for past nationalizations in Venezuela.
Simon Zerpa, Venezuelan finance minister, said earlier this week that Beijing would extend a $5 billion loan to Caracas. But Premier Li Keqiang, while saying that China would help Venezuela, made no mention of a loan of that size. China lent the country more than $50 billion over the past 10 years, mostly backed by oil deliveries that are no longer being made. The largest loan, from the China Development Bank in 2010, was worth more than $20 billion. Terms of China’s loans are not made public.
Venezuela resumed supplying a critical domestic crude to political ally Cuba this summer as its refining output fell further. The shipments, which began in June and continued through August, totaled 4.19 million barrels of Venezuela’s Mesa 30 crude, a type used to produce fuel at domestic refineries and to blend with heavier oil for export. Venezuela has supplied Cuba with oil under agreements since 2000. Havana has been deeply involved in providing advice and assistance to Caracas’s intelligence and security services. As Venezuela’s domestic situation deteriorates, Cuban security assistance may be a priority for the embattled President who may be vulnerable to a coup or uprising.
6. The Briefs (date of the article in Peak Oil News is in parentheses)
USA vs. Saudi vs. Russia: The United States likely surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer earlier this year, based on preliminary estimates by the US Energy Information Administration. EIA expects that US crude oil production will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019. (9/14)
In the UK’s oil and gas industry, despite reduced costs and efficiency improvements, the sector could lose its significance as a key contributor to the UK economy and energy supply, due to record low drilling activity and lack of new project approvals. (9/12)
Oil and Gas UK said in its annual Economic Report that a 50 percent decline in drilling activity over the last five years was a cause for “real concern.” It said the industry had initiated just four exploration wells in the first eight months of 2018 and the expected number for the whole year, at 10-12 wells, would be the lowest since 1965. (9/11)
Offshore North Korea, seven countries have joined together to hunt ships smuggling fuel. More than 50 personnel from allied countries will be hosted aboard the USS Blue Ridge, an American command ship stationed in Yokosuka, Japan. The coalition will include the U.K., Australia, New Zealand and Canada—the U.S.’s partners in the Five-Eyes intelligence alliance—as well as France, Japan, and South Korea. (9/15)
Offshore Egypt, the huge Zohr gas field has increased its production six-fold since it started production in January this year. Production at Zohr has increased to 2 billion cubic feet per day (bcfd) from 350 million bcfd when it began commercial production in January 2018. Italy’s Eni discovered the field in 2015 when it said that it was the largest ever gas discovery in the Mediterranean. Eni and its partners aim to reach plateau production in excess of 2.7 bcfd in 2019. (9/14)
Egypt has signed a deep-water oil and gas exploration deal with Royal Dutch Shell and Malaysia’s Petronas worth around $1 billion for 8 wells in the country’s West Nile Delta. The country also signed a second $10 million deal with Rockhopper, Kuwait Energy and Canada’s Dover Corporation for exploration in the Western Desert. Egypt aims to be a regional hub for the trade of LNG after a string of major discoveries in recent years including Zohr. (9/15)
In South Sudan, China National Petroleum Corporation (CNPC)—which holds stakes in the two joint venture companies pumping nearly all of South Sudan’s current 165,000 b/d—signed at the end of last month a memorandum of understanding (MoU) to boost existing production and consider acquisitions of new acreage. (9/12)
Panama collateral damage? Fewer ships from China and the United States could use the Panama Canal if trade tensions escalate between the two economic giants, but the dip could be offset by grain exports from northern Brazil. The canal, which cuts through Panama creating an essential shipping route between the Atlantic and Pacific oceans, is a major source of revenue for the central American country. (9/15)
In Mexico, incoming Mexican President Andres Manuel Lopez Obrador announced that his government will soon be pouring $3.9 billion of next year’s budget into oil extraction, specifying the allocation of his previously disclosed $16 billion investment plan for Mexican oil in 2019. The investment is part of a broader plan to increase Mexico’s long-waning oil output by 800,000 b/d and bring an end to Pemex’s financial woes. (9/14)
In Canada, China’s Sinopec Corp has joined a group planning to build a 167,000 barrel/day oil refinery in Alberta, the project’s consultant said, an enterprise that would strengthen demand and prices for the Canadian province’s heavily discounted crude. (9/15)
Cyber threats in the US against the energy industry are growing steadily. Jeremy Samide, chief executive officer of Stealthcare, a company which seeks to improve cyberdefenses for a diverse set of US companies, sees the cyber battlefield starkly. He says the threat is very real, and he puts the threat of serious attack at 83 percent. (9/11)
The US oil rig count increased by 7 to reach 867, Baker Hughes reported. With the natural gas rig count staying flat, the total number of active oil and gas rigs climbed to 1,055. The combined rig count is now 119 rigs higher that it was this time last year. (9/15)
Crude by rail is making a comeback as North American crude production outpaces takeaway pipeline capacity in the Permian and lower rail costs make Bakken margins attractive to both US Atlantic Coast and US West Coast refiners. (9/11)
Decade+ GOM leak? Between 250 and 700 barrels of oil per day are leaking into the Gulf at the site where Taylor Energy Co.’s oil platform collapsed in Hurricane Ivan in 2004, new analysis concludes. The same location is where a persistent sheen of oil on the surface has appeared ever since. That leakage rate is higher than previous estimates Taylor has cited, which had the spill emitting around three gallons of oil per day. (9/15)
The Port of Corpus Christi, which is handling booming exports of US crude oil, has invoked a 12-year-old criminal case against the commodities trading house Trafigura as it seeks to slow the latter’s efforts to build an alternative site offshore to load supertankers. (9/12)
California Governor Jerry Brown signed into law this weekend a bill that aims to make drilling for oil and gas off the state’s coast unprofitable. The bill sought to deter oil and gas drillers by banning infrastructure necessary for offshore drilling, including docks, pipelines, and other onshore installations. (9/11)
Natural gas, helped by gains in energy efficiency, will dethrone oil as the biggest energy source that the US uses by the end of this year. That’s according to the chief executive of Norway-based risk management consultancy DNV GL, and it would hardly come as a surprise to anyone who’s been following energy developments in the world’s top gas producer. (9/12)
In Alaska, ExxonMobil has agreed on terms and conditions for the sale of its 13.8 Tcf of natural gas resources in the north slope’s Prudhoe Bay and Point Thomson fields of Alaska’s North Slope to Alaska Gas Development Corp., the state-owned entity leading the development of the Alaska LNG Project. (9/11)
Relaxing methane rules: The proposed changes, among other measures, would give drillers a year to do leak inspections instead of just six months, and 60 days to make repairs instead of 30, the document said. Environmentalists are likely to oppose the plan, asserting the delayed inspections and repair schedules are likely to increase the amount of harmful gases released into the environment, and that the proposal opens the door to further rollbacks of climate regulations. (9/11)
World coal steady: the most striking statement in BP’s analysis is “there has been almost no improvement in the power sector fuel mix over the past 20 years. The share of coal in the power sector in 1998 was 38 percent — exactly the same as in 2017.” (9/12)
Nukes still growing: The world is consuming ever-growing amounts of energy, and consumption is set for a particularly intensive growth in electricity. This fast growth will require more generation capacity, some of which will be nuclear. In fact, according to a report by the International Atomic Energy Agency, the world’s nuclear power generation capacity may grow to 511 GW(e) by 2030 from 392 GW(e) in 2017, and further to 748 GW(e) by 2050. This is a high case scenario. (9/14)
Nuke nix: California lawmakers have passed legislation mandating the replacement of the Diablo Canyon nuclear plant’s 2.2 GW of capacity with greenhouse-gas-free generation, which the governor is expected to approve. The proposal drew mixed reviews Monday from industry observers regarding its impact on power markets. (9/11)
EV trucks: Walmart Canada plans to power its fleet using 100 percent alternative power by 2028. To meet that goal, the company has announced plans to acquire an additional 30 Tesla 18-wheeler semi-trucks, building on its original order of 10 trucks in November 2017. With 40 Tesla Semis in total, the company will reach an initial milestone to convert 20 percent of its fleet to electric power by 2022. (9/11)
UK supporting EVs: The UK government will support the roll-out of fast-charging networks for electric vehicles, Business Secretary Greg Clark said Tuesday. There is to be a competition for commercial partners to work with the government to provide fast-charging facilities on motorways up and down the country, backed by a GBP400 million ($523 million) investment fund to accelerate the process. (9/11)
Battery-powered train: Bombardier Transportation has introduced a new battery-operated train. This train is the first of its kind to enter passenger operation in Europe in more than 60 years. It does not generate any exhaust and sets the standards for smart mobility with peak values of 90 percent in the areas of efficiency and recyclability. It is also around 50 percent quieter than modern diesel trains. A comparative study shows the battery-operated train clearly has an edge with respect to the total costs across the service life of 30 years. (9/13)
CA commitment: The bill that Governor Jerry Brown signed into law, SB 100, requires the state to reach 100 percent clean electricity in less than 30 years, with interim goals along the way, including 60 percent by 2030. Yet, Governor Brown took an even bolder step, not only signing the legislation but also issuing an executive order calling on the entire economy to become carbon neutral by 2045, not just utilities generating electricity. (9/13)
If Europe’s eight largest oil companies want to meet the climate and carbon-reducing goals they have set, their spending on new, low-carbon energies must double by 2020, and then double again within five years, with total spending seen as ‘monumental’, according to JP Morgan. Currently, Europe’s big oil—Shell, Total, BP, Eni, Equinor, Repsol, OMV, and Galp—spend on average around 5 percent of their capital expenditures on “new energies.” If Europe’s Big Oil were to meet climate goals and not lose credibility as they work toward their goals, they would need to raise the share of the ‘new energy’ spending to 9 percent of capital budgets by 2020, and to 17 percent of capex by 2025. (9/13)
United Airlines has become the first US airline to publicly commit to reducing its own greenhouse gas emissions by 50% by 2050, relative to 2005. The airline will continue expanding the use of more sustainable aviation biofuels, welcoming newer, more fuel-efficient aircraft into its fleet and implementing further operational changes to better conserve fuel. (9/14)
Airline fuel efficiency on transatlantic flights has improved by one percent a year since 2014 as carriers buy modern planes, but a new study says the industry still lags its own climate goals. The industry’s average fuel efficiency improved to 34 passenger kilometers per liter of fuel from 33 between 2014 and 2017 as carriers opted for modern aircraft with lower fuel burn and operated fuller planes. (9/12)
Drought has spread upstream on the Colorado River. The river’s Upper Basin – north of Lake Powell – has been largely insulated from the 19-year drought afflicting the giant watershed, thanks to the region’s relatively small water demand and heavy snows that bury Colorado’s 14,000ft peaks each winter. But this year, several major Colorado River tributaries saw record-low snowpack this winter. As a result, many reservoirs on the west slope of the Rocky Mountains have shrunk to mud puddles. In August, the resort city of Aspen, Colorado, imposed mandatory watering restrictions on its residents and visitors for the first time in its history. (9/15)