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Dear Peak Oil Review Readers:

“As you know, the world runs on finite fossil fuels – but whatever fuels Tom Whipple seems to be infinite. Tom is the chief editor of ASPO-USA’s flagship publications, Peak Oil News and Peak Oil Review, both of which reach subscribers around the world. A task he has tirelessly taken on since 2006. Tom has risen early to work on these publications nearly every day – Peak Oil News on mornings from Monday through Saturdays and work preparing Peak Oil Review on Sundays before its release Monday morning. So it’s wonderful that we can report that Tom is finally taking a few very well-deserved weeks off. The daily Peak Oil News will continue as normal. For this edition of Peak Oil Review, we present an expanded briefs section, a commentary by ASPO-USA Board Member Jeffrey Brown, and a few other surprises. Tom’s column will return as usual on July 9.”

– Ray Long, ASPO-USA Assistant Director

Quote of the week

  • “The sooner we adjust our thinking and focus on this game-changing, transformational solution instead of inconsequential, time-buying policies, the sooner we will attain true and lasting energy security.”

– Gal Luft & Anne Korin

 

The Briefs (clips from recent Peak Oil News dailies are indicated by date and item #)

  • ExxonMobil and Shell have not yet evacuated any personnel from Gulf of Mexico platforms, but the companies are monitoring a weather system that could develop into a tropical storm. (6/23, #13)
  • The natural gas bonanza in the eastern Mediterranean just keeps getting bigger and so do the geopolitical headaches. Israel, whose exploration is the most advanced, is making new strikes. Cyprus is on the cusp of energy riches and Lebanon is hustling to get its act together to launch exploration of its waters. All this has stirred political tensions in the region, exacerbating old rivalries between Israel and Lebanon and between Turkey and Greece, with Syria, Egypt and the Palestinians in the Gaza Strip likely to get dragged in somewhere down the line. Now Russia, seemingly determined to rival Turkish ambitions of regional influence, is getting involved. (6/23, #6)
  • Chesapeake Energy will pay $1.6 million to three Bradford County, Pennsylvania, families to settle allegations that the company’s wells leaked methane into their drinking water wells. Chesapeake admitted no wrongdoing in the settlement, which came while the case was before an arbitration panel Thursday in Philadelphia. Chesapeake has already paid $900,000 in fines to the Pennsylvania Department of Environmental Protection as part of a May 2011 settlement with regulators over a package of gas-migration cases in Bradford County that included the wells in question. According to the 2011 consent order, DEP investigators were able to trace the gas in the Paradise Road water wells back to Chesapeake’s wells in the area and blamed poor well casings. That fine is the largest water contamination fine levied by the DEP. (6/23, #10)
  • Chesapeake Energy Corp has named a new chairman to replace controversial founder Aubrey McClendon. McClendon, who remains CEO and president, was stripped of his chairmanship after a series of corporate governance issues angered investors. The issues include a report that McClendon took a personal loan from a company that was doing business with Chesapeake. In McClendon’s place, Chesapeake appointed Archie Dunham, a former board chairman at ConocoPhillips, as an independent non-executive chairman. (6/21, #13)
  • The U.S. Department of Interior has approved the first utility-scale solar energy project for development on American Indian tribal lands. The 350-megawatt K Road Moapa Solar project will be in Clark County, Nev., about 35 miles north of Las Vegas on tribal trust land of the Moapa Band of Paiute Indians. “This trailblazing project is part of the president’s commitment to help build strong, sustainable tribal communities by supporting safe and responsible renewable energy development,” U.S. Secretary of the Interior Ken Salazar said in a statement. (6/23, #12)
  • President Vladimir Putin asked the chief executives of U.S. and European energy producers to grant Russian companies access to international assets, holding out some of the world’s biggest untapped resources as a prize. Putin is hosting the heads of Royal Dutch Shell Plc (RDSA), ConocoPhillips, BP Plc (BP/) and Eni SpA (ENI) at the St. Petersburg International Economic Forum, using the three-day event to say Russia is one of the most welcoming countries for energy investments. (6/23, #14)
  • Vestas Wind Systems of Denmark has dropped plans to build a UK-based wind turbine factory, dealing a blow to the UK manufacturing sector and government hopes of creating jobs in the renewable energy industry. (6/23, #16)
  • Tesla Motors Inc., the electric-car maker led by entrepreneur Elon Musk, is pinning sales goals for its new Model S sedan on an expanding network of stores, which are modeled on the outlets of Apple Inc. (6/23, #17)
  • The Organization of Petroleum Exporting Countries, which in its heyday could trigger global economic crises by turning off the oil taps, faces an uncertain future as the shale oil revolution transforms the energy business. OPEC’s plight is deepened by a growing confrontation between oil price hawks, like Iran and Algeria, and the so-called doves led by Saudi Arabia, long the dominant member of the cartel, over slumping prices. An emerging alliance between Iran and its traditional rival Iraq, now increasingly under the influence of Tehran following the withdrawal of U.S. forces in December, is also jolting OPEC. (6/22, #4)
  • Norwegian energy company Statoil predicts global energy demand should increase 40 percent by 2040 and demand for fossil fuels should lead the way. “Demand will increase for all types of energy,” Statoil chief economist Klaus Mohn said in a statement. (6/22, #7)
  • Statoil announced it joined an exploration effort to examine shale resource potential in northern Australia. (6/21, #7)
  • Oil from a pipeline bypassing the Strait of Hormuz should be loaded for a first test cargo from the United Arab Emirates by July. Iran in February threatened to close shipping lanes through the Strait of Hormuz in retaliation for sanctions targeting its energy sector. The threat sparked a push to get around the waterway with conventional oil pipelines. The 230-mile Abu Dhabi crude oil pipeline is designed to carry oil from the western deserts of the United Arab Emirates to the port of Fujairah. (6/22, #8)
  • Oil production in Libya has reached 70 percent of the level obtained before the country’s civil war began in February 2011. (6/20, #9)
  • Libya is seeking to boost its oil production by a third to 2 million barrels a day by year-end, surpassing last year’s pre-conflict level. (6/21, #6)
  • China’s imports of crude from Iran rose to the highest level this year even as Western nations stepped up pressure to cut purchases of the commodity from the Persian Gulf nation. China, the world’s second-biggest crude consumer, bought 2.22 million tons of oil from Iran in May. (6/21, #9)
  • The Indian government said it issued a tax exemption for Iranian crude oil imports paid for in part with the national currency, the rupee. (6/20, #14)
  • Japan’s parliament approved government guarantees on insurance for crude oil cargoes from Iran on Wednesday, paving the way for it to become the first of Iran’s big Asian oil buyers to get round new European Union sanctions. (6/20, #15)
  • Prime Minister Yoshihiko Noda ended Japan’s month-long freeze on nuclear power, approving a reactor restart that combined with a tax increase may undermine his political support. (6/20, #16)
  • BP was the high bidder on 43 leases to drill in the central Gulf of Mexico where two years ago its Macondo well exploded, causing the largest U.S. offshore oil spill. The U.S. auction raised $1.7 billion. (6/21, #11)
  • Three large Canadian oil spills over the past 30 days have increased concern over pipeline safety, just as the government and the Canadian petroleum industry are trying to drum up support for a series of new pipeline projects. (6/21, #12)
  • US crude oil supplies rose last week, the government said. Crude supplies grew by 2.9 million barrels, or 0.7 percent, to 387.3 million barrels, which is 6.4 percent above year-ago levels, the Energy Department’s Energy Information Administration said in its weekly report. (6/21, #18)
  • Sweden raised the security alert level at its three nuclear power plants Thursday after explosives were found on a truck at the Ringhals plant Wednesday. A quantity of suspicious material was found by personnel carrying out normal security checks, and police sent a sample of the material by helicopter to a crime laboratory which confirmed that it was explosive. However, the material had no ignition device. Police are treating the incident as a case of suspected sabotage. (6/21, #20)
  • Japan is poised to overtake Germany and Italy to become the world’s second-biggest market for solar power as incentives starting July 1 drive sales for equipment makers from Yingli Green Energy Holdings Co. to Kyocera Corp. (6/20, #4)
  • More auto makers in India are cutting production of gasoline-run vehicles with consumer demand diminishing as the cost of the fuel has risen, adding to ongoing industry concerns about the impact of a slowing economy and higher borrowing costs. (6/20, #12)
  • India and China’s largest oil companies have agreed to jointly explore for oil and natural gas world-wide, in an attempt to put aside a long-standing rivalry and better use their combined financial resources and expertise to secure energy supplies for their fast-growing economies. (6/20, #13)
  • Prices of crucial shale gas byproducts, such as ethane and propane, have tumbled to 10-year lows due to booming output, further hurting the profitability of energy companies such as ExxonMobil and BHP Billiton which are already battling with ultra-low natural gas prices. (6/20, #18)
  • The U.S. Geological Survey has released a new global estimate for potential additions to oil and gas reserves due to reserve growth in discovered fields outside the United States. The USGS estimates that the mean undiscovered, conventional reserve additions in the world total 665 billion barrels of oil (bbo), 1,429 trillion cubic feet (tcf) of natural gas, and 16 billion barrels of natural gas liquids. BP Chief Executive Officer Bob Dudley said at the London presentation of the annual report that emerging economies were putting strains on oil supplies as demand increases. Nevertheless, he said, fears of peak oil were overblown. (6/19, #5) (6/20, #7)
  • The Nigerian subsidiary of Chevron announced it sealed and abandoned a natural gas well damaged in a January rig collapse. (6/19, #12)
  • An energy explorer working in the Gulf of Mexico sued the U.S. government for what it said was the illegal suspension of drilling operations in 2010. Offshore oil and natural gas production company ATP Oil and Gas Corp. sued the U.S. Interior Department in a federal court in Washington. The lawsuit claims the U.S. Interior Department “improperly and illegally” placed a moratorium on offshore drilling activity in the Gulf of Mexico after the 2010 disaster at the Deepwater Horizon rig. (6/19, #14)
  • The U.S. government announced that it approved a plan for an energy company to drill for natural gas in the Uinta Basin in Utah. The Bureau of Land Management approved of a plan by Gasco Energy Inc. to drill close to 1,300 natural gas wells in the region during the next 15 years. (6/19, #15)
  • Enbridge Inc. said it will reverse all of its 240,000-barrel-a-day Line 9 crude oil pipeline from Sarnia, Ontario, to Montreal. “In reversing the flow of one of our existing lines, Line 9, Ontario and Quebec refineries will have access to lower-cost Canadian feedstock,” Enbridge President Al Monaco said in a speech in Toronto. (6/19, #17)
  • Talks on Iran’s nuclear ambitions resumed in Moscow, with a significant gap looming between the two sides’ positions as painful new sanctions are set to come into effect to further isolate Tehran from world oil and banking markets. (6/18, #4, #5)

 

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