Quote of the Week

“The sanctioning of LNG Canada would mark a potential turning point in the LNG market, signaling the industry’s appetite to invest has returned. Even new large-scale greenfield projects are back on the agenda, after a dearth of project financial investment decisions over the last few years.”

Saul Kavonic, Credit Suisse Group AG’s director of Asia energy research

Graphic of the Week


1.   Oil and the Global Economy
2.   The Middle East & North Africa
3.   China
4.   Nigeria
5.   Venezuela
6.   The Briefs

1.   Oil and the Global Economy

Oil prices continue to increase primarily on concerns that the sanctions on Iran and the collapse of Venezuelan production will lead to shortages in the coming year.  Last week London futures, which are more vulnerable to the Iranian situation, climbed by about $2 a barrel to close at $82.78.   London futures are on track for a fifth quarterly advance, a streak not seen since the first half of 2008.  Iranian exports of crude and condensates have declined by 800,000 b/d from April to September, according to the Institute of International Finance.   Analysts expect a reduction of anywhere between 500,000 and 1.5 million b/d in Iranian supply due to the sanctions, with most expecting Saudi Arabia to take the lead in filling any supply gaps.

Last week saw a flurry of stories talking about $100 oil before the year is out.  Bank of America Merrill Lynch even wondered if a 2008-style price spike, when oil reached $147 a barrel, was in the offing.  However, not all observers are getting so excited about the certainty of a price spike.  Barring another unexpected supply outage, the market should ride out the year just fine, according to Goldman Sachs.  “We believe another supply catalyst beyond Iran would likely be needed for prices to meaningfully break to the upside,” Goldman analysts wrote in a note.  “In particular, we continue to expect that production from other OPEC producers and Russia will offset losses out of Iran, as has been the case so far.” Goldman’s sees Brent “stabilizing back into the $70-80 range into year-end.”

The spread between London and NY futures widened during the week’s trading as a steep decline in refinery utilization weighed on US crude oil futures.   Total US refinery capacity dropped by five percentage points to 90.4% during the week ended 21 September and capacity was at its lowest level since early-March 2018.  Lower-than-expected refinery runs are bearish for WTI relative to Brent, and the Brent/WTI spread jumped to $9.81 per barrel following the EIA release.  The spread closed the week at $9.48.  Given a spread of this size, it is difficult to see how foreign oil demand will not empty out US crude stockpiles until the spread shrinks.

The OPEC Production Cut: Last week the financial press was full of stories about an impending OPEC+ production increase to offset the decline in Iranian and Venezuelan exports.   Saudi energy minister al-Falih started the week by rejecting accusations by President Trump that OPEC was keeping oil prices elevated through anti-competitive behavior.  The minister also said Saudi Arabia holds about 1.5 million b/d of spare capacity, which it can tap “within days and weeks” and sustain if needed. “Whatever is needed we will do.  If it’s needed to produce that spare capacity, we will do that.”  The kingdom pumped 10.49 million b/d in August, according to the Platts survey, and has never produced above 10.7 million b/d.

On Tuesday President Trump again took a shot at Saudi Arabia and its refusal to lead an increase in oil production, by telling the UN that OPEC members were “as usual ripping off the rest of the world.”  Trump also attacked Iran in his speech, saying its leaders “sow chaos, death, and destruction,” as he urged other nations to cut imports of Iranian oil to help isolate the regime.  In a rejoinder, Iranian president Rouhani accused the US of actively working to overthrow his government and refused any direct talks with the Trump administration.

By Thursday there were reports that Saudi Arabia and other OPEC members were secretly discussing a half-a-million-barrel increase in their combined oil production to keep a lid on oil prices, amid growing concern that the Iran sanctions will create a severe shortage in global supply.  By week’s end, it was reported that Saudi Aramco is expected to increase production by an additional 550,000 b/d in the fourth quarter.  If production can be increased by 550,000 b/d, it would push Saudi production to new highs above 11 million b/d.  Many are skeptical that the kingdom can produce that much oil on a sustained basis.

US Shale Oil Production: The EIA reported last week that US oil production continues to grow to hit an average of 10.964 million b/d in July to break the output record set the previous month when output averaged 10.695 million b/d.  Production in July was up 1.73 million b/d from July 2017.   Texas again led all states with 4.469 million b/d of output in July, up 46,000 b/d from June and 1.03 million b/d in July 2017.   North Dakota was the second largest producing state at 1.26 million b/d in July, up 41,000 b/d from June and 221,000 b/d from July 2017, EIA said.   Production in federal Gulf of Mexico waters averaged 1.849 million b/d in July, up 189,000 from June and 92,000 from July 2017, according to EIA.

More attention is being paid recently to production in the Bakken which was hit harder than the Permian during the oil market downturn, with rigs and capital rerouted to West Texas.  Oil production from the Bakken hit a temporary peak in late 2014 at 1.26 million b/d, declining for much of the next two years.  However, production began to rise again in early 2017, and the EIA expects Bakken production to hit a new record of 1.33 million b/d in October.

Part of this revival is due to problems in expanding production in the Permian Basin with its pipeline bottleneck, the strain on rigs and equipment, completion services, labor, water and even road traffic is causing problems for shale drillers.  Some drillers have decided to shift resources to more profitable locations, and the Bakken has received a boost as a result.

However, while production from the Bakken is still increasing, drillers are being pushed away from the “sweet spots” to less productive locations.  The result is that the average well in the Bakken is producing less oil at its peak performance as fringe areas are dragging down the average.  There is evidence that while the so-called new production techniques such as drilling much longer wells and using more sand can increase initial production, some doubt that despite the higher costs of drilling the new wells, they will produce much more oil overall.

A recent report from the North Dakota government acknowledged that the state is running out of new places to drill in its “sweet spots” but says that doubling the drilling can offset any decline brought about by new wells being less productive.  In another two or three years we should know more about the future of the Bakken and other shale oil basins.

2.   The Middle East & North Africa

Iran: As November approaches the war of words between Washington and Tehran increases, further reducing the likelihood of a compromise or negotiations.  Last week President Rouhani said Iran was ready to confront the United States and its Gulf Arab allies, a day after an attack on an Iranian military parade killed 25 people, including 12 members of the elite Revolutionary Guards.  Rouhani accused US-backed Gulf Arab states of providing financial and military support for anti-government ethnic Arab groups in Iran.

There are more indications that the sanctions will reduce Iran’s oil exports significantly in the coming winter.  The most unexpected news of the week was that China’s top refiner Sinopec, bowing to pressure from the US, is halving its oil imports from Iran as of September.  Analysts say Iranian exports to China would be reduced by about 130,000 b/d.  This would be 20 percent of China’s average daily imports from Iran in 2017.  India’s situation as a buyer of Iranian crude is confused at the minute.  Bloomberg is reporting that Indian refiners will not buy any Iranian oil in November, while Reuters is quoting a government official as saying New Delhi has not told refiners to stop buying Iranian oil.

Japan and South Korea have already reduced their imports while Europe is in a dilemma.  The EU does not want Iran to resume work on nuclear weapons for fear that it will lead to increased tensions and hostilities in the Middle East.  Last week, the European Union announced a decision to launch a “special purpose vehicle” with the mission of helping Iran blunt the impact of US sanctions.  Iran is still in compliance with its obligations under the 2015 nuclear deal, according to the International Atomic Energy Agency, and the signatories to the agreement – aside from the US – remain firmly in the agreement.

The pressure of reduced oil exports is starting to be felt in Iran.  Oil truck drivers in Iran have launched a new strike demanding improved working conditions, and the strike has resulted in large lines forming at gasoline stations.  At least ten Iranian oil supertankers have turned off their tracking beacons suggesting that Tehran is trying to conceal its crude oil shipments.  If Iran is deploying this tactic, tanker tracking data of Iranian oil exports may become less and less reliable as the starting date for the US sanctions approaches.

Iraq: Baghdad depends on Iran for more than one-third of its power generation and is negotiating with the US for exemptions from the impending snap-back of sanctions against Iran, arguing that it could not cut consumption of Iranian electricity and natural gas immediately without suffering economic harm and social instability.

Iraq’s oil ministry said Thursday that production from the northern Qayarah oil field, which until last year was shut-in during the war, currently is 30,000 b/d and it is planning to double it by year-end.  The ministry also said crude from this field was being exported for the first time by Iraq’s State Oil Marketing Organization.  Previously the crude from this field would go solely to the nearby Qayarah refinery operated by North Refineries Company, due to both proximity and a lack of viable alternatives.

Outside of fortified urban centers in northern Iraq, insurgents have prevented resettlement in rural areas and are now causing residents to flee from villages previously considered safe.  One year after the liberation of Mosul, the Islamic State’s escalating insurgency is preventing resettlement throughout much of northern Iraq – and is now driving residents away from areas that were previously considered safe.

A restructuring of Iraq’s oil sector appears to be delayed and derailed by a legal challenge.  Under the current law, which took effect in April, the government had only a six-month window to set up the new state company, which is supposed to take over many of the Oil Ministry’s most important powers in managing Iraq’s oil and gas resources.

On Friday the State Department announced it is evacuating all non-essential personnel from the US consulate in Basra.  The move comes after a month of heavy anti-Iran and anti-Iraqi government protests that have gripped the southern city, which has led to sectarian rioting and the burning of Shia militia buildings as well as the torching of the Iranian consulate early last month.  During the first week of September, the US embassy in Baghdad’s green zone also came under attack by mortar fire, which US officials and military analysts blamed on Iran-backed militias.

Saudi Arabia: The kingdom says it can pump 1.5 million b/d above its current output of some 10.4 million.   However, many market watchers are skeptical that Saudi Arabia has the full amount of its claimed spare capacity actually available, casting doubt on whether OPEC’s largest producer can prevent a price spike from a supply shortage.  Saudi Arabia has never produced above 10.7 million b/d.  This skepticism may be tested soon as Reuters is reporting that Saudi Aramco is expected to increase production by 550,000 b/d in the fourth quarter.

Aramco has signed a long-term deal with Zhejiang Rongsheng to supply crude to the Chinese company’s new refinery in eastern China, a source with knowledge of the matter said on Wednesday.  The volume and grades to be supplied were not available.  Rongsheng International Trading Co has already bought spot Omani crude ahead of the new 400,000 b/d refinery’s start-up in late 2018.

Libya: Crude oil production has hit a five-year high of 1.28 million b/d, but further gains will depend on stabilizing security and attracting foreign investment, according to the chairman of state-owned National Oil Corporation.  Over the past few months, Libya’s oil production has seen wide fluctuations as a result of attacks and blockades on oil facilities that have frequently shut-in oil production and exports.  Two weeks ago, members of the Petroleum Facilities Guard blocked the airfield of the Wafaa oil field in southwestern Libya, attempting to blackmail the operator of the field into awarding an unwarranted catering contract.  The runway was reopened after one day, with no production affected.  This latest incident at a Libyan oil field, however, highlights the fragile state of the oil industry.

The country could lift production by “hundreds of thousands” of barrels of oil per day, security permitting, according to the head of the national oil company.  However, the security situation remains uncertain, which could prompt the National Oil Corporation to revise down its production target of 2 million b/d in 2022.   Talks with several international oil companies regarding increasing production, staffing, and investment across the country were progressing, he added.  The chairman said he recently visited Spain to meet officials at Repsol, a key partner in the 340,000 b/d Sharara field, Libya’s largest oil field.   In March, French oil major Total said it would increase its presence in Libya by taking a 16.33% stake in the Waha concessions from Marathon Petroleum for $450 million.

3.   China

Many analysts are warning that the US/China trade war will affect oil demand as it affects economic growth in China.   However, the major official oil demand forecasts have yet to react to the possibility of a major economic slowdown.   OPEC’s latest Monthly Oil Market Report lowered the cartel’s estimates for oil demand increase in 2019 down by only 20,000 b/d to 1.41 million b/d.   The IEA has left its 2019 demand forecast unchanged at 1.5 million b/d, up from this year’s projected 1.4 million b/d.  The agency did note, however, that demand could be stronger were it not for the trade war and signs of stalling economic growth in emerging economies.

Unipec President Chen Bo told the annual Asia Pacific Petroleum Conference that world oil demand would peak at 104.4 million b/d in the mid-2030s, up from just below 100 million b/d currently, as new technologies replace the use of oil.  Unipec is the trading arm of Asia’s largest refiner Sinopec.  Chen told the conference that “2018-2035 will be the last cycle of global refining capacity expansion.  After 2035, it is difficult to see large-scale refining projects in construction, except for some small upgrade projects and petrochemical projects.”   Chen also noted that despite the trade dispute, US crude supply, which reached 300,000 b/d in the first half, was an important new source for Chinese refiners as it allowed diversification from the Middle East and African crudes.

4.  Nigeria

When he became president in 2015, Muhammadu Buhari appointed himself oil minister and vowed to end the fuel shortages, the result of an inefficient and graft-riddled fuel subsidy scheme.   But raising the price of fuel at the pump turned out to be politically explosive, so he agreed to compromise.   He cut out the fuel marketers, effectively making the state-run Nigerian National Petroleum Corporation (NNPC) the sole importer of fuel.  Supporters say the strategy is fortifying the country against future shortages, but opponents believe it makes the NNPC more opaque and more susceptible to graft.

As the February 2019 elections approach, questions are being asked about the government’s management of oil sales and earnings.   The expensive fuel subsidy scheme has been described as a sprawling web of patronage and mismanagement, a microcosm of the dysfunction in modern Nigeria.   Despite being Africa’s largest oil producer, producing some two million b/d, Nigeria doesn’t have fully working refineries and actually imports the bulk of its fuel.  The fuel is sold at a subsidized rate of around $0.40 per liter – half the price in neighboring Benin.  Cheap fuel may keep voters happy, but marketers have first overcharged the state for fuel, then turned around to sell the cut-rate petrol at a profit to neighboring countries.

Royal Dutch Shell, the company which pioneered Nigeria’s oil industry in the 1950s, is not making much progress in refocusing on oil and gas fields far offshore.  Offshore platforms would keep the company away from the theft, spills, corruption, and unrest that have plagued the country’s onshore industry for decades.   While Shell has cut onshore oil production and sold some onshore assets, it continues to invest in others.  In fact, onshore production has risen in recent years as a share of Shell’s output in Nigeria, an analysis of company data over the past decade shows.   Much of the increase comes from the increased production of natural gas, mainly used in power generation.  Natural gas made up 70 percent of onshore production in 2017, up from 47 percent in 2008.

5.  Venezuela

The Trump administration has sent Caracas hints lately that they are open to a military coup in Venezuela to oust President Maduro.  “It’s a regime that frankly could be toppled very quickly by the military if the military decides to do that,” President Trump told reporters on the sidelines of the UN General Assembly last Tuesday.   The President’s words offer encouragement for a coup, which may not come as a surprise because the New York Times published a story in early September that found that the Trump administration met secretly with Venezuelan military officers over the last year to discuss an overthrow of Maduro.

The US is considering putting more pressure on Nicolas Maduro’s regime in Venezuela, Secretary of State Pompeo recently said, and some analysts speculate that the increased pressure may include a ban on US exports of light oil which Venezuela uses to dilute its extra-heavy crude to move it to pipelines for exports.  Such a move would reduce Venezuela’s oil exports dramatically and lead to its complete collapse.

“I think you’ll see in the coming days a series of actions that continue to increase the pressure level against the Venezuelan leadership – folks who are working directly against the best interests of the Venezuelan people,” Secretary Pompeo said in an interview with Fox News last week.

6.   The Briefs (date of an article in Peak Oil News is in parentheses)

Schlumberger seems to be on the brink of concluding a deal with Russia by buying into Moscow’s largest onshore drilling firm Eurasia Drilling Company.  The deal would give Schlumberger secure access to a massive market irrespective of political tensions and give the Russian firm access to western drilling technologies.   Moscow says the deal with Schlumberger depends on the US firm granting its rights on a part of its technologies to a new Russian entity in case it decides to leave the country spurred by further US sanctions.  (09/26)

OPEC projects that, in the period to 2040, the required global oil sector investment is estimated at $11 trillion. That’s according to the latest OPEC World Oil Outlook report. The report outlines that total required upstream capital expenditure related to oil amounts to $8.3 trillion. (9/25)

High-sulfur fuel oil (HSFO), the leftovers of an oil refiner’s output, will still flow from refineries around the world even after new rules startup in 2020 curtailing its use in the global shipping fleet, a Reuters survey showed.  Sixty percent of the 33 refineries contacted by Reuters in a global survey will still produce HSFO in 2020 although the supply will tighten as 70 percent of these refiners plan to reduce their output. (9/28)

OPEC reports that this year, demand growth for world oil is estimated at 1.6 million b/d, which will slow down to 1.4 million b/d in 2019 but then rebound to 1.7 million b/d in 2020 after the introduction of the new rules that will cap the sulfur content of bunker fuel at 0.5 percent from the current 3.5 percent. (9/25)

French-based Total expects its deepwater oil and gas production to grow by more than 40 percent to around 500,000 b/d of oil equivalent by 2025 on the back of new projects offshore Brazil and in the Gulf of Mexico and sees supportive market conditions for approving new developments. (9/26)

In the North Sea, French oil and energy group Total said on Monday it had made a major gas discovery on the Glendronach prospect, located off the coast of the Shetland islands.  Total said preliminary tests on the new gas discovery confirmed good reservoir quality, permeability, and well production deliverability, with recoverable resources estimated at about one trillion cubic feet. (9/24)

In Russia, the Sakhalin-1 consortium, led by ExxonMobil, has agreed to pay Russian energy giant Rosneft $230 million in an out-of-court settlement of an oil production dispute, an executive of an Indian consortium partner said on Friday. Rosneft had filed a $1.4 billion lawsuit in the Sakhalin district arbitration court in Russia’s far east, accusing the consortium of unjust enrichment, an allegation the consortium denied. The dispute centered around how oil should be shared between the Sakhalin-1 concession and an adjacent Rosneft field. (9/29)

Qatar’s new export capacity, with projects to be completed in 2024, is expected to bring in billions of dollars more to the state coffers of the tiny gas-rich country, which is isolated by its Arab neighbors in a bitter feud in the Persian Gulf that has gone on for more than a year now. Qatar’s plans to expand even more the previously announced expansion come at a time in which competing LNG projects from the US to Australia to Russia will add to the global LNG supply over the next few years. The announcement for the expansion also coincides with a massive surge in LNG imports in China, which is pushing for a coal-to-natural gas switch across the country in efforts to fight air pollution. (9/28)

India will soon start looking for investors in the second phase of its strategic petroleum reserve, a senior executive of the company managing the reserve told Reuters. The second phase will cost an estimated US$2 billion.  India already has two strategic petroleum reserve facilities with a modest capacity: 20.52 million barrels, or 2.8 million tons. The two additional facilities will bring the total to a little over 68 million barrels. (9/27)

In Brazil, Royal Dutch Shell and Chevron on Friday led big bets by oil majors seeking to clinch key stakes in the nation’s coveted offshore oil play, shrugging off concerns over presidential elections that have cast a pall of uncertainty over the industry.  By placing all four blocks, Brazil’s cash-strapped government raked in 6.82 billion reais ($1.71 billion), days ahead of the most uncertain presidential vote in a generation, as oil companies scrambled to take advantage of what could be the last oil auction in years. (9/29)

Mexico’s Pemex plans to start importing up to 100,000 barrels of light crude daily, ending decades of oil self-sufficiency as declining domestic production meets rising energy demand. (9/28)

Mexico will need to double to about $4 billion its annual oil exploration investment to reverse a 14-year decline in output, a move that will require more funding by Pemex and private producers.  Pemex this year expects to invest about $1.65 billion, roughly the same as 2017.  Reserves fell 7 percent this year. (9/29)

Canada: The next LNG investment cycle may be primed for a liftoff.  Royal Dutch Shell Plc and its partners are set to announce a final investment decision on their C$40 billion ($31 billion) liquefied natural gas terminal in western Canada as early as next week.  LNG Canada’s decision was put off twice in 2016, but the outlook for LNG has brightened. Demand is expected to grow rapidly due to an uptick in consumption from Asian nations, led by China. (9/28)

The US oil rig count declined by three last week to 863 while the natural gas rig count increased by four to 191, Baker Hughes reported.  For the third quarter, the increase of five oil rigs was the smallest since drillers cut three oil rigs in the fourth quarter of 2017. They added 50 rigs in the first quarter and 61 rigs in the second quarter of 2018. (9/29)

No use of SPR: The administration is not considering any release from the US emergency oil stockpile to offset the impact of looming Iran sanctions, and will rely on big global producers to keep the market stable instead, Energy Secretary Rick Perry said on Wednesday. (9/27)

GOM lease: The Trump administration this March will again offer 78 million acres in the Gulf of Mexico for oil and gas leasing, the Interior Department announced Tuesday. The lease sale will include all available unleased areas in the Gulf’s federal waters, the agency said. It does not include eastern Gulf waters currently under congressional moratorium. (9/26)

Offshore rules eased: The latest step taken by the Trump administration in supporting the energy industry has been the relaxation of safety rules for offshore oil and gas production, put in place following the Deepwater Horizon disaster caused by BP in 2010.  The Deepwater Horizon platform exploded in April 2010, resulting in 11 casualties, many injured and the worst marine environmental disaster in the history of US oil, with 5 million barrels leaking into the Gulf of Mexico.  The disaster cost BP around US$65 billion in settlements and compensation. (9/29)

Fracking study: A comprehensive study of groundwater quality in the Ohio Middle Ordovician Utica Shale hydraulic fracturing play provides new evidence that “fracking” operations are safe to nearby water sources. The study found that methane concentrations in the studied water supply did not increase over a period of four years, and the methane present was from plants, not fossil fuels — even while more than two thousand new horizontal wells were drilled in the region. (9/29)

VMT stagnant: The volume of traffic on US highways has stopped growing, and with it gasoline consumption, as rising prices curb driving behavior. Traffic volumes in July were 0.3 percent lower than a year earlier. Traffic growth has been negative in two months so far this year, the first readings below zero since the start of 2014. Volumes were up by less than 0.3 percent in the three months from May to July compared with the same period a year earlier, down from annual growth of 2-3 percent throughout 2015 and 2016. (9/26)

Nuke troubles: If the partners fail to reach a deal to save the Vogtle expansion, there will be no new nuclear plants under construction in the U.S., a situation that worries some politicians. A similar political fracas has broken out in South Carolina after two utilities decided last year to stop building the only other nuclear plant under construction in the US.  The decision has unleashed months of rancor, as neither shareholders nor electric customers wanted to be left with a nearly $5-billion bill for an unfinished nuclear power plant. (9/26)

Coal fading: Despite political support from the White House, US coal consumption continues to fall, as power producers shutter coal-fired units in favor of cheaper and more flexible natural gas as well as solar and wind.  US power producers generated almost 6 percent less electricity from coal in the first half of the year even as total generation rose almost 5 percent and gas-fired generation was up 17 percent. (9/27)

Tesla will release its biggest software update in two years by the end of the week, chief executive Elon Musk said in a tweet in response to a Tesla owner’s question. In addition to it being the biggest update since 2016, it will feature substantial improvements to the Tesla Autopilot system. (9/27)

The world’s first autonomous tram was launched in unspectacular style in the city of Potsdam, west of Berlin, on Friday. (9/25)

EU battery storage: Groupe Renault is launching its “Advanced Battery Storage” program, which aims to build the biggest energy stationary storage system using EV batteries yet designed in Europe by 2020 (power: 70 MW / energy: 60MWh). It will have a storage capacity of at least 60 MWh, making it the biggest system of its kind ever built in Europe. The first facilities will be developed in early 2019 on three sites in France and Germany. (9/26)

Better battery? On Wednesday, an energy company headed by the California billionaire Patrick Soon-Shiong announced that it had developed a rechargeable battery operating on zinc and air that can store power at far less than the cost of lithium-ion batteries. Tests of the zinc energy-storage systems have helped power villages in Africa and Asia as well as cellphone towers in the US for the last six years, without any backup from utilities or the electric grid, Dr. Soon-Shiong said. (9/28)

At Hurricane Florence’s peak of intensity on September 10, its winds roared to 130 mph. But as the Category 4 storm approached the Carolinas, those gusts weakened. When it made landfall, it had been downgraded to a less-threatening-sounding Category 1. That led some Carolinians to cancel their evacuation plans. Problem is, the storm had only gotten more dangerous as its category plummeted. That’s because the deadliest threat from a hurricane is not its wind speed, but the water it brings. Rising coastal waters and flooding from heavy rainfall cause more than 80 percent of hurricane-related deaths. (9/28)

Seismic surveys involve an underwater air gun pulled behind a boat and fired at intervals, and as the shock waves bounce off the sea floor and return to sensors, they help reveal where oil and gas might be.  In Australia, researchers recently released results of a study of the impacts of seismic surveys on sea life.  Those results, published in the Nature journal Ecology and Evolution, show there was a two to three-fold increase in the number of dead zooplanktons at a distance of at least 1.2 kilometers (about three-quarters of a mile) from the air gun after the blasts. That is much farther than previous reports of impacts out to only 10 meters or so (roughly 33 feet). Two major US oil and gas industry groups have been writing to regulators describing marine scientist Robert McCauley’s findings as “seriously flawed” while commissioning other unnamed experts who have also criticized the study. (9/27)