Quote of the Week

“To outward appearances, the US oil and gas industry is in the midst of a decade-long boom. [However] America’s fracking boom has been a world-class [financial] bust …. Even after two and a half years of rising oil prices and growing expectations for improved financial results, a review of 33 publicly traded oil and gas fracking companies shows the companies posting $3.9 billion in negative free cash flows through June.”

Report from Institute for Energy Economics and Financial Analysis, and the Sightline Institute

Graphic of the Week


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 fell by nearly 3 percent last week to settle at $77.62 in London and $67.59 in New York. This was the third weekly decline in a row that has taken prices down by about $10 a barrel since early October. As has been the case for several months, prices fall on reports of excess supply or the possibility of lower demand and increase on concerns about what the Iran sanctions due to begin next week will do to supplies.

The 2018 US midterm elections will determine the balance of power over policies affecting the gas and electric sectors across the country, with Republican control hanging in the balance in multiple statewide races as well as in Congress. Initiatives impacting the gas and power sectors include a Washington state carbon fee proposal, a Colorado initiative that would curb fracking, and proposed renewable portfolio standards in Nevada and Arizona are on the ballot.

The idea that there is trouble ahead for the oil industry is slowly making its way across the financial press and the various consultancies that pontificate about the future of the oil industry. Most focus on the lack of investment in finding new oil since the price downturn three years ago although some question just how long the US shale oil industry can lose billions and still receive financial support from Wall Street.

Last week, energy consultancy Wood Mackenzie noted that despite some increase in global spending on oil and gas development, the recovery in capital spending is much slower and shallower than in previous cycles, with current investment levels insufficient to meet future demand growth. Wood Mackenzie says spending on development is expected to rise by 5 percent in 2018, following a 2-percent increase last year. They believe that oil and gas development expenditures will need to grow by around 20 percent to meet future demand growth and make sure that oil and gas firms will sustain their production in the next decade.

It currently appears that capital spending will climb to just above $500 billion in the early 2020s from a low of $460 billion in 2016 but far below the $750 billion peak in 2014, according to the consultancy. WoodMac estimates that annual development expenditure has to rise to around $600 billion to meet future demand for oil and gas through the next decade. However, it doesn’t expect the industry to boost investments significantly.

Wood Mackenzie’s call for another $100 billion or so in annual spending on finding new oil is rather mild in comparison with OPEC and the IEA who have been calling for additional trillions.

OPEC: Last week Saudi Arabia and Russia agreed to form a permanent partnership that would last indefinitely, potentially marking a new era for the oil market.  Saudi oil minister Khalid al-Falih said that he hopes to set up an official OPEC+ governing body, including a Secretariat, likely to be based in Vienna. The proposal could be formalized next month. To date, OPEC+ has been a somewhat informal group, or at least a provisional one, intended to address the supply glut that emerged following the 2014-2016 market bust.

This agreement will lead to a far more potent version of OPEC for it brings together the two major oil exporting blocs – Russia and its satellites in the former Soviet Union and the Saudis who have a significant influence over the other Gulf Arabs. In effect the OPEC cartel, which has been a major player in the oil markets since for the last 50 years, seems likely to be supplanted by a two-country organization in which agreement on policies seems much easier to obtain.

For years, the Saudis have been struggling with more than a dozen smaller oil producers to build consensuses preferring a co-presidency with Russia. When asked about who will be the driving force behind establishing a formalized OPEC+ Secretariat, Saudi oil minister Khalid al-Falih said: “I think Russia will have to take the leadership.”

OPEC signaled last Thursday it might have to return to oil production cuts as global inventories rise.  An OPEC and the non-OPEC ministerial panel concluded that supply is “very comfortable” compared to demand and warned producers might need a change of tack because of rising inventories and economic uncertainties. Lower production and higher prices will likely sour relations with President Trump who has repeatedly attacked OPEC for not supplying enough oil.

US Shale Oil Production: Last week saw a spate of articles questioning the long-term viability of the US shale oil industry, which has been the major contributor to the growth of global oil production for the last ten years.  On Friday, the Wall Street Journal opined, “While this [shale oil] has helped the world meet rising demand for years, it cannot go on forever. Signs are mounting that shale won’t keep growing at the same rate in the US.  Drillers face pipeline bottlenecks moving crude out of West Texas.  This week, Halliburton Co. Chief Executive Jeff Miller said its oil-producing clients were facing ‘budget exhaustion’ and he expected some to take extended breaks from drilling new shale wells.  That is coinciding with warnings of plateauing, or even declining, production elsewhere in the world.”

“For years, shale helped keep enough spare capacity in global markets that volatility began to feel like a relic of the past. In the years to come, the world may no longer have that shale shock absorber, ending a relatively peaceful decade in oil markets.”

One of the harshest criticisms of the shale oil industry came last week in the form of a lengthy analysis from SRSrocco Report.  The analysis says that the industry is nothing but a giant “Ponzi Scheme” alluding to the fact that the industry as a whole is not profitable and relies on constant injections of new capital in the form of equity shares and loans to keep functioning.  The report notes that all the “new technology” the industry has been using to boost production in recent years is costly and is not paying for itself.

More problems for the shale oil industry continue to arise. Rigzone notes the game plan for cashing in on the US shale boom is shifting from quick flips to long-term commitments, according to one veteran energy investor. Fewer shale oil drillers can sell their money-losing properties to larger firms just because they have started drilling.  One observer of the industry noted that “investors may now need to stick around for a decade of drilling and development before companies reach ‘full value.’”

Another problem for the shale oil industry that came in for comment last week was that the amount of water used per well jumped as much as 770 percent between 2011 and 2016.  A new study published Wednesday in the peer-reviewed journal Science Advances says that in addition to the increased use of water, wastewater production in each well’s first year increased up to 15-fold during the same years. An observer of the industry comments that the numbers that they project are not sustainable. Something will have to happen if we want to keep the oil and gas production at the level they assume will happen in 10 or 15 years.”

The relatively light density of US shale oil is becoming a problem. Shale oil is closer to condensate in its API density and is unsuitable for making several of the heavier oil products such as diesel and jet fuel unless it is blended with heavier imported crude. Market observers are beginning to note that US refiners may very soon find themselves struggling with excess production of gasoline that exceeds demand for the fuel.  Middle distillates are the oil products that everyone is forecasting will drive demand for crude in the coming years.

Another interesting twist to the shale oil business is the $10 differential between the global price for crude which is currently at $77 a barrel and the domestic price which is $67. US shale oil producers, especially in the Permian Basin are looking for ways to get world prices for the oil that is being exported rather than the much lower prices obtaining in the US market.

2.  The Middle East & North Africa

Iran: With the US sanctions on Tehran due to begin next week, there has been much discussion about their efficacy and whether the US will be handing out waivers to selected countries. US Treasury Secretary Mnuchin told Reuters that countries importing Iranian crude that want to continue importing it would need to reduce their intake of Iranian crude by more than 20 percent to win a sanction waiver. Others are warning that there may not be any waivers and that Iranian oil exports will fall by more the million or so b/d that the conventional wisdom is saying.

For the past month, there has been a steady stream of reports that several of Iran’s customers have already stopped buying Iranian crude. Reuters is saying that China’s largest refiners, Sinopec and the China National Petroleum Corporation, haven’t booked any crude oil cargoes from Iran for November due to fears of breaching the US sanctions.

While the major oil flow reporting agencies are reporting lower Iranian exports, there are occasional reports that Tehran is finding ways around the sanctions by using secret tanker runs to straw purchasers and being paid through barter and other irregular financial transactions.  The Iranian government is saying that their exports are holding up and Moscow is talking about how much damage the sanctions will do to the European economy.

Iraq:  Prime Minister-designate Adel Abdul-Mahdi named part of his new cabinet last Wednesday, confirming Thamir Ghadhban as Iraq’s new oil minister and deputy prime minister for energy affairs, and Luay al-Khateeb as the new electricity minister.  The 73-years-old, Ghadhban became a field and reservoir engineer in 1973 and moved up the ranks until 2003 when, after the US-led invasion, he was named the head of the ministry by the Americans.  He is seen as a capable technocrat, well-respected within Iraq and by the dozens of foreign oil companies operating in the sector.

Former Oil Minister al-Luaibi told the press last week Iraq currently is producing 4.7 million b/d and wants to increase this to 7 million b/d and to reach 8 million by 2025.  Luaibi said Iraq hoped to export 1 million b/d through Jordan’s Akaba port, without specifying a timeline. The burning of gas produced as a byproduct of oil extraction would stop by 2021, he said. He added that the northern refinery of Baiji is back online and processing 70,000 b/d. Newly appointed Oil Minister Thamer Ghadhban seconded the words of the outgoing minister in an email saying that Iraq will proceed with plans to increase oil and gas production.

A recent IEA report notes that one of the biggest uncertainties for oil development in Iraq is the lack of progress on projects to supply water for injection into aging oil fields. The Common Seawater Supply Project that was initially planned to be in operation by 2013 has yet to make any real progress, the IEA said, and without additional water injection, Iraq could reach a ceiling in production “well below” the 7 million b/d mark.

Saudi Arabia: The implications of the Khashoggi affair for Saudi Arabia’s future is still up in the air. The government announced that Saudi Arabia has no intention of unleashing a 1973-style oil embargo on Western consumers and will isolate oil from politics. This announcement was to counter a Saudi newspaper story that said the kingdom would retaliate for any sanctions emanating from the Khashoggi murder by cutting oil shipments.

Numerous international business and political leaders withdrew from Saudi Arabia’s Future Investment Initiative conference over the death of Jamal Khashoggi last week. Reporters at the conference described the mood as “somber”, and most of those attending were from Saudi Arabia and other Gulf countries. Despite the absence of most of the top executives from international banks and investment companies, there were still plenty of lower-level bankers working to build relationships and plan for future deals. There were even some announcements of investment agreements.  These deals were largely in the oil and related industries, so they will not do much to diversify the kingdom’s economy.

Saudi Arabia would likely carry out an initial public offering for Saudi Aramco in 2021 after it builds up some downstream assets including petrochemical production, Khalid Al-Falih, the country’s energy minister, said last week. While Aramco is the world’s largest company in the upstream, with a production of about 14 million barrels of oil equivalent per day, the downstream refining and petrochemical industries need development.

Libya:  Libya’s oil production could rise by several hundred thousand b/d when BP and Eni resume production at a shared field, the head of the country’s state oil company, Mustafa Sanalla, told Bloomberg.  Sanalla said Libya’s current oil production was more than 1 million b/d “despite local security challenges.”  BP and Eni will begin exploratory drilling in Libya in the first quarter of next year, BP’s chief executive Bob Dudley told Reuters.  BP has 85 percent in an offshore oil and gas block in the North African country, and earlier this year the Italian major struck a deal with BP to buy half of it.

Libya held a rare oil conference in the eastern city of Benghazi last Wednesday as its state oil firm NOC reached out to a region home to a parallel government backing a rival oil firm. This was the first international business conference in Libya’s second-largest city since 2014 when it turned into a battlefield.  Forces of Khalifa Haftar declared victory in July 2017 over Islamists, ending four years of fighting that destroyed parts of the city.  Hotels and Benghazi airport have reopened, but bombings killed dozens of people this year, forcing organizers to postpone the conference until security had improved.

3.  China

Concerns about China’s economy still dominate the news. After a nearly 7 percent selloff so far this year, the yuan is at the brink of hitting 7 per dollar—a symbolic threshold that could spark further selling.  The yuan last traded below 7 per dollar during the recession in May 2008. The yuan’s decline against the dollar is symptomatic of the diverging directions of each country’s economy and monetary policy. China said last week that its GDP rose by 6.5 percent in the third quarter, the slowest since 2009. In the U.S., GDP growth hit a near four-year high in the second quarter.

Despite an unprecedented surge of investment in alternative energies, together with caps on coal use and the establishment of “no-coal zones” throughout the country, China’s overall consumption and production are again rising. When the US pulled out of the Paris climate accord last year, China reaffirmed its commitments to tackle the problem of coal, by far the biggest source of its climate-warming carbon emissions.  China has made efforts to cut the share of coal in total energy use, with the figure expected to drop to 58 percent by 2020, down more than ten percentage points in a decade. It has also already met a 2020 target to cut the amount of carbon dioxide it emits per unit of growth.

However, the absolute volumes of both coal and CO2 remain by far the world’s highest and are still set to rise. Though some studies have suggested total CO2 emissions peaked at 9.53 gigatons in 2013, well ahead of its official target of “around 2030”, environmental group Greenpeace says they could reach a new high this year or next. Coal production has also risen 5.1 percent in the first three-quarters of this year to 2.59 billion tons.  Steel output from China, the world’s top producer, and consumer rose to 80.8 million tons last month, up 7.5 percent from September 2017.

China’s Hebei province announced that it would ensure sufficient supplies of clean coal during the next three winters to avoid heating fuel shortages and reduce toxic air emissions.  Several regions of China encountered fuel shortages last winter as Beijing pushed to switch millions of households to natural gas from coal as part of its anti-pollution campaign, leaving many thousands of homes without heat. In August this year, Chinese Vice Premier Han Zheng urged authorities to be “realistic” in their winter anti-pollution campaign, and “steadily promote clean winter heating in Northern China and ensure people are safe and warm.”

4. Russia

Russian authorities have announced that domestic oil production hit 11.36 million b/d in September.  This number marks a new peak, reached despite the poor shape of the Russian economy, the negative impact of Western sanctions, and the restrictions self-imposed on Moscow by the 2016 deal with OPEC.   Current Russian production, though a record, is only 1.7 percent abo­ve the levels of 1989, the most successful year for the Soviet oil and gas industry.

Russia is well placed to maintain oil production levels above 10 million b/d beyond the next decade, despite western sanctions limiting its access to technology and capital, the International Energy Agency said last Thursday.  Aided by favorable exchange rates which allowed consistent capital spending through the oil price downturn, Russia aims to halt declines and improve recovery at its major producing fields Western Siberia and the Volga-Urals basin, the IEA noted in a new long-term outlook.  As a result, the IEA said it now expects Russian oil production to remain above 10 million b/d into the 2030s before a gradual decline to 9.4 million b/d in 2040.

Russia produces little beyond oil and gas, forest products minerals, wheat and weapons that can be exported.  As a result, maintaining and building its oil and gas industry will be Moscow’s top priority in the coming years.

While US legislators are discussing new sanctions on Russia that would increase economic pressure on Moscow by possibly expanding sanctions to the banking and energy industries, Russia is said to be in talks with ExxonMobil over new oil and gas projects currently beyond the scope of the sanctions. Russia’s discussions with Exxon could potentially lead to increased cooperation with state-owned Rosneft, the country’s biggest oil producer.

5. Venezuela

Two weeks ago, the Washington Post ran a story about how Venezuela’s many foreign creditors are eyeing one of the country’s most valuable assets: Citgo, the Houston-based oil company that it has owned since 1990. If Citgo is ever seized and sold to pay Venezuela’s debts, it could disrupt one of the most reliable sources of cash for a country already reeling from hyperinflation, food and medicine shortages, and a population exodus.  However, last week it was reported that although Caracas is regularly delaying or avoiding bond payments and is behind on billions of dollars in such payments, it is preparing to make a rare $949-million payment on one bond, because that bond is backed by a stake in its key asset, Citgo.

It was also revealed last week that ConocoPhillips said in its third-quarter earnings report that it received a $345 million payment from the Venezuelan state oil company and that another payment of $500 million will come later this year.  Venezuela’s former President Hugo Chavez expropriated assets of ConocoPhillips in 2007 in the Hamaca and Petrozuata heavy crude oil projects.  In April 2018, the ICC tribunal awarded ConocoPhillips approximately $2 billion arising out of PDVSA’s failure to uphold its contractual commitments.

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

World oil balance shifting: While the US shale oil boom has helped the world meet rising demand for years, it cannot go on forever. Signs are mounting that shale won’t keep growing at the same rate in the US Drillers face pipeline bottlenecks moving crude out of West Texas. This week, Halliburton Chief Executive Miller said its oil-producing clients were facing “budget exhaustion” and he expected some to take extended breaks from drilling new shale wells. That is coinciding with warnings of plateauing, or even declining, production elsewhere in the world. All the while, global economic growth has been strong for several quarters and oil demand continues to grow. Since its last year-over-year decline at the end of 2011, oil demand has grown annually by 1.5 million b/d, according to IEA data. (10/27)

Petro-states urgently need to begin diversifying their economies, shifting away from oil production, or else they face financial risks in the years ahead. That conclusion comes from the IEA’s new report, “Outlook for Producer Economies,” which warns that a changing energy system threatens the economies of oil-producing countries. (10/26)

LNG $$ volatility coming? The rise of major emerging liquified natural gas buyers led by China has created the need for infrastructure investment and new shipping capacity to avoid price volatility, a report by the IEA said Monday. (10/23)

Bunker fuel worries: The International Maritime Organization has so far resisted pressure to soften or postpone the implementation of new regulations requiring ships to use bunker fuels with a lower sulfur content from the start of 2020. That has prompted warnings from some analysts that the regulations will squeeze the availability of low-sulfur diesel and jet kerosene required by trucks, trains, aircraft, farmers and industry, resulting in big price increases. (10/26)

New maritime fuel rules, put into motion through the ocean transport-regulating arm of the United Nations, take effect Jan. 1, 2020, and are aimed at slashing the amount of sulfur in marine fuel by more than 80%. The Trump administration raised the heat on the International Maritime Organization rules last week, saying it wants to ease the rollout because of the impact it may have on the economy and energy markets. (10/23)

Jet-fuel prices are usually pegged to diesel prices, typically selling for a few cents more a gallon. Airline and refining industry officials are bracing for a surge in diesel demand as shipowners switch from heavier bunker fuels. Should diesel prices rise, jet fuel could follow. Delta Air Lines  finance chief Paul Jacobson said earlier this month that rising crude prices and the fuel switch for oceangoing vessels represented a ‘net bad’ for the airlines.” (10/23)

Norway’s crude oil production has not only been sliding this year compared to last year—as expected—but it has also consistently underperformed the production forecasts of the Norwegian Petroleum Directorate (NPD). NPD’s figures for September showed on Friday that Norway’s crude oil production stood at 1.302 million b/d, down by 13 percent compared to August 2018 and down 9.6 percent compared to September last year. (10/22)

In the UK, hydraulic fracturing was temporarily suspended on Tuesday, as very minor seismic activity was recorded near shale pioneer Cuadrilla’s Preston New Road site in Northwest England.  Drilling was expected to resume Wednesday. (10/25)

The Ukrainian government plans to raise household gas prices from Jan. 1, 2020 to match what state energy company Naftogaz charges the country’s industrial companies, the government said on Saturday. Gas tariffs are heavily subsidized in Ukraine, which has committed to raise them gradually to qualify for more financial assistance from the International Monetary Fund. (10/27)

Russia’s largest oil producer Rosneft has the capacity to increase its crude oil production by the end of 2018 and will have additional capacity available in 2019, chief executive Igor Sechin said on Thursday. As the biggest Russian oil producer, Rosneft was responsible for a large part of Russia’s production cut of 300,000 bpd under the deal with OPEC to withhold supply to boost prices. (10/26)

In the Middle East, refining and petrochemicals output will grow substantially over the next two decades, boosting the region’s global market share of the two commodities groups, according to a long-term energy outlook from the IEA.  Refinery output from the region is set to increase by 60% in the period up to 2040. (10/26)

When Bahrain announced the discovery of an 80bn-barrel oilfield in the spring — its biggest find since the 1930s — it was greeted with only cautious optimism by industry analysts. Bahrain’s current oil production of just 43,000 barrels a day has marked it out as a relative energy minnow among the crude-rich Gulf states, with consultancy Wood Mackenzie warning the new oilfield could prove “technically challenging and potentially high-cost to develop”. But Bahrain’s oil minister is brighter about the prospects of the Khaleej Al Bahrain Basin, believing early signs point to a field with the potential to transform the state’s fortunes. He is now on a push to attract international partners to help develop the resource. (10/23)

Qatar, the world’s largest LNG producer, is on track to expand its LNG production capacity by around 43% to 110 million tons/year. Its current production capacity is 77 million tons/year. The rapid pace of Qatar’s expansion will allow it to maintain its position as the world’s top LNG exporter despite competition from Australia that expects to have 88 million tons/year of nameplate LNG export capacity if all its 10 projects reach full capacity. (10/24)

China will lead global refinery capacity expansion and investments with 3.12 million b/d additional refining capacity and US$67.3 billion capital expenditure through 2022, data and analytics company GlobalData said in a new report. Total refining capacity in the world is expected to grow by 15.1 percent between 2018 and 2022, with global crude distillation unit’s capacity expected to hit 117 million b/d by 2022. (10/27)

Offshore Western Australia, France’s oil and gas major Total said on Tuesday that the first cargo of liquefied natural gas (LNG) from the Ichthys LNG project had left the port of Darwin for the first export of the US$40-billion project that began producing gas in July this year. The planned production volumes at Ichthys will be 8.9 million tons of LNG annually, 1.65 million tons of liquefied petroleum gas (LPG) a year, and around 100,000 b/d of condensate at peak production and full capacity. (10/25)

Australia’s new Ichthys project and others around the globe may help feed surging Asian demand for LNG at a time when China has curbed its purchases from the US as part of their trade conflict. Originally slated to cost $34 billion with a 2016 start date, the Ichthys project comprises an offshore gas field, a 553-mile pipeline and liquefaction facilities in Darwin, Australia. The project is expected to increase production to 8.9 million tons a year over the next two to three years. That is the equivalent to about 10% of Japan’s current LNG imports. (10/24)

Nigeria has lost no less than $10 billion in revenue in the last 18 years due to obsolete laws, dating back to 1950, in the sector. A senator said the country may lose more if the four bills presented before the National Assembly are not passed and signed by the president. (10/27)

Guyana, with a population of fewer than 750,000 people, has always depended on commodities. Sugar, gold, shrimp, timber, bauxite, and rice account for nearly 60 percent of this South American country’s gross domestic product. Now, Guyana is set to add oil production to that list. Three years and dozens of new oil discoveries after hitting first oil in 2015, Guyana is set to produce its own oil for the first time ever, in 2020. (10/24)

Argentina’s state-controlled oil company, YPF, will significantly boost oil and gas production, investing between $4 billion and $5 billion per year through 2022, Chief Executive Daniel Gonzalez told Reuters on Friday. It plans to raise production by between 5 percent and 7 percent per year, with the largest increase in the Vaca Muerta formation, one of the world’s largest reserves of shale oil and gas. (10/27)

Mexico depends too heavily on US oil and gas imports, an energy adviser to President-Elect Andres Manuel Lopez Obrador said Thursday while outlining the country’s plans to build new refining capacity and take stock of its nascent energy reforms. (10/26)

In Mexico, Pemex’s buying of four US Bakken crude cargoes should help it maximize the efficiency of its 330,000 b/d Salina Cruz refinery, although future imports are no sure thing as they are opposed by the incoming administration, This strategic move is key as Mexico seeks to maximize gasoline output and curtail residual fuel oil output from underperforming refineries. (10/24)

Mexico’s president-elect Andres Manuel Lopez Obrador on Tuesday criticized state-run Pemex’s plan to import US light crude from refiner Phillips 66, calling it a sign of the country’s failed economic policies. (10/24)

A small LNG project north of Vancouver is poised to move to construction in the first quarter of 2019, adding momentum to Canada’s efforts to become a significant exporter of the supercooled fuel. The $1.2 billion Woodfibre LNG project, backed by Indonesian billionaire Sukanto Tanoto’s RGE Group, would be Canada’s second LNG project to go ahead, following the approval of the massive LNG Canada project earlier this month. (10/24)

Heavy oil from Canada, Western Canada Select, typically trades at a discount relative to WTI. Canadian oil producers exposed to the low prices are now fetching around $40 to 50 per barrel less than their counterparts in the US. The lower price reflects quality issues, as well as the cost of transport from Alberta to refineries in the US In early 2018, the discount started to grow significantly, the result of Canadian pipelines filled to the brim. The inability of the Canadian oil industry to build a major pipeline from Alberta to either the US or the Pacific Ocean is increasingly dragging down WCS.

In British Columbia, a natural gas pipeline explosion that occurred earlier this month near the city of Prince George will reduce supply to the province by between 20 and 50 percent this winter, the gas distribution company said in a statement. FortisBC said that although it had planned on having the ruptured pipe up and running by mid-November, it will not be able to fill it to capacity. At best, it would operate at 80 percent of capacity for the winter. (10/24)

The US oil rig count increased by two to 875, the highest level since March 2015, General Electric Co’s Baker Hughes energy services firm reported Friday.  For the month, the rig count rose 12 in October, the biggest monthly increase since drillers added 34 rigs in May. (10/27)

The US is still the world’s largest natural gas producer, despite a marginal 2017 output increase of 0.7 percent, a new report from Eni has revealed. The world’s top five natural gas producers and their 2017 natural gas production, as highlighted in Eni’s report, can be seen below: US – 26.6 trillion cubic feet; Russia – 24.4 Tcf; Iran – 7.6 Tcf; Canada – 6.5 Tcf; Qatar – 6.3 Tcf. (10/24)

Beaufort Sea drilling okayed: The Bureau of Ocean Energy Management has approved Hilcorp Alaska’s drilling project for the Liberty prospect in the Beaufort Sea; this is the first approval for a drilling project in federal waters. Congress voted to open the Arctic National Wildlife Refuge for drilling last December, after forty years of often heated discussions of the issue. Hilcorp is seeking to build, and then drill from, a nine-acre artificial gravel island in shallow waters of the Beaufort Sea. (10/26)

ExxonMobil has been sued by New York state’s attorney general for allegedly misleading investors over the risks that climate change regulations posed to its business. The suit claims that while Exxon had been telling investors for more than a decade that it had used an implied cost of carbon in its investment decisions, its statements were “materially false and misleading”. The attorney general’s office alleges that Exxon was in fact often using a lower undisclosed carbon price or no price at all when it made decisions.  (10/25)

FERC reversal coming? The White House said on Wednesday President Donald Trump has appointed Neil Chatterjee, an avid supporter of subsidizing aging coal and nuclear power plants, as chairman of the Federal Energy Regulatory Commission.  Chatterjee, a Republican from coal-producing Kentucky, who was a FERC commissioner, had been a backer last year of a directive by Energy Secretary Rick Perry, that the commission ultimately rejected, to bail out coal and nuclear plants. (10/25)

$$ support for batteries: Fisker Inc., an e-mobility and technology company developing electric vehicles and proprietary solid-state battery technologies, announced a strategic investment from Caterpillar Venture Capital Inc., a wholly owned subsidiary of Caterpillar Inc., the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. (10/24)

3D- printed batteries for cars? A group of scientists from Duke University has developed a new method to 3D-print lithium-ion batteries in virtually any shape. In a paper published in ACS Applied Energy Materials, the researchers explain how they used an electrolyte solution to increase the ionic conductivity of the polymers used for 3D printing, such as poly (lactic acid) or PLA. This process allowed them to print complete lithium-ion batteries with an inexpensive machine. (10/23)

Wind machines slow hurricanes? Simulations have shown that spinning turbine blades of offshore wind farms can actually slow the wind speeds of a hurricane. (10/25)

Record typhoon: In the Marianas Islands, Typhoon Yutu’s 180 mph winds overturned cars, knocked down hundreds of power poles and left an island of thousands without a medical center — and another without an airport. Buildings were reduced to haphazard piles of tin and wood by the most powerful tropical cyclone to hit any part of the US since 1935. (10/26)

In eastern Australia, drought is expected to cut the crop production this year to less than half the average over the past 20 years, with New South Wales to be worst hit. (10/26)

Plastics ban: the European Parliament has overwhelmingly approved a ban on single-use plastics such as straws, plates, cutlery and cotton-swab sticks in Europe by 2021, joining a global shift as environmentalists emphasize the urgency of halting the use of materials that very often end up in the ocean. (10/26)

Global crude steel production rose 4.4 percent to 152 million tons in September from the same month a year ago, figures from the World Steel Association showed on Wednesday. (10/25)

India’s steel industry will face several challenges as the nation is poised to become the next driver in regional economic growth. Challenges like the high cost of raw materials, including coking coal and thermal coal, transportation networks and infrastructure, and the quality of steel, were brought up by leaders in the major Indian steel mills. (10/25)