Oil prices sank again on Monday, giving consumers more of a break and causing a split among OPEC leaders about what action should be taken, if any, to halt the slide.
The price drop has led to a near free fall in gasoline prices in the United States. On Monday, the national average price for regular gasoline was $3.20, 9 cents lower than it was a week ago and 14 cents below the price a year ago, according to the AAA motor club.
The price at the pump generally follows oil after a few days, leading energy experts to predict lower prices for the rest of the month at least.
“This is not your garden variety autumn price decline,” said Tom Kloza, chief oil analyst at GasBuddy.com, which reports fuel prices from filling stations across the country. “Clearly there is a rift in OPEC, and that means we are more likely to see a price war over the next six months. Crude oil is teetering on the brink of collapse.”
Most oil analysts say that the companies that have led the boom in drilling across North Dakota and Texas are insulated from the declines for the time being, with the break-even levels for investments around $60 a barrel — which is more than $20 below current levels.
With the number of rigs working in the United States at or near record levels, some oil executives are beginning to express concern about investment decisions next year.
Category Archives: Tar Sands
n this period of national gloom comes an idea — a crazy-sounding notion, or maybe, actually, an epiphany. How about an all-Canadian route to liberate that oil sands crude from Alberta’s isolation and America’s fickleness? Canada’s own environmental and aboriginal politics are holding up a shorter and cheaper pipeline to the Pacific that would supply a shipping portal to oil-thirsty Asia.
Instead, go east, all the way to the Atlantic.
Thus was born Energy East, an improbable pipeline that its backers say has a high probability of being built. It will cost C$12 billion ($10.7 billion) and could be up and running by 2018. Its 4,600-kilometer (2,858-mile) path, taking advantage of a vast length of existing and underused natural gas pipeline, would wend through six provinces and four time zones. It would be Keystone on steroids, more than twice as long and carrying a third more crude.
“The best way to get Keystone XL built is to make it irrelevant,” said Frank McKenna, who served three terms as premier of New Brunswick and was ambassador to the U.S. before becoming a banker.
So confident is TransCanada Corp., the chief backer of both Keystone and Energy East, of success that Alex Pourbaix, the executive in charge, spoke of the cross-Canada line as virtually a done deal.
As the debate over how to regulate fracking — and whether to permit the process at all — rages in the U.S. and Europe, there are powerful interests that can benefit from blocking its expansion, namely, existing oil and gas producers, such as the Gulf States and Russia.
The FT reports:
Russian intelligence agencies are covertly funding and working with European environmental groups to campaign against fracking and maintain EU dependence on Russian gas, the head of Nato has claimed.
“The potential for Russia using energy supplies as a means of putting pressure on European nations is a matter of concern. No country should use supply and pricing terms as tools of coercion,” they said. “We share a concern by some allies that Russia could try to obstruct possible projects on shale gas exploration in Europe in order to maintain Europe’s reliance on Russian gas.”
It is the most remarkable economic story of our time and it comes in the midst of the Obama economy’s miserable performance.
The United States of America leads the world again in petroleum production, which includes crude oil, natural gas, and other liquids. We’re number 3 in crude oil production behind Russia and Saudi Arabia and the Financial Times notes that we will eventually surpass both countries and become the leading producer of crude oil in the world.
Four decades of declining oil production has been reversed in just the last 5 years.
The growth in production in North Dakota has been phenomenal. The US Geological Survey keeps raising the estimate of proven, retrievable reserves in the Bakken Formation. It currently stands at about 8 billion bbl but with the technology to extract it improving by leaps and bounds, no one can guess how much of the estimated 80 billion bbl in the 220,000 square mile expanse of the Formation will actually be recovered.
In April, North Dakota surpassed the milestone of averaging 1 million bpd. The state has seen its oil production increase twelve-fold over the last decade from only 83,233 bpd in April 2004 to 1,001,149 bpd in April this year.
So why are our gas prices still so high??
A group of over fifty lecturers and professors has written to the Guardian newspaper in support of fracking and shale gas exploitation in the abundant Bowland Shale in North-East England.
It’s quite possible that, given their educational background and training, they know slightly more about the subject than the group of fashion designers, installation artists, pop stars, children of rich celebrities, green activists, actors and models who signed that letter the other day demanding that fracking should be stopped.
Then again, perhaps not. As I’m sure Radiohead’s Thom Yorke or designer Stella McCartney or public intellectual Russell Brand would happily confirm, every one of these scientific experts is tainted by their association with the Big Oil industry and therefore cannot be trusted to tell the truth.
Unlike, say, their fellow signatories wind farm developer Dale Vince, Greenpeace or Friends Of The Earth, none of whom have any vested interest whatsoever in promulgating the global warming scare and the green energy scam, apart from the small fact that it makes them millions and millions of pounds.
Environmentalists often use this day to warn that using fossil fuels, like coal and oil, will continue to harm the planet and cause global warming. But government data shows that the U.S. has become greener even as fossil fuel use exploded.
“The incredible advances in human flourishing and economic growth over the past two and a half centuries were made possible by a technological revolution that harnessed underground energy from coal, oil, and natural gas,” Myron Ebell, director of international energy and global warming policy at the Competitive Enterprise Institute told The Daily Caller News Foundation.
Economists generally argue that environmental protection becomes a higher priority the wealthier a country gets. Fossil fuels, like coal and oil, have enabled the U.S. and many other countries to rapidly grow their economies and focus more on environmental protection.
“Countries with access to more energy have populations that are healthier and live longer and also have higher environmental quality than energy-poor countries,” Ebell added. “And coal, oil, and natural gas are not yesterday’s fuels; they remain the basis of global prosperity and continue to contribute to a healthier, cleaner environment.”
North Dakota produced a record amount of crude oil in 2013 — 313.5 million barrels, about 70 million more than the previous high mark a year earlier, state data show.
The tally, up nearly 29 percent from 2012, marks the sixth consecutive record year for oil production in North Dakota, which is the nation’s No. 2 oil producer behind Texas.
Lynn Helms, director of the state Mineral Resources, said Friday that North Dakota produced an average of 923,227 barrels of oil daily in December. The monthly total of 28.6 million barrels was down from 29.2 million barrels in November due to worse-than-normal winter weather that caused the slowdown in oil production, he said.
“The big story in December was the weather,” he said.
A left-wing lobby group in San Francisco wired $55,000 to the bank account of an Indian chief in Northern Alberta, paying him to oppose the oilsands.
And sure enough, that chief – Allan Adam, from the Athabasca Chipewyan First Nation – earned his money. Last weekend, he flew to Toronto to sit on a stage next to Neil Young, the folk singer who was in town to demonize Canada’s oil industry.
Now, $55,000 might sound like a lot of money to pay, just to rent a politician for a day if all the chief did for his money was to appear on stage in Toronto beside Neil Young. But to the Tides Foundation, it’s well worth it. Think of Adam as an actor, hired to play a part in an elaborate theatrical production.
Neil Young had his role: he’s the American celebrity who can draw crowds of fawning Baby Boomer journalists. But at the end of the day, he’s just another millionaire celebrity. When he talks about the oilsands, he quickly reveals himself as a low-information know-nothing.
For years, activists have warned that fracking can have disastrous consequences — ruined water and air, sickened people and animals, a ceaseless parade of truck traffic.
Now some critics are doing what was once unthinkable: working with the industry. Some are even signing lucrative gas leases and speaking about the environmental benefits of gas.
In one northeastern Pennsylvania village that became a global flashpoint in the debate over fracking, the switch has raised more than a few eyebrows.
A few weeks ago, Victoria Switzer and other activists from Dimock endorsed a candidate for governor who supports natural gas production from gigantic reserves like the Marcellus Shale, albeit with more regulation and new taxes. Dimock was the centerpiece of “Gasland,” a documentary that galvanized opposition to fracking, and Switzer was also featured in this summer’s “Gasland Part II,” which aired on HBO.
“We had to work with the industry. There is no magic wand to make this go away,” said Switzer, who recently formed a group that seeks to work with drillers on improved air quality standards. “Tunnel vision isn’t good. Realism is good.”
The number of wells currently producing oil and natural gas in North Dakota reached a record high for July, the state resource officials said.
The North Dakota Industrial Commission of the Department of Mineral Resources said 9,322 wells were in production in July, an all-time high, and nearly all were targeting the Bakken and Three Forks formations.
Lynn Helms, director of the NDIC, said the rig count decreased from June to July but the number of wells completed increased from 102 to 251, leading to an increase in oil production in the state.
The NDIC said July oil production was 108,258 barrels per day, a record high. A record for natural gas production was set at 970 million cubic feet per day.
The U.S. Geological Survey estimates parts of North Dakota may contain as much as 7.4 billion barrels of oil and 6.7 trillion cubic feet of natural gas. The state is in the No. 2 spot behind Texas in terms of production of natural resources in the United States.