Energy

• Time to Call Iran's Bluff on Oil?

  Iranian lawmakers this week expressed support for a measure that would beat the European Union to the punch by cutting off oil exports before the summer. Tehran's measure amounts to a statement of economic warfare to some degree as the European economy continues to drag on the rest of the global market. Yet, if Iran is shipping only 20 percent of its oil to European markets, its more than likely the Europeans would be able to weather the storm. European lawmakers voted to ban any new crude oil export contracts with Iran and put existing contracts on hold as part of…

• Companies Closing Shale Operations: Where Does the Industry Go from Here?

  On January 23, 2012, Chesapeake Energy announced that it would curtail drilling in shale gas plays in the United States. Subsequently, other operators have followed suit. While the outcome of this announcement is unclear, it is a signal that the industry is in distress. One can argue that this distress stems from a lack of discipline as market price began to decline. After gas prices collapsed in mid-2008, U.S. operators continued to drill as if price did not matter. Many reasons were given to justify the economics of on-going activity including to hold acreage by production, to fulfil contract obligations…

• Shedding Some Light on Peak Oil

  On January 26, Bloomberg Businessweek printed an editorial by Charles Kenny titled, "Everything You Know About Peak Oil Is Wrong". This editorial reflects several common misunderstandings. According to Kenny: Titled Limits to Growth, their report suggested the world was heading toward economic collapse as it exhausted the natural resources, such as oil and copper, required for economic production. The report forecast that the world would run out of new gold in 2001 and petroleum by 2022, at the latest. Limits to Growth gives a table that might be interpreted to show that oil and gold new extraction will be exhausted…

• Canada, North American Energy Powerhouse, Now Faces Fracking Protests

  Mexican President Jose de la Cruz Porfirio Diaz Mori once reputedly said nearly a century ago, “¡Pobre México¡ Tan lejos de Dios y tan cerca de los Estados Unidos¡” (“Poor Mexico, so far from God and so close to the United States!”) In 2009 eminent Mexican author Carlos Fuentes updated Diaz’s aphorism to proclaim, “'Poor Mexico and poor United States, so far from God and so near to each other.” America’s Great White North neighbor, Canada, might paraphrase Fuentes to state, “Why do the uppity Yanks repeatedly bash their major energy supplier?” According to the U.S. Energy Administration, the United…

• Bad Timing for Scottish Independence

  Scotland under First Minister Alex Salmond announced plans to hold a referendum on independence from the United Kingdom in 2014. Edinburgh maintains it can support itself without the help of London, largely through its oil and natural gas fields in the North Sea. Scottish finance officials said there are trillions of dollars worth of oil reserves left in the North Sea yet an economic assessment found that Edinburgh would take its first step as an independent nation while shouldering massive debt.  The discovery of oil off the coast of Scotland in the North Sea in the 1970s breathed new life…

• China Buys Into Portuguese National Power Company, Politicians Aghast

  In the capitalist dog eat dog world, financial distress is an opportunity for those flush with cash. The Portuguese economy, hammered by soaring debt, has led the government to attempt to reduce it by selling off investments in Redes Energeticas Nacionais, SGPS, S.A. (National Energy Network, formerly Rede Electrica Nacional, S.A., or REN), which in 2007 received a 50 year concession to operate Portugal’s national electricity transmission grid. China's State Grid International Development Ltd. and government-owned Oman Oil Company SAOC will buy a 40 percent stake in REN for a combined $778 million. China's State Grid International Development Ltd. is paying $573…

• The Important Roles of Risk and Stealth in the Eagle Ford Shale Discovery

  The Eagle Ford Shale is one of the biggest shale fields in the world and one of the biggest developments in Texan oil and gas for decades; and it all exists due to big risks and stealthy business by Petrohawk Energy Corp. Successful wells had been drilled near to the area previously, but with inconsistent results, and by 2007 it appeared that the area was drilled out. So when a man appeared offering to lease thousands of acres of Joe Martins family property for $175 per acre he was delighted. “We were eager to do any kind of lease in…

• Are Electric Delivery Trucks the Future of Trucking?

  Trucking has become the most common mode for transporting goods across the land. However, all those trucks on the road burning diesel fuel can create a great deal of air pollution. Plus, higher gas prices cause increases in the prices of goods. Now is the time to consider the next era of trucking, the electric truck. At the moment, they cost about three times more than the internal combustion engine truck. However, a new study from the Massachusetts Institute of Technology (MIT) shows that a fleet of electric trucks can actually be more cost effective than the standard diesel fleet.…

• Two Natural Gas Kings: Russia and Qatar

  In my forthcoming energy economics textbook (2012), the two natural gas kings are three –  Russia,  Qatar and Iran –  while if I were beginning that book today, I would consider making it a foursome. The United States (U.S.) might belong with this royalty, assuming that the shale revolution is indisputably authentic and relevant, and not a transient bounty. Unfortunately we must wait a while for the verification we require, because the Energy Intelligence Agency (EIA) of the U.S. Department of Energy has apparently reduced its estimate of reserves in the Marcellus shale deposit by 66 percent. This revaluation has…

• Israeli Company Promotes Shale Oil and Natural Gas Production, Protests Ensue

  Israel imports all its oil and coal and 70 percent of its natural gas needs, leaving the government deeply interested in developing indigenous alternatives. Highlighting the vulnerability of its imports, on 5 February there was an explosion on Egypt's $500 million East Mediterranean Gas Company Ltd. (EMG) pipeline, that transits Egyptian natural gas to Israel and Jordan in northern Sinai in the Massaeed area, west of al Arish.  The attack on the EMG pipeline is the 12th since February 2011, when a popular uprising deposed Egyptian President Hosni Mubarak. Egypt currently supplies Israel with more than 40 percent of its natural gas…