Daily Archives: October 21, 2009

Kate Mackenzie

Just as the rest of the world begins to get excited about prospects for shale gas reserves, a skirmish is growing over just how much shale gas is actually recoverable in the US.

Matt Simmons has said a few times this year that he doesn’t see evidence that the big shale plays such as Barnett are actually providing big increases in natural gas production, despite the number of wells being sunk. He also pointed to the environmental problems with the hydraulic fracturing used to extract shale gas.

Geologist and energy consultant Arthur Berman has also been pointing out the rapid decline rates for some of the big shale gas plays for some time now. Berman and Lynn Pittinger wrote about their attendance at Haynesville shale symposium earlier this month:  Read more

Kate Mackenzie

On FT Energy Source:

EU climate financing shenanigans Read more

Kate Mackenzie

We wrote yesterday that two major sticking points in the lead-up to a Copenhagen agreement seemed to be settled, but two big issues remained: 1. How much money rich countries will give poor countries; and 2. Whether the US Congress will approve an emissions target in time.

On that first point, today’s Wall Street Journal says that EU members are, surprise surprise, in disagreement about how much money to give to the developing world to fight climate change — and even about how to talk about that sum, from a tactical viewpoint.
 Read more

Oil prices fell while base metals softened and gold consolidated as commodity markets traded cautiously on Wednesday.

Nymex December West Texas Intermediate fell $1 to $78.12 a barrel while ICE December Brent lost 74 cents at $76.50 a barrel.

US inventories data, due out later in the session, were expected to show an increase of 1.8m barrels in crude stocks last week, according to a poll of analysts by Reuters. Read more

Kate Mackenzie

What does struggling US commercial lender CIT have in common with peak oil?

Quite a lot, if a rather mysterious offer for some of CIT’s debt is serious. CIT is under pressure from activist investor Carl Icahn over its plan to reduce its $30bn debt load by almost $6bn. Icahn says the terms CIT is offering its existing bondholders to take part in the debt exchange are poor and would destroy the value of their assets. Read more

Kate Mackenzie

Opec secretary-general Abdulla el-Badri told the Wall Street Journal that of those 35 Opec oil production projects said in February to be put on hold, seven were being re-started, thanks to buoyant oil prices.

The projects would be brought on stream over the two to four years and would produce 1.2m barrels per day, he said. Read more

Sheila McNulty

For the second time since the Obama Administration took office, the Interior Department is investigating the terms of leases issued under the Bush Administration.

This time, Ken Salazar, Secretary of the Interior, has asked the department’s Inspector General to investigate a set of favourable conditions and low royalty rates offered on January 15, 2009 – just five days before the end of the Bush Administration.

The favourable conditions and rates were offered to energy companies holding existing research, development and demonstration leases from the US government. Here is what Salazar had to say about the why the timing and circumstances of the leases merited additional review:

Taxpayers deserve answers to serious questions about why these lease addenda were granted at the eleventh hour, under what circumstances, and at what potential expense to the federal treasury. We must reform our nation’s oil shale program and ensure that the American people have the promise of a fair return from their resources.

The leases were issued in January 2007 to develop new technologies to extract oil from shale rock. Yet on January 15, 2009, the department granted the holders of the six oil shale leases the right, at the time of conversion to commercial development, to elect to have their leases governed by a set of favourable conditions and low royalty rates. The Bush Administration established an initial royalty rate of 5 per cent for commercial oil shale production, which Mr Salazar says was premature. Read more

James Fontanella-Khan

Setback for US crackdown on oil speculation
Leaders at the US commodity regulator raise doubts (FT)

Gazprom, EDF clinch US-UK long-term gas swap
The deal allows Gazprom to expand in the US (Reuters)
 Read more